[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


                                                                      ?

                 DEPARTMENTS OF LABOR, HEALTH AND HUMAN

               SERVICES, EDUCATION, AND RELATED AGENCIES

                        APPROPRIATIONS FOR 2012

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS
                              FIRST SESSION
                                ________
  SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, 
                    EDUCATION, AND RELATED AGENCIES
                    DENNY REHBERG, Montana, Chairman
 JERRY LEWIS, California            ROSA L. DeLAURO, Connecticut
 RODNEY ALEXANDER, Louisiana        NITA M. LOWEY, New York
 JACK KINGSTON, Georgia             JESSE L. JACKSON, Jr., Illinois
 KAY GRANGER, Texas                 LUCILLE ROYBAL-ALLARD, California
 MICHAEL K. SIMPSON, Idaho          BARBARA LEE, California
 JEFF FLAKE, Arizona                
 CYNTHIA M. LUMMIS, Wyoming         

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mr. Dicks, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
                Steve Crane, Kevin Jones, Donna Shahbaz,
                John Bartrum, Susan Ross, and Lori Bias,
                           Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 Department of Education..........................................    1
 Department of Health and Human Services..........................   83
 Pell Grants......................................................  221
 Fiscal Year 2012 Budget Request for Department of Labor..........  283





                                ________

         Printed for the use of the Committee on Appropriations



                 DEPARTMENTS OF LABOR, HEALTH AND HUMAN
               SERVICES, EDUCATION, AND RELATED AGENCIES
                        APPROPRIATIONS FOR 2012
_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS
                              FIRST SESSION
                                ________
  SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, 
                    EDUCATION, AND RELATED AGENCIES
                    DENNY REHBERG, Montana, Chairman
 JERRY LEWIS, California            ROSA L. DeLAURO, Connecticut
 RODNEY ALEXANDER, Louisiana        NITA M. LOWEY, New York
 JACK KINGSTON, Georgia             JESSE L. JACKSON, Jr., Illinois
 KAY GRANGER, Texas                 LUCILLE ROYBAL-ALLARD, California
 MICHAEL K. SIMPSON, Idaho          BARBARA LEE, California
 JEFF FLAKE, Arizona                
 CYNTHIA M. LUMMIS, Wyoming         

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mr. Dicks, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
                Steve Crane, Kevin Jones, Donna Shahbaz,
                John Bartrum, Susan Ross, and Lori Bias,
                           Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 Department of Education..........................................    1
 Department of Health and Human Services..........................   83
 Pell Grants......................................................  221
 Fiscal Year 2012 Budget Request for Department of Labor..........  283





                                ________
         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE

 71-353                     WASHINGTON : 2012




                                  COMMITTEE ON APPROPRIATIONS

                    HAROLD ROGERS, Kentucky, Chairman

 C. W. BILL YOUNG, Florida \1\         NORMAN D. DICKS, Washington
 JERRY LEWIS, California \1\           MARCY KAPTUR, Ohio
 FRANK R. WOLF, Virginia               PETER J. VISCLOSKY, Indiana
 JACK KINGSTON, Georgia                NITA M. LOWEY, New York
 RODNEY P. FRELINGHUYSEN, New Jersey   JOSE E. SERRANO, New York
 TOM LATHAM, Iowa                      ROSA L. DeLAURO, Connecticut
 ROBERT B. ADERHOLT, Alabama           JAMES P. MORAN, Virginia
 JO ANN EMERSON, Missouri              JOHN W. OLVER, Massachusetts
 KAY GRANGER, Texas                    ED PASTOR, Arizona
 MICHAEL K. SIMPSON, Idaho             DAVID E. PRICE, North Carolina
 JOHN ABNEY CULBERSON, Texas           MAURICE D. HINCHEY, New York
 ANDER CRENSHAW, Florida               LUCILLE ROYBAL-ALLARD, California
 DENNY REHBERG, Montana                SAM FARR, California
 JOHN R. CARTER, Texas                 JESSE L. JACKSON, Jr., Illinois
 RODNEY ALEXANDER, Louisiana           CHAKA FATTAH, Pennsylvania
 KEN CALVERT, California               STEVEN R. ROTHMAN, New Jersey
 JO BONNER, Alabama                    SANFORD D. BISHOP, Jr., Georgia
 STEVEN C. LaTOURETTE, Ohio            BARBARA LEE, California
 TOM COLE, Oklahoma                    ADAM B. SCHIFF, California
 JEFF FLAKE, Arizona                   MICHAEL M. HONDA, California
 MARIO DIAZ-BALART, Florida            BETTY McCOLLUM, Minnesota
 CHARLES W. DENT, Pennsylvania         
 STEVE AUSTRIA, Ohio                   
 CYNTHIA M. LUMMIS, Wyoming            
 TOM GRAVES, Georgia                   
 KEVIN YODER, Kansas                   
 STEVE WOMACK, Arkansas                
 ALAN NUNNELEE, Mississippi            
   
 ----------
 \1\ Chairman Emeritus    

               William B. Inglee, Clerk and Staff Director

                                  (ii)

 
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED 
                    AGENCIES APPROPRIATIONS FOR 2012

                              ----------                 

                                          Thursday, March 10, 2011.

                        DEPARTMENT OF EDUCATION

                                WITNESS

HON. ARNE DUNCAN, SECRETARY, DEPARTMENT OF EDUCATION

                  Opening Remarks of Chairman Rehberg

    Mr. Rehberg. We will begin the hearing, and I thank you all 
for your patience. This begins the 2012 cycle for the Labor, 
Health and Human Services, Education appropriations 
subcommittee.
    I historically and normally do not feel it necessary to 
give opening statements, because we are here to hear from the 
Secretary, and so that will be the protocol that I follow. I am 
also going to ask that the members, to the best of their 
ability, maintain their questions or their conversation with 
the Secretary on the fiscal year 2012 budget. There will be 
plenty of opportunity to have conversation about other issues 
that are before the Secretaries. We are going to have oversight 
hearings, and we are working in consultation with the minority 
for what those oversight hearings will look like.
    And I thank those members, Mr. Flake, you learned your 
lesson; you were on time. Thanks for being here.
    At this time I will turn it over to the minority ranking 
member--and I thank Mr. Duncan for coming; we will introduce 
you in a moment--if you would like to make an opening 
statement.

             Opening Remarks of Ranking Member, Ms. DeLauro

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    I want to just say that I am looking forward to our work 
together on this committee. I have served on this committee for 
a number of years, and it is at the heart and soul of 
everything that I believe in with regard to education and 
health services and scientific research. So, again, I am 
looking forward to working with you and all the members of the 
subcommittee.
    Mr. Secretary, let me say, thank you, for joining us today. 
Budgets are the embodiment of more than just our national 
priorities; they reflect our moral values, what we as a people 
and as a Nation hold most dear. And as such, I strongly support 
the decision that you and the President have made in making 
investments in education the top priority in this budget. Only 
through education can people better themselves and their 
communities, keep the promise of opportunity and social 
mobility for all, and continue to lead the world in innovation 
and standard of living.
    As President Obama has said, ``Countries that out-educate 
us today, will out-compete us tomorrow.'' With that in mind, I 
applaud the new investments in education that you have included 
in this budget. For example, $300 million, for i3, the 
Investing in Innovation Fund; $150 million for Promise 
Neighborhoods; and $100 million to increase after-school 
programs.


                importance of early childhood education


    I want to particularly thank you for your continued support 
of early childhood education. This is something the chairman 
and I have worked together to emphasize as cochairs of the 
Congressional Baby Caucus. And study after study has shown, and 
I know from watching my own grandchildren, that the earliest 
experiences are essential, and supportive environments critical 
to long-term outcomes for children.
    The business community understands this. Just last week 
Federal Reserve Chairman Ben Bernanke said, and I quote, The 
payoff to early childhood programs can be especially high. For 
instance, preschool programs for disadvantaged children have 
been shown to increase high school graduation rates. Because 
high school graduates have higher earnings, pay more taxes, and 
are less likely to use public health programs, investing in 
such programs can payoff even from the narrow perspective of 
State budgets. Of course, the returns to the overall economy 
and to the individual themselves are much greater.
    So I thank you for recognizing the vital importance of 
early learning in the budget.


               title i, esea and idea programs investment


    I do have some concerns about other inclusions in the 
budget request, and I hope we can discuss them this morning. 
For example, I would like to see a bigger commitment to Title 
I, which aids at-risk children, and to IDEA for children with 
disabilities. These are the two fundamental building blocks of 
our K-through-12 education system and the resources that school 
systems rely on desperately to get by.


                       children living in poverty


    According to Census data, the number of America's children 
that live in poverty grew by 2 million during the recession. In 
2009, child poverty reached a level of 20.7 percent, a rate of 
more than 1 in 5 and totaling more than 15.5 million children. 
This makes Title I funding even more important, as without 
those resources, far too many children would not have the 
supports they need to succeed.


                           pell grant program


    In terms of higher education, I strongly welcome the 
emphasis you placed on Pell Grants, maintaining the maximum 
award at the current amount of $5,550. I have been visiting 
community colleges in my district, and I cannot emphasize 
enough how important Pell Grant support is in helping people of 
all ages go to work, go to school--now more than ever.
    Since the recession, the number of students needing Pell 
Grant support to pursue their education has increased by 2.4 
million to almost 9 million students. Many of these students 
told me not only that Pell Grants were making the difference 
for them, but if they lost even $100 out of that grant, their 
education and their chances of improving their employment 
prospects would be put at risk.
    That is the knife's edge that these men and women are 
walking on in this economy. It is one of the many reasons I 
oppose the shortsighted cuts in the majority's budget for the 
remainder of 2011 to Pell, to supplemental education 
opportunity grants, and to many other education programs, 
including Title I and IDEA, and even to Head Start and early 
education. If we want to create jobs, grow the economy, and 
reduce the deficit in the long term, it does not make sense to 
roll back our critical investments in education. We should not 
be slashing the programs that help the middle class ensure 
educational opportunity for all.
    So, on behalf of the students in my district and across 
America, I want to thank you and the President for committing 
to investments in education. I believe it is just the right 
thing to do. Thank you again for coming. I am looking forward 
to hearing your testimony, and I thank you very much, Mr. 
Chairman.
    Mr. Rehberg. Thank you, Mrs. DeLauro, and I look forward to 
working with you as well.
    As you notice, there is a timer in front of you. She may 
look nice, but she is not. She has got the red button. We will 
ask that you keep your comments to 5 minutes.
    Ms. DeLauro. You do look nice.
    Mr. Rehberg. She does look nice.
    And I ask each of the members of the committee to keep 
their remarks to 5 minutes as well. There will be plenty of 
opportunity if we stay on schedule for many rounds of questions 
of the Secretary.
    So, at this time, I would like to welcome you to the 
committee and look forward to at least 2 more years of fruitful 
discussion with you on how best to provide the services that 
you provide to a very worthy cause, and that is the education 
of our youth.
    So, at this time, Mr. Duncan.
    Mr. Jackson. Mr. Chairman, just before the Secretary 
begins, can I just acknowledge that, Mr. Secretary, the absence 
of members has nothing to do with their interest in the 
subject. Secretary Clinton is testifying, and many members of 
our committee share both subcommittees, and we have this 
hearing at exactly the same time. So a number of us will be 
running back and forth between hearings.
    Thank you.
    Mr. Rehberg. Thank you.
    And that is a good point.
    We have a new standard; I think we are actually keeping 
track of our attendance. That is something you have done at 
school for many years, I know, because it made me nervous over 
the years. And so we are all missing other meetings, and just 
please understand this is not for a lack of interest.
    So, Mr. Duncan, I am sorry; he used up a minute of your 
time. [Laughter].


              fy 2012 education department budget request


    Secretary Duncan. Thank you so much, Mr. Chairman, Ranking 
Member DeLauro and other members of the committee.
    Thank you for this opportunity to come before you and talk 
about President Obama's fiscal year 2012 education budget.
    This proposed budget reflects our Administration's dual 
commitment to reduce spending and to be more efficient while 
investing to secure our future, and at the very top of that 
list of investments we must make is education.
    Today, all across America, people are meeting the challenge 
of improving education in many different ways, from creating 
high quality early learning programs to raising standards, 
strengthening the field of teaching, and aggressively attacking 
achievement gaps.


            role of federal government in education support


    While the Federal Government contributes less than 10 
percent of K-to-12 funding nationally, our programs play a 
critical role in promoting equity, protecting children at risk 
and, more recently, supporting reform activities at the State 
and local level.


                        race to the top program


    We have used competitive dollars to get State and local 
educators to think and to act differently. Our Administration's 
Race to the Top program has prompted Governors and educators to 
jointly embrace bold reform programs. With our support, 41 
States have adopted higher standards. And several States have 
passed new laws and policies around teacher evaluations. 
Several States altered their charter laws and policies to 
foster the creation of new learning models.


                rethinking the federal role in education


    Race to the Top also prompted us to rethink the Federal 
role. Our Department was established to promote equity in 
education and protect students most at risk. To that end, we 
have steadily boosted our commitment to formula programs, like 
Title I and IDEA. This budget also increases our investments in 
higher education through both student lending programs and 
grants.
    But today, our most critical role is in supporting reform 
at the State and local level by providing flexibility and 
incentives while holding States and districts accountable in a 
fair and an honest and a transparent way. And for filling this 
role, we must strike the right balance, providing as much 
freedom as possible to schools while ensuring that children are 
learning what they need to learn.


                          no child left behind


    I have spent 2 years traveling the country, visiting many 
of your States and districts, and talking with your teachers 
and parents and students. There is a lot of dissatisfaction 
with the current Federal law around public education. Many 
people feel the Federal Government went too far with sanctions, 
mislabeling schools as failures and issuing one-size-fits-all 
mandates.
    And just yesterday, I announced that the percentage of 
schools that are not meeting Federal standards under No Child 
Left Behind could rise to 82 percent this year. That is why we 
are asking Congress to rewrite No Child Left Behind. We want to 
fix the law and we want to fix that law together.
    I do not think that all of these schools are failing by any 
means. They have challenges, big and small challenges, and they 
need to meet them, because every single child counts. But the 
current law simply does not distinguish between them. And we 
need to do that if we are going to address the real problems.


                   fy 2012 education budget proposals


    But there is also a deep appreciation for the Federal 
commitment to children and learning. They are grateful for our 
support of STEM subjects, Science, Technology, Engineering and 
Mathematics. Americans know that even in challenging fiscal 
times like these, we must prepare our young people to compete 
and to be successful in tomorrow's economy. They know that, 
even as States face greater financial pressure than in any 
other time in recent history, we cannot put our children at 
risk. So our budget proposal reflects these aspirations and 
commitments.
    Overall, we are seeking a $2 billion increase in non-Pell 
spending. That includes a modest increase in formula programs, 
like Title I of ESEA and IDEA, while maintaining programs for 
English language learners and other at-risk populations, such 
as rural, migrant and homeless children.
    We are calling for a new round of Race to the Top Funds, 
though we would change the program to target school districts 
rather than States and include a carve-out for rural 
communities. We also want to do another round of our Investing 
in Innovation Fund and again do a rural carve-out there as 
well.
    We will continue to invest in innovation and research. We 
want to support a well-rounded education that includes the arts 
and foreign languages, literacy, STEM and physical education. 
We want to strengthen the teaching profession in a number of 
different ways and work harder to attract top students to 
pursue teaching careers. We propose the new competition to 
strengthen early-learning programs. And we are challenging 
States to boost college completion rates.


            program consolidations and eliminations proposed


    We are also working to be more efficient. In the 2010 
budget enacted by Congress, we eliminated four programs saving 
$360 million. In our proposed 2012 budget, we propose 
eliminating 13 more programs, saving another $147 million. 
Together these savings total more than $500 million annually, 
which is helping fund our other priorities.
    We are also proposing to consolidate 38 separate elementary 
and secondary education programs into 11 funding streams. These 
commonsense reforms make it easier for school districts to 
focus on educating children rather than bureaucratic compliance 
with us here in Washington.
    We are also proposing to reduce our investment in career 
and technical education, not because we don't believe in CTE, 
but because we feel the current program is not getting the 
results we need.


        efficiencies to close pell shortfall, protect max award


    This year we have also identified efficiencies in the 
student aid program that, which when coupled with a change in 
Pell Grant policy, would help close a $20 billion shortfall in 
the Pell Grant program and save $100 billion over the next 
decade. Those savings means we can protect the $5,550 maximum 
Pell award and help millions of young people meet the rising 
tuition costs. Those savings also mean that we can meet the 
skyrocketing demand for Pell Grants, which has risen from less 
than 4 million grants in 2000 to a projected 9.6 million grants 
next year. In the last 2 years alone, an additional 3 million 
students received Pell Grants.


                           winning the future


    Finally, let me close by saying that we share with you the 
responsibility for being efficient and smart in how we invest. 
We share an even greater responsibility, which is to prepare 
the next generation to lead.
    In his recent speech to Congress, the President talked 
about winning the future. To emphasize that point, he announced 
his budget at an elementary school in Baltimore. He believes, 
as I do, that winning the future starts in the classroom.
    He also believes that Government spends too much, and he 
has outlined more than a trillion dollars in deficit reduction 
over the next decade. This is an important national 
conversation. It will take a great deal of time, energy and 
thought. It will take courage, real courage on the part of 
Congress and the Administration. We have to be truthful with 
each other and truthful with the American people about what is 
and isn't working. We have to take the heat together for the 
cuts that we are making.


                   congressional support of education


    I want to close by thanking Congress for supporting 
education over the past 2 years. Because of you, we protected 
millions of children in classrooms all across America from the 
greatest economic crisis since the Depression. Because of you, 
we helped States and districts all across America advance their 
reform agendas, raise standards and challenge the status quo. 
Because of you, almost a thousand underperforming schools have 
launched dramatic restructuring plans. Because of you, there is 
a greater determination than ever before to ensuring that our 
children can compete in the global economy. And because of you, 
we face a brighter future and the greatest prospect that the 
world we leave behind will be better than the world we 
inherited.
    I thank all of you for your collective leadership, and I am 
happy to take your questions.
    [The prepared statement of Secretary of Education, Arne 
Duncan, follows:] 





                          ESEA REAUTHORIZATION

    Mr. Rehberg. Thank you, Mr. Duncan.
    Holding true to tradition, we will alternate between 
majority and minority. I will withhold my questioning until the 
end. And as it looks, we will have plenty of opportunity for 
several rounds.
    So, at this time, I will call on Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.
    Mr. Secretary, good morning.
    Mr. Secretary, your fiscal year 2012 budget proposal 
presents your budget request based on your proposed vision of a 
reauthorized Elementary and Secondary Education Act. Nearly all 
of the program increases and most of the consolidations assume 
a brand new structure for K-12 educational programs and 
accounts.
    Most of the new programs that you are requesting funding 
for are not even authorized at this time. They include Race to 
the Top, Early Learning Challenge Fund, Title I rewards, 
Investing in Innovation and Promise Neighborhoods. In addition, 
you proposed to consolidate 38 ESEA programs into 11 new 
authorities.
    We applaud your efforts to identify duplicative programs 
and proposed consolidation and elimination of them. But absent 
action from the authorizing committee, it is difficult for us 
to fund these programs under the vastly different structure 
than you proposed.
    And we know that our colleagues who are on the Education 
and Workforce Committee are working hard in developing new 
ideas to reauthorize the No Child Left Behind act. But I don't 
think any of us are under the illusion that the bill can be 
developed, passed by the House, conferenced in the Senate, and 
signed into law by the President by the time that this 
committee needs to develop its budget bill for fiscal year 
2012. And again, that budget that you are asking for is $2 
billion more than last year.
    So the question is, if the Elementary and Secondary 
Education Act is not reauthorized by the time that we begin 
markup in a few short months, how would you propose to 
distribute funding in your budget proposal under the structure 
that we are operating under with the existing law?
    Secretary Duncan. So what we are trying to do is--as you 
know and it is a great question--is we are trying to do 
business very differently. And we think by consolidating 
programs, we will enable those scarce resources that currently 
States and local districts are spending dealing with us in 
Washington, enable those scarce resources to be put into the 
classroom instead. We want to streamline our bureaucracy. We 
want to support reform and innovation and move from this 
compliance-driven culture, and we want to move on these two 
paths concurrently.
    We think we have to support reform. We have to support a 
very different set of priorities. And we are going to continue 
to push very, very hard. So we want to partner with you, 
partner with everyone in Congress. We want, as you mentioned, 
to rewrite the law this year and go into the new school year 
this fall with a new law that rewards excellence and challenges 
the status quo; we need to do that.
    And our goal is not to continue to do business as usual. We 
don't think, with the 25 percent dropout rate, and the U.S. 
falling from first to tenth in the world in college graduates--
we can afford to just do business as usual.
    Mr. Alexander. So we feel like it is going to cost the 
taxpayers $2 billion more to save some money?

            EDUCATION INVESTMENT MUST CONTINUE IN HARD TIMES

    Secretary Duncan. It is not just about saving money, sir. 
We are trying to, again, make some very tough cuts, reducing, 
eliminating the second Pell Grants given in the same year, 
making cutbacks in CTE. But I continue to absolutely believe 
that, as a country, we have to invest in education. So we want 
to invest in early childhood education. We can make a pretty 
compelling case that the savings to society of the early 
childhood investment are massive. We have to continue to invest 
in K-to-12 reform.
    And the fact that we have more young people going to 
college and accessing Pell Grants, I think it is a challenge, 
but a great challenge to have. The jobs of the future, as you 
know, you have to have some form of higher education to get 
those. So I do fundamentally believe that even in tough budget 
times, particularly in tough budget times, we have to invest in 
education.
    Mr. Alexander. Thank you, Mr. Chairman.
    I will wait until the next round.
    Mr. Rehberg. Thank you.
    Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    And thank you, again, Mr. Secretary.

               GROWTH IN PELL GRANT COSTS AND RECIPIENTS

    A very important part of the Department's budget is Pell 
Grants, which currently help more than 9 million students with 
low and moderate incomes afford to go to college. As you have 
stated, the cost of Pell Grants has increased over the past 
several years. I understand that the biggest single factor in 
that increase has been the growth in the number of students who 
are eligible for assistance.
    In part, it seems to be that because people have lost their 
jobs, they are going back to school to get the skills they need 
in order to be able to get their next job. So I am glad that 
the President's budget places a high priority on maintaining 
the current amount of the Pell Grant.
    Given the importance of higher education and helping to 
prepare students for the jobs of the future, as you pointed 
out, and the importance of education in setting the stage for 
economic growth, cutting back on student financial aid is not 
something that we ought to be doing when the need is so high.
    And again, as you have pointed out, to maintain Pell, the 
budget proposes some difficult trade-offs that would produce 
savings that could be dedicated then to the Pell program.

          HOUSE-PASSED 2011 APPROPRIATIONS BILL AND PELL FUNDS

    In contrast, the 2011 appropriations bill that passed the 
House, H.R. 1, last month responds to the growth in the number 
of students eligible for Pell by cutting grant amounts for the 
9 million people in the program, including an $845 cut in the 
maximum grant amount. That reduction, as I looked at it, would 
take us back almost 40 years on the proportion of college costs 
that would be covered by Pell. And I believe that is accurate, 
but I will have you answer that in a second.
    I'd like to explore with you for a minute what is happening 
to State budgets. Let me hold up this Wall Street Journal 
article which was out yesterday. The Wall Street Journal this 
week reports about Pennsylvania, where the State is cutting 
spending for universities by 50 percent. What that means is 
that tuition is going to be higher for people going to school 
at this critical moment.
    With State cuts and the Pell Grant cuts, aren't we putting 
college out of reach of working families? And in fact, is this 
a plan to kill the middle class in America?

            IRONY OF UNFILLED JOBS DURING HIGH UNEMPLOYMENT

    Secretary Duncan. So my overarching concern is that, at a 
time of high unemployment, and today it is actually 
staggering--we have a couple million unfilled jobs in our 
country. And people say, how is that possible at a time of high 
unemployment that you have unfilled jobs? The simple fact is we 
are not producing enough workers, knowledgeable workers with 
the skills to fill those jobs. And President Obama and I met 
with a number of CEOs, and it is interesting how many of them 
said, we are trying to hire now, we just can't find the workers 
who can fill these jobs.

              NEED TO INCREASE RATE OF COLLEGE COMPLETION

    In a globally competitive, knowledge-based economy, the 
only way we keep those jobs in this country is if we continue 
to dramatically increase the number of young people, not just 
graduating from high school but going on to some form of higher 
education, 4-year universities, 2-year community colleges, 
trade, technical, vocational training schools, whatever it 
might be. And we have to educate our way to a better economy 
and we have to produce the knowledgeable workers that can fill 
those jobs and drive down unemployment. We cannot scale back on 
Pell Grants.

              IMPACT OF H.R. 1 ON AFFORDABILITY OF COLLEGE

    Ms. DeLauro. Is this the lowest level in terms of 
proportional cost for the last 40 years for Pell?
    Mr. Skelly. Thirty-eight years.
    Ms. DeLauro. Thirty-eight? Well, that is close, that is 
close.
    What is your view of the effect that the cuts have on the 
ability for kids to go to college?
    Secretary Duncan. Well, there is no question that many, 
tens of thousands, if not hundreds of thousands, of students 
would have to drop out. And we look today at why young people 
leave college, 52 percent the majority today leave college due 
to financial challenges. And so, at a time when college has 
never been more expensive and never been more important--as you 
know, our families across the country are struggling--and so to 
scale back on this desperately needed ability to create that 
opportunity through Pell Grants, again, just does grave 
disservice not just to our country's young people but 
ultimately to our economy.
    Ms. DeLauro. I presume from what you have said that 
universities and community colleges are not in a position to 
make up this difference and are dealing with their own 
pressures.
    Secretary Duncan. Well, we are actually trying to get them 
not to continue to drive up tuition exponentially. And so they 
have to contain costs in very tough budget times. And we need 
to continue to support young people and families who are 
struggling to go to college, absolutely.

          INDIVIDUALS WITH DISABILITIES EDUCATION ACT FUNDING

    Ms. DeLauro. Just quickly, there are a couple of seconds 
left here. IDEA is funded at only 17 percent of the promised 40 
percent of the Federal statutory commitment. These are 
difficult fiscal times and many argue that the Federal 
Government needs to do more to meet its mandate for special 
education spending. How do you answer that concern?
    Secretary Duncan. It is an absolutely valid concern. And 
when I managed the Chicago public schools, I lived at the other 
end of that. We asked for a significant increase for IDEA 
Grants to States. We asked for more also for the Infants and 
Families with Disabilities program. It is never enough. It is 
never as much as I would like; we have asked for increases in 
IDEA and Title I every single year, but is it enough in an 
ideal world? Of course not. We would love to be able to do 
more; we are just in a very tough budget time.
    Ms. DeLauro. So, in fact, we are looking at an unfunded 
mandate on the States that is 17 percent when we committed to 
40 percent?
    Secretary Duncan. It continues to be an unfair amount----
    Ms. DeLauro. Thank you.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Thank you.
    Mr. Flake.
    Mr. Flake. Thank you.
    Thank you, Secretary Duncan.

              HEAD START AND EARLY LEARNING CHALLENGE FUND

    With regard to Head Start, you are familiar with a recent 
study that came out, a survey of 4,600 preschoolers randomly 
assigned, either Head Start or no program, the control group; 
114 different measures, academic skills, socioeconomic 
development, health status. The survey found no statistically 
relevant effects from Head Start programs by the end of first 
grade.
    The Department seems to recognize that there is a problem 
here. It is a $6 billion program, but instead of going in and 
trying to correct or do something different, we are laying on 
another program; $350 million you are seeking for a new 
unauthorized program entitled Early Learning Challenge Fund. 
Tell me how this is going to be different. If we are learning 
that there are problems with Head Start, why aren't we going to 
fix those? My assumption is that we aren't diminishing any 
funding for Head Start, but we are laying on this new program. 
Why is it different, and how is it different?
    Secretary Duncan. As you know, Congressman, Head Start is 
administered by HHS. We have worked in close partnership with 
them, and they are actually starting to do business very 
differently. They are making--where programs are not of high 
quality, HHS is making those local sites recompete for those 
funds. And if HHS doesn't see improvements, those sites will 
lose those funds.
    So, to me, the question is not, should we invest or not 
invest? I think we absolutely have to invest, but your point I 
couldn't agree with more; we have to invest in quality. And if 
we are investing in low quality programs, that are not changing 
children's lives and that are not helping; it is not the right 
thing to do for taxpayers.
    So we continue to drive quality with HHS through Head 
Start. And our Early Learning Challenge Fund is just geared to 
do two things, to create opportunities for early learning 
programs in disadvantaged communities and to make sure they are 
of high quality. If we can do those things, I would argue to 
you that high quality, early childhood programs are arguably 
the best investment we can make if we are serious about closing 
the achievement gaps and leveling the playing field.

         IMPROVING AND INVESTING IN HIGH QUALITY EARLY LEARNING

    Mr. Flake. Well, I haven't seen the Department of Education 
identify with HHS the problems with Head Start. If you are 
unable to identify those problems, how in the world can you do 
any better a with $350 million program? And why should we have 
any confidence that you will do anything different?
    Secretary Duncan. It is a very fair question.
    So there are lots of factors that lead to high quality, and 
when we are looking at outcomes for students where this is 
glorified baby-sitting, where it is not making a difference in 
students' lives, we can't and should not, as an Administration, 
continue to support that. I absolutely agree with you.
    Where it is high quality, we need to create greater access 
to those types of programs.
    Mr. Flake. Well, I would like to see then the 
recommendation for a cut in those funds. They are on the HHS 
side, but I don't think we are going to see it. We haven't seen 
it.
    Secretary Duncan. Where you and I might disagree is, to me, 
the goal should not be to cut the funds; the goal should be to 
reinvest in the high quality programs to continue to create 
opportunities. I worry desperately about young people who come 
to school in kindergarten, some of whom have never been read 
to, who do not know the front of a book from the back of a 
book. And how are we ever supposed to give them a chance to 
compete academically and be successful long term if we don't 
start to give them enriched, high quality early childhood 
programs? So the goal is not to walk away. The goal is to make 
a difference in those students' lives.
    Mr. Flake. Well, I am not trying to absolve the previous 
Administration. We spent a lot of money there, and we shouldn't 
have. But this Administration has been in 2 years, and I still 
haven't seen any identification of the problems there. It is 
just kind of vague, ``we will do better.''

                            ARPA: EDUCATION

    And so let me move to another program quickly. You are 
requesting $90 million for this Advanced Research Projects 
Agency: Education. It is similar to new technology programs in 
other agencies. What is that?
    Secretary Duncan. So we have tried to learn a lot from the 
Defense Advanced Research Projects Agency, DARPA. And I think 
DARPA over the years has led to some extraordinarily important 
advances for our country. And I think technology has not 
transformed education like it has in other areas. Technology 
has transformed how we do business. It has transformed how we 
interact socially. At a time of declining revenue, I think 
technology can potentially lead to breakthroughs and 
productivity in education. And we want to invest in places that 
will be sort of cutting-edge, over-the-rainbow type 
opportunities that could dramatically improve student 
achievement, perhaps at a fraction of the cost. We don't think 
there is nearly enough investment in R&D in this space.
    Mr. Flake. Do you really think that we should believe that 
the Department of Education can outguess the market here and do 
better than the private allocation of resources toward these 
programs?

         FUNDS FOR BREAKTHROUGH EDUCATION TECHNOLOGY, PROGRAMS

    Secretary Duncan. We are absolutely not trying to outguess 
the market. We are trying to support the market and trying to 
take to scale leading-edge work, cutting-edge work that could 
help students be much more successful than they are today. The 
idea that we deliver education 6 hours a day, 5 days a week, 9 
months out of the year is a 19th century model. With cutting-
edge technology, we can start to deliver content 24/7 and 
engage students in very different ways and start to close these 
achievement gaps.
    Mr. Flake. In order to help the market, you have to take 
money out of the market to do this, and I just don't think it 
is good investment. Thank you.
    Mr. Rehberg. Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman.
    Thank you for yielding me the time.
    And thank you, Secretary Duncan, welcome back to the 
subcommittee. Thank you for your testimony.

         E-BOOK TECHNOLOGY--REVISITING ``SEPARATE BUT UNEQUAL''

    Earlier this year, Chicago State University in my district 
provided incoming freshman class students with an iPad. Over 
time, as new classes enroll, the Administration at CSU hopes 
that all students and teachers will be using electronic reading 
devices for their textbooks and to submit all assignments. They 
expect to be a textbookless campus within 4 years. These are 
the Kindle devices which can download any e-book in the e-book 
sphere. And as I see it, more and more bookstores are beginning 
to close, like Borders bookstores' recent announcement to close 
200 of 508 stores.
    I can't help but feel that education is moving in this 
direction as well. The idea of a textbook education will soon 
go the way of the dinosaur. Soon, local schools, local 
libraries will be closing because of the ease with which these 
devices bring books to the end user, local libraries in every 
jurisdiction in this country, including local libraries in our 
public schools.
    Based on the way education is funded based on local 
property taxes, it is clear to me that, soon, some local school 
systems will be choosing these devices over textbooks as well. 
We are moving toward a time when paper books will be phased 
out, and consumers will be using electronic devices like the 
iPad, Kindle and the Nook, exclusively.
    Mr. Secretary, with school districts struggling in these 
tough economic times and many without the resources to purchase 
these devices, we are quickly approaching revisiting Brown v. 
The Board of Education and the question of separate and unequal 
schools; not by race, but by resources and technological 
advantage that is likely to be compounded by the issue of race.
    I am wondering what is the Federal Government's plan to 
ensure that no school district is left behind in acquiring 
these kinds of textbookless devices. I am wondering what the 
Federal Government's plan is to ensure that, by virtue of local 
property taxes, students will not be trapped in some school 
districts with outdated books, while other school districts are 
replacing textbooks with these devices? What is the Federal 
Government's plan and will the President make a request to 
close the gap for those school districts that will be left 
behind as other school districts move away from textbooks to 
these devices:
    In addition to that, I am hoping that you might be able to 
share some insight as to whether or not the Obama 
Administration is willing to coordinate with the Justice 
Department to defend the civil rights of these students against 
local property tax schemes that will deny them access to the 
fundamental right to learn if in fact they don't have access to 
these devices. I will reserve the rest of my questions, Mr. 
Secretary, and I hope that you will give us an answer.
    Thank you, sir.
    Secretary Duncan. Really thoughtful question.

          NEED TO ENSURE EQUAL ACCESS TO EDUCATION TECHNOLOGY

    A couple thoughts, big picture--this move from print to 
digital I think is a fantastic move. It will actually save tens 
of billions of dollars going forward and will create, I think, 
much greater access, particularly in disadvantaged communities. 
So this is not a change or transition that we should fight. We 
should embrace it. We should accelerate it. But to your point, 
it has got to be equitable access.
    And I think the savings, particularly to poor districts, 
will be very significant going forward. They can direct scarce 
resources to this, at a fraction of the cost of what they have 
been spending in other areas and engage students, again, 24/7, 
not just a couple of hours a day.
    We need to continue to move much faster in education. 
Education has lagged behind business, lagged behind social 
networking in really embracing technology. So I think this is a 
very healthy move, but we have got to provide access.
    So a couple of thoughts, we have done a tremendous amount, 
not just our Department, but the FCC, the Department of 
Commerce, the Department of Agriculture, to really increase 
broadband access, and whether it is inner city communities or 
rural communities, there have been massive investments there to 
try and close the digital divide, and we are going to continue 
to invest there.
    Our e-Rates program, we are looking to provide much more 
flexibility there, so folks can use our resources to do that.

                    EQUITY AND EXCELLENCE COMMISSION

    But your fundamental question about inequities we take very 
seriously. As you and I know, I lived on the tough side of that 
equation, leading the Chicago public schools, and we actually, 
in the past couple of weeks, launched an Equity and Excellence 
Commission to evaluate these issues. We have some extraordinary 
experts from around the country who are going to give me some 
very clear recommendations. And I think----

           ENSURING EQUITY IN ACCESS TO EDUCATION TECHNOLOGY

    Mr. Jackson. Before my time completely expires, and I know 
the chairman is honoring the time, I just want to reiterate or 
ask the question again: Is the Obama Administration willing to 
coordinate with the Justice Department to defend the civil 
rights of these students when, and it inevitably will happen, 
when these local school districts resist moving in the 
direction of providing these students with the access that they 
need through these devices? They are going to resist, just as 
sure as I am sitting here, and they are going to question 
whether or not you have the right to move in the direction of 
these devices.
    Secretary Duncan. We will always partner with the 
Department of Justice to defend students' civil rights.

               ESEA REAUTHORIZATION AND BUDGET PRIORITIES

    Mr. Rehberg. Mr. Duncan, one of the advantages I have in 
going last is having an opportunity to listen to people prior 
to my question, and I listened very carefully to Mr. 
Alexander's question, and you did not answer it.
    The question becomes if ESEA reauthorization is not 
completed before our markup, what are you going to do? So I 
will ask it in a little different way, but it is an either/or 
question, and that is, with Pell Grants that you have built 
into your proposal--and you are touting the fact that your 
budget increase is a little over 4 percent, which is not 
necessarily true when you consider the Pell Grant increases. 
And so the question is, would you rather we cut $15.3 billion 
from your budget to cover the shortfall in the Pell Grants if 
the changes do not occur in the authorizing committees--because 
nobody believes they can be done that quickly--or would you 
rather we cut the grant amounts?
    Secretary Duncan. My choice is neither on those two 
choices.
    Mr. Rehberg. Well, you don't get that choice, because 
unfortunately, we have to make appropriations decisions based 
upon authorized legislation that makes it through Congress. And 
so there is going to be no choice for us. If the changes do not 
occur before Pell Grant funding occurs at the end of this 
markup, a choice is going to have to be made. Are you willing 
to cut your budget $15.3 billion, or would you rather we cut 
the Pell grant awards?
    Secretary Duncan. What I want to do is continue to work 
with Congress to invest in these critically important areas.

               IMPACT OF H.R. 1 ON PELL GRANT RECIPIENTS

    Mr. Rehberg. I don't deny that, and I entirely agree with 
you. We want the ability, to pay for the Pell Grants. We 
certainly want the ability, so before you answer the either or 
the or, because it is one or the other, would you share some 
information with me then. I have seen reports that are out 
there that have so far gone unchallenged that under H.R. 1, 1.7 
million students would lose their Pell Grant altogether; is 
that true or not?
    Mr. Skelly. Mr. Rehberg, our estimate is that, under H.R. 
1, that only 10,000 students would lose their Pell Grant 
completely. It would be devastating to the over 9 million 
students who get Pell. They would all lose at least $845.
    Mr. Rehberg. But it was reported that 1.7 million would 
lose their grants entirely. That is not correct?
    Mr. Skelly. That is not the way the math works.
    Mr. Rehberg. We didn't think so either. But so far, that 
has gone unchallenged. Okay.

                     GROWTH IN PELL GRANT RECIPIENTS

    So would it be safe to say as well, following on the 
Ranking Member's line of questioning, that there are more 
people, certainly more people that are entering the Pell arena 
because of the economy--unfortunately the failed economic 
stimulus that we are having to deal with, but the question then 
becomes, are there more people on Pell as a result of an 
increase in eligibility as well?
    Secretary Duncan. I think there are more people on Pell 
because there is an increasing awareness that you have to have 
some form of higher education to compete in this global 
economy.

              ELIGIBILITY CHANGES INCREASE PELL RECIPIENTS

    Mr. Rehberg. But the question is, are there more people on 
Pell Grants today as a result of a change in Congress in recent 
years in eligibility?
    Mr. Skelly. Some of the change is due to changes in 
eligibility. You had changes in 2007 and 2008 legislation, and 
it increased the number of people who would be eligible for 
Pell Grants.
    Mr. Rehberg. Do you know how many that would be, 
approximately?
    Mr. Skelly. I know that, since 2008, we have had a large 
increase. We have gone up over 50 percent in the number of 
recipients.
    Mr. Rehberg. So it was about 4.5 million up until that 
point, and an additional 4.5 million recipients after the 
change in criteria or eligibility?
    Mr. Skelly. It went from roughly 6.2 to 9.6 million 
recipients.
    Mr. Rehberg. Okay.

           OTHER FACTORS INFLUENCING RISE IN PELL RECIPIENTS

    Mr. Skelly. And of the change, about 40 percent of it was 
due just to the growth in the number of students. Some of that 
related to the economy, growth in schools. About 14 percent of 
it was legislative changes in the need analysis formula. About 
22 percent was just from this year and the two Pell process 
that was legislated in 2008. And another 25 percent of it was 
the change in the maximum grant; it was increased by $619.

             TOUGH BUDGET CHOICES IF ESEA NOT REAUTHORIZED

    Mr. Rehberg. Returning to my prior question, because again, 
realistically, it is nice to give us a budget presentation that 
shows that you would like the changes that are going to occur 
in other committees. Those are the authorizing committees, 
which we have no say over. We are strictly the money committee. 
Would you rather we cut your budget to cover the shortfall in a 
semi-mandatory Pell Grant program, or would you rather we cut 
the grant level?
    Secretary Duncan. Again, you may not be happy with my 
answer. I think Congress and the Administration have to work 
together to protect our Nation's students, and Congress should 
not let process and procedure get in the way of what is the 
right thing to do here.
    Mr. Rehberg. Well, process and procedure is called the law. 
It is the law of the land. It is the rules that we follow. We 
don't have any choice. If something does not make it through 
the House, the Senate, the conference committee and get signed 
by the President, it doesn't matter what I want or you want. I 
want what you want. I am sure the minority wants what you want. 
We want what you want, but if we can't do that, we have no 
choice; we are going to have to make a decision. And the choice 
is, are we going to cut somewhere else within your budget, or 
are we going to have to cut the allowable grant level? There is 
no choice.
    Secretary Duncan. Again, I would say we shouldn't--we 
shouldn't put our Nation's young people or the country itself 
in that position. I think we as leaders in this country have to 
work together to do better.
    Mr. Rehberg. Ms. Roybal-Allard.
    Ms. Roybal-Allard. Welcome, Mr. Secretary.

                     CAREER AND TECHNICAL EDUCATION

    Just in general, the concern I have about the budget is 
that it seems to be looking toward future students at the 
expense of current students. And you mentioned earlier the fact 
that we can't find American workers to fill some of these high-
paying tech jobs. And the President himself has given a very 
strong emphasis on the need to educate our children in high-
skill, high-demand career fields, such as STEM and other 
disciplines that are vital to keeping our Nation competitive in 
our global economy.
    So I was surprised to learn that funding for career and 
technical education has been slashed by $264 million in the 
President's budget. This is a program, as you know, that 
provides career pathways for high school and college students 
in precisely the high-wage, high-skill, high-demand career 
fields that the President and that you have been talking about.
    And I can attest to the fact that in my own district, I had 
students who participated in the program in Downey, in Warren 
High School, and as a result, they outperformed their peers in 
English and math, boasting a 94 percent proficiency rate in 
both subjects and an impressive 97 percent graduation rate. So, 
at a time when we are trying to increase high school and 
college graduation rates and train our people for high skill 
jobs, what is the rationale for cutting this program, which 
successfully helps to make students competitive in our world 
economy and has also been shown to lower the dropout rate?
    Secretary Duncan. No, it is a great question, these have 
been very, very tough choices. I will also tell you that when I 
managed the Chicago public schools, we did a pretty thorough 
analysis of the students involved in our career and technical 
education programs. And to your point, we actually saw higher 
GPAs and higher graduation rates. So it wasn't just about those 
classes; it was really doing something to better engage 
students in school overall.
    We still have a billion dollar investment there. We made 
some very tough decisions. Honestly, as we looked across the 
country, we saw some very high-performing CTE programs, and we 
saw others that weren't quite getting the results, and they 
weren't leading to real jobs and real skills.
    And so, given the extraordinary difficult budget climate we 
are in, we invest where we must. And our hope is those programs 
will increase in quality, and then to come back and increase 
our investments. But if you look across the country, the 
results have been pretty uneven, and given the very tough 
budget times, we want to raise quality and then come back and 
increase our investment.

                FUNDS FOR FORMULA AND COMPETITIVE GRANTS

    Ms. Roybal-Allard. Well, I guess that brings me to my next 
question because I think that you would agree that now more 
than ever school districts need a reliable and sustainable 
Federal funding in order to plan for their school year, to keep 
teachers in the classroom and to keep school reform efforts on 
track.
    And since we are not fully funding our formula programs 
aimed at helping the poor, I am concerned that your budget 
request shows a preference for new competitive grants.
    And while I understand and appreciate what you have said 
and the Administration's focus on rewarding innovative and 
effective programs, my fear is that these competitive grants 
will favor school districts with the resources and the capacity 
to write grant applications at the expense of those districts 
which have the greatest need but have fewer resources and less 
expertise in writing these grants. And that is a realistic 
concern.
    So with school districts struggling just to provide the 
basic educational services, is this really the right time to be 
increasing funding for new grants, like the Investing in 
Innovation Fund and Race to the Top, at the expense of our core 
formula programs, like Title I and IDEA.
    Secretary Duncan. No, it is a really thoughtful question, 
and to be very clear, 84 percent of our budget goes to those 
formula programs, and a small percent, 16 percent, goes to the 
competitive side. And as you know, we are actually looking for 
increases in ESEA, Title I funding and IDEA funding and want to 
continue every single year to increase our investments there.

             IMPACT OF RACE TO THE TOP COMPETITIVE PROGRAM

    At the same time, we can't just do formula funding. We have 
to challenge the status quo and get better. And what I would 
argue or try to get you to see is that with Race to the Top, it 
wasn't about the States that won. It was a change for the 
country. So California didn't win, but California is one of 41 
States that raised standards. I would argue that having higher 
standards, college-encouraged standards, for every child, 
particularly disadvantaged children and children of color, has 
been desperately missing in this country. We have dummied down 
standards. We have lied to children, and we have done the wrong 
thing by them.
    So a smaller number of States won that money; but 41 States 
raised standards; 44 States are working together on better 
assessments. About three dozen States created more innovative 
opportunities in their States. Every State eliminated their 
laws prohibiting the link to student achievement and teacher 
evaluation. So it is not just those States that won; 46 States 
now have roadmaps for reform, and they are moving forward.
    We do want to invest at the district level, and we do want 
to have a rural set-aside. We understand those challenges, but 
we have to continue not just to fund formulas but to move the 
country. And I would argue for a small percent spent, we are 
seeing more reform in the past 2 years as a result of Race to 
the Top than we have in two decades.
    Mr. Rehberg. Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.

                 PROGRAM CONSOLIDATIONS AND FLEXIBILITY

    Mr. Duncan, in your testimony, you said that the 
Administration has envisioned a smaller Federal role focused on 
key priorities, one would include consolidating those 38 
existing programs.
    Since 1985, the inflation-adjusted Federal spending on K-12 
education has increased by 138 percent. Since 1960, real per-
pupil Federal education expenditures have tripled. However, 
since the 1970s, math and reading achievement scores have 
remained relatively flat. So could you elaborate to us how the 
Department's budget request would achieve the smaller Federal 
role in our education system while making tough choices? And 
how would this vision decrease many of the burdensome and 
ineffective Federal mandates that our local school districts 
have to deal with?

                  FLEXIBILITY TO HELP MEET LOCAL NEEDS

    Secretary Duncan. So a couple of thoughts there. First of 
all, in very tough budget times, we are trying to provide 
maximum flexibility at the State and local level. And in fact, 
last week, in a meeting with the Governors, we handed them a 
document, which we would be happy to get you, demonstrating the 
flexibility that we want to provide to them now, but also 
trying to let them understand, if we reauthorized ESEA, how 
much more flexibility they will have moving forward.
    [The information follows:]



    
                  BENEFITS FROM PROPOSED CONSOLIDATION

    By consolidating programs, it will make it much easier to 
deal with us. And it frees people from that sort of compliance, 
so they can focus those scarce resources on the classroom. But 
I think what you are hopefully seeing from what our 
Administration is trying to do, with a relatively small amount 
of money, is get dramatic changes and improvement. And again, I 
submit, Race to the Top, with less than 1 percent of overall K-
to-12 spent for the country, to see so many States raising 
standards, to see so many States working together on 
assessments, to see so many States doing more innovative things 
and creating more opportunities for students. From a very small 
investment for the country, a massive change. And we want to 
continue to encourage and unleash that kind of courageous 
behavior around the country.

           COMPETITIVENESS OF OLD PROGRAMS WITH NEW PROGRAMS

    Mr. Alexander. In your consolidation sheet, some of these 
programs that we know about--you know, Even Start for example 
has worked great down in the State of Louisiana; Teach for 
America, working great in some of the rural areas where 
teachers are hard to find to begin with. Can we be assured that 
some of these programs, as they are consolidated, the ones that 
are effective today can compete for funds against some of the 
programs that we don't know are effective?
    Secretary Duncan. Absolutely. And I think this is a real 
chance for the cream to rise to the top. And where programs are 
getting great results and making a difference in students' 
lives, we actually want to put more resources behind them, not 
less. For example, Teach for America competed in the Investing 
in Innovation Fund and won $50 million from us.
    Ms. DeLauro. Would the gentleman from Louisiana yield for 
one second?
    Mr. Alexander. Sure.

                      PROGRAMS ELIMINATED IN H.R.1

    Ms. DeLauro. My understanding is Teach for America, Special 
Olympics and Close Up, among others, were eliminated in H.R.1. 
They were not consolidated but eliminated in H.R.1. I just 
wanted to clarify that.
    Secretary Duncan. So, to be clear, they are consolidated in 
our budget, not eliminated. But in H.R. 1, they are eliminated.
    Ms. DeLauro. In H.R. 1, they are eliminated.
    Secretary Duncan. Yes, that is absolutely correct.
    Mr. Alexander. Okay, Mr. Chairman.
    Mr. Rehberg. Thank you.
    Ms. Lee.
    Ms. Lee. Thank you very much, Mr. Chairman.
    Good to see you, Secretary Duncan.

               IMPACT OF A VETO OF CONGRESSIONAL EARMARKS

    First of all, let me just say this, there is no doubt that 
President Obama's support for and his commitment to education, 
your commitment, this Administration's commitment to education 
is very evident in the budget, which includes funding for TRIO, 
Pell Grants, STEM education and other programs that are really 
near and dear to all of us, especially, of course, our 
constituents.
    However, the President made it very clear in his State of 
the Union address that he would veto any spending bills that 
included congressionally directed spending, i.e. earmarks.
    Now, let me just say this to you, I think I can quantify, 
as well as I know members of the Congressional Black Caucus, 
can quantify how earmarks have benefitted our districts, which 
provide literacy programs and mentoring, after-school tutoring, 
technology utilization, safety programs. I could go on and on 
and on.
    My concern is that these vital educational programs 
supported by earmarks are now, if we put them in, of course, 
would be vetoed. Now the reality is, though, that the 
elimination of earmarks, you know, is not anything new in terms 
of the support.
    I was just quite surprised that the President recognized 
that he supports these communities that don't have the 
technical capacity maybe to write these competitive grants, but 
who provide these services for our children and who educate our 
children. I know he is committed to that. I was surprised that 
he would say no more of this.
    Secondly, let me just say, and I know this is 
controversial, but I know for a fact that in our districts, I 
know members of the Congressional Black Caucus' districts, 
these earmarks leverage private funding and foundation funding. 
So you are talking about a $250,000 or $300,000 earmark that 
leverages $1 million, $1.5 million. Now this administration has 
really cut that and these organizations that provide these 
school services, cut the rug from under them.
    And so I am wondering, and we have written to the President 
and to the White House, to ask, what do you intend to do to 
help backfill these badly needed school programs that now are 
lost without this funding?

                           CHILD POVERTY RATE

    Secondly, at the same time, let me just say this, the 
President's budget includes an increase for ESEA Title I, but 
it is not targeted to those students and schools with the 
greatest need, again. Unfortunately, the earmarks had to make 
up for these losses, and now we don't even have that. According 
to First Focus, from 2008 to 2009, America's children that live 
in poverty, mind you, grew by 2 million, or close to 2 million.
    In 2009, child poverty rates reached a level of 20.7 
percent, which is a rate of more than 1 in 5, totaling 15.5 
million children. So this makes it even more important to 
target Title I finding via formula grants to the schools with 
the greatest needs. So, again, it is a double-whammy. You know, 
you are not targeting resources to those schools. You have cut 
earmarks where all these badly needed school programs, 
supplemented by private and corporate donations, now are gone. 
So what do we do in the absence of this? And what do you all 
intend to do to backfill these small little earmarks that have 
helped our children become educated young people?

                    PROMISE NEIGHBORHOODS INITIATIVE

    Secretary Duncan. So there are a number of different ways 
to think about this, I will just give you one example, the 
Promise Neighborhoods initiative. So you and I have talked, and 
I have visited your schools and know the tremendous need, and 
the hard work and leadership that is happening there. I am 
going to do everything I can to be supportive. So when you lose 
that $300,000 or $400,000 investment and that leverage to a $1 
million or $2 million from the outside, that is tough. I 
understand that.
    Promise Neighborhoods initiative, we have a $150 million 
request there. And we want to work in the most distressed 
communities, this is not about fancy grant proposals. This is 
about going where there is tremendous need. And there is a 
chance to bring significantly new resources, additional 
resources to our most distressed communities and to increase 
that leveraging ability that much more at the local level.

            JOINT FEDERAL EFFORT TO HELP CHILDREN IN POVERTY

    I also say that I take very, very seriously the concern 
about many more children living below the poverty line. And we 
can't just do this by ourselves. This is why Head Start, which 
goes back to Congressman Flake's question, I think that is why 
that is so important to be of high quality, but we have to 
provide greater access to children who live below the poverty 
line. We have to work with the Department of Agriculture to 
increase the nutritional value of meals, because so many of our 
children are not eating three or even two meals a day. And I 
just want to assure you that, working with HHS, and working 
with HUD, working with the Department of Agriculture, we have 
to holistically think about how we support those children in 
poverty.
    Ms. Lee. Mr. Secretary, I appreciate your response and I 
appreciate what you are doing, but let me just say these 
educational programs and school programs do not really have 
lobbyists here. They do not have the technical capacity to 
write these grants. They educate children. They fill the holes 
that the public school system has left in terms of the void 
because of disinvestment of our minority children. And so I 
still don't understand how you are going to backfill these 
millions of dollars that have been lost because of the 
elimination of earmarks.
    Mr. Rehberg. Mr. Flake.

            CONSOLIDATION AND PROGRAM ELIMINATION PROPOSALS

    Mr. Flake. Thank you, let me get back to the request for 
funding for new programs and authorized programs here. You 
recommend consolidation of certain programs. That is laudable. 
That is often recommended and rarely done. I would be willing 
to guess and bet that this time next year, we will be talking 
about more programs, the addition of new programs, but the 
consolidation or getting rid of some of these programs, we just 
do not see it very often. Why should we have the confidence 
that that is really going to happen, if we are talking about 
new programs being created that seem to duplicate some of the 
programs that we are consolidating or getting rid of?
    Secretary Duncan. So we are absolutely committed to doing 
this. We did it in the 2011 budget. And again, all I can ask is 
that you look at our track record and look at our integrity, 
and we are asking Congress for the right to do this. And so we 
are absolutely committed to consolidating 38 to 11. We are 
absolutely committed to eliminating 13 that don't work. And we 
want to invest in those things that have the highest leverage 
to make the greatest difference in students lives.
    And again, hopefully, you see the way we have worked, that 
every single day we are trying to challenge the status quo, in 
which our country has an unacceptable dropout rate, in which 
our country has gone from first to tenth in the world in 
college graduates. We look at international results, the 
Program for International Student Assessment, PISA results, 
where our children are lagging significantly behind children in 
other countries. We have to do much better, and that is our 
only focus.

                             ARPA-EDUCATION

    Mr. Flake. Let me get back to this Advanced Research 
Projects Agency. You are seeking $50 million, and let me just 
read from your request: In addition to the $50 million in 
discretionary funding for ARPA-ED, the Administration is 
seeking $40 million in mandatory funding from the Wireless 
Innovation Fund to support the improvement of early childhood 
through postsecondary education through the mandatory 
appropriation for the Fund of Improvement of Education. The 
Wireless Innovation Fund will be financed by the sale of 
spectrum bands by the FCC, and its main purpose is to spur 
innovation and the use of wireless technology.
    Do you have any estimate of how much money is currently 
being invested by the private sector in wireless technology?
    Secretary Duncan. I don't have it for the country. I don't 
think there has been enough investment or enough R&D in the 
education space. And again, we are trying to spur that 
innovation.

               EDUCATION WIRELESS TECHNOLOGY--TECHBOSTON

    Mr. Flake. What is the difference between wireless 
technology for the education space and every other space?
    Secretary Duncan. I want us delivering content to students 
24/7. The President and I visited a fantastic high school 
earlier this week in Boston, TechBoston, where students are 
getting their assignments on cell phones.
    Mr. Flake. But how is that a limitation of the current 
wireless technology? I can tell you, there are literally tens 
of billions of dollars being invested every year by the private 
sector in wireless technology, or something like that. And I 
fail to see how this education space is any different than any 
other business application. And to spend $40 million in 
taxpayer dollars in a tight budget environment so we can direct 
funding in chosen industries or chosen businesses or whatever 
else, just seems to me a colossal waste of resources.

                       DEFENSE-ARPA--THE INTERNET

    Secretary Duncan. Let me just challenge you a little bit, 
the investment in DARPA led to the creation of the Internet.
    Mr. Flake. Well, let me just say that I don't think anybody 
has any confidence that the Department of Education through the 
use of taking--remember, you have to take it out of productive 
market-based capital allocation. Government takes it and then 
gives out grants in this fashion, through the Department of 
Education, where we have conceded that there are literally 
dozens of programs that we are consolidating and getting rid of 
because they haven't worked well, how anybody should have any 
confidence that this is going to be money well spent, I just 
don't see it.
    Secretary Duncan. What is your analysis of what DARPA has 
spent over the years and whether that investment has been 
worthwhile?
    Mr. Flake. That is miles away from what we are talking 
about here with the Department of Education. I think when you 
want to talk track records, then let's talk track records. And 
then somebody would point out specifically, how in the world 
can we see, when you are talking about going from first to 
tenth in college graduates and everything else, all this has 
happened since we have invested so much at the Federal level in 
education. So track records, if you want to look at track 
records, we will, but it is not pretty, and so that is my 
concern here. That is my concern.

                USING TECHNOLOGY FOR CHANGE IN EDUCATION

    Secretary Duncan. I hear your concern. I would just 
challenge you that we are seeing this massive transformation in 
almost every other sector of our society using technology that 
hasn't translated into change in how we educate our children. 
And I think if we can do that, we will save huge sums of money 
going forward and we will do a much better job of teaching our 
children. The children I saw at TechBoston were engaged in 
phenomenal ways. That has to become the norm, not the 
exception. And we have to spread those best practices.
    Mr. Flake. Thank you.
    Mr. Rehberg. Ms. Lowey.
    Mrs. Lowey. I want to apologize, Mr. Secretary, but 
Secretary Clinton is across the hall and--busy day.

          EDUCATION CUTS IN 7-MONTH 2011 CONTINUING RESOLUTION

    Thank you very much for your service. And let me first say 
that I wholeheartedly agree with you and President Obama that 
while we must exercise restraint--no one wants waste, and I can 
give you a long list of places where there is waste, not here--
it is penny wise and pound foolish to slash education spending. 
If we want to be a global leader, we must educate our 
workforce.
    And that is why I am so dismayed with the draconian cuts 
that the Republicans have sought in the 7-months fiscal year 
2011 CR.
    Let me provide a quick example of how it would hurt New 
York. One of the largest school districts in my district, New 
Rochelle, had around 2,000 employees a year ago. After a round 
of budget cuts last year and the forecast of additional cuts 
this year, it may end up losing nearly 10 percent of its 
workforce. The Governor has proposed a $1.5 billion reduction 
in education spending. And if the shortsighted CR were to 
become law, New Rochelle would lose an additional 5 percent of 
its ESEA Title I funding and IDEA.
    It doesn't make sense. Because of these cuts, the school is 
forced to lay off teachers, eliminate curricula. The House 
Republican CR hurts education from cradle to grave. Graduation, 
here is what to expect if the Republicans have their way--and I 
am hoping we can work in a bipartisan way and work it out--
200,000 fewer children enrolled in Head Start; an end to 
quality education and news programming through public 
broadcasting. School districts and community organizations 
would lose billions in after school, TRIO, Title I, IDEA 
funding. College students would have their Pell Grants 
decreased. To me, this is unacceptable. We cannot win the next 
century by decimating the initiatives we need to ensure today's 
students will become tomorrow's entrepreneurs and innovators.

            21ST CENTURY COMMUNITY LEARNING CENTERS PROGRAM

    Now, I don't know if anybody, and I apologize, spoke about 
after-school? Good. Because that has been a real priority of 
mine. I remember when we worked in a bipartisan way to make 
sure our kids had after-school programs. I strongly support 
after-school education. And I am appreciative of the $100 
million increase you proposed for the 21st Century Community 
Learning Centers Program. This is in stark contrast to the $100 
million cuts the Republicans propose in the fiscal year 2011 
CR.
    Can you tell us how many fewer students and families would 
lose after-school programs if the 21st Century Community 
Learning Centers program were cut by $100 million?
    Secretary Duncan. Well, that $100 million would represent 
close to a 10 percent cut. So that is the impact it would have. 
And I'll just say quickly that I got my start in education as 
part of my mother's after-school program, so this is in my DNA. 
And this idea of a school being open 6 hours a day, 5 days a 
week, just doesn't work. It doesn't work for two-parent working 
families. It does not work for a single mom trying to work two 
or three jobs trying to make ends meet. It does not work where 
you have no parents at home. And I just fundamentally believe 
our schools should be open 12, 13, 14 hours a day, with a wide 
variety of after-school programming. Academic enrichment being 
the core, but GED, ESL, family literacy nights, health care 
clinics. The more our schools become like full-service schools 
in absolutely serving the community and serving as the 
community anchors, where families are learning together, our 
children are going to do very, very well. I just don't think we 
can get where we need to go as a country engaging our students 
in these schools 6 hours a days.
    Mrs. Lowey. I want to support exactly what you have said, 
because I have been to another part--I have been all over my 
district, but the Port Chester schools, that has a very diverse 
population. Frankly the parents come in; the kids come in. They 
work together. They work on their studies. They really need 
these after-school programs. This is not an arbitrary request.

            SCIENCE, TECHNOLOGY, ENGINEERING AND MATHEMATICS

    One of my priorities is STEM education. Not only do we need 
to provide training for new STEM teachers. Current teachers 
need to improve and maintain up-to-date skills. Quickly, how 
does the request help our country's standing in STEM fields?
    Secretary Duncan. Very, very significant investment in STEM 
fields. We do a couple things, to better train the current crop 
of teachers, to recruit--the President challenged us to recruit 
100,000 new teachers into the STEM fields moving forward. We 
want to continue to expand access through increasing access to 
alternative certification programs. And we also have 
significant college scholarships for folks who want to enter 
the STEM field. So trying to work on both the future teachers 
and expand that pipeline as well as provide much better support 
for existing teachers.
    Mrs. Lowey. Thank you, Mr. Chair and Madam Ranking Member.
    Thank you for your indulgence.

                     SPECIAL OLYMPICS AND EARMARKS

    Mr. Rehberg. Welcome, it is good to have you.
    Mr. Duncan, the Obama Administration made the statement 
that they were going to veto legislation coming out of this 
Congress that has an earmark. The Special Olympics was an 
earmark, and we took it out. Would he have vetoed that bill if 
we had not taken that earmark out?
    Secretary Duncan. Again, I am not the President, but I will 
say that----
    Mr. Rehberg. Do you stand by his decision, though, not to 
support earmarks?
    Secretary Duncan. Well, we have to continue to support the 
Special Olympics. They do a fantastic job.
    Ms. DeLauro. If the gentleman would yield. It is an 
authorized program. The Special Olympics is an authorized 
program.
    Mr. Rehberg. Reclaiming my time. I didn't identify it as an 
earmark. This committee did. Your chairman, Mr. Obey, did. And 
we were just taking the recommendation of the last Congress 
that it was, in fact, an earmark.

                 EVEN START AND PROPOSED CONSOLIDATIONS

    Even Start was suggested for elimination by this 
administration, correct, by the Obama Administration?
    Secretary Duncan. We are looking to consolidate programs 
and put them into larger funding pools, yes.
    Mr. Rehberg. So the elimination of Even Start by this 
Congress was supported by the Obama Administration?
    Secretary Duncan. What we are trying to do, again, is to 
consolidate programs----
    Mr. Rehberg. That is not my question. The question was, 
Even Start was identified by this administration for 
elimination. Did you agree with or support that decision to 
eliminate Even Start?
    Secretary Duncan. We are trying to consolidate small, 
fractured programs and put them into larger funding streams.

                      IMPACT AND PAYMENTS BACKLOG

    Mr. Rehberg. I have received information from my district 
and other districts around the country on the slow payment of 
Impact Aid dollars, including one entity down in Arizona that 
we have not verified yet--we will--that are suggesting they are 
going to have to shut their doors because they have not 
received their Impact Aid. In the case of my situation, I am 
hearing there is as much as 3 years in arrears. What is the 
problem? The money is there. We have the money. The money has 
been appropriated. Is it an accounting problem?
    Secretary Duncan. No, it is a really fair question. We are 
working with a backlog that went back to actually 2006, of over 
4,000 of these claims. And that backlog from 2006 to 2008 of 
4,000 that we inherited is cleaned up. All of those payments 
have been made. And so we are still working to move forward 
from that point and expedite----
    Mr. Rehberg. So what would be the oldest?
    Secretary Duncan. I don't think there should be anything--
we cleaned up everything through 2008, and we are working very 
rapidly--through 2009, I apologize.
    Mr. Rehberg. Okay.
    Secretary Duncan. We are working rapidly. And if there is a 
situation, we would look at it, but we inherited a mess there. 
And frankly, I give our staff a lot of credit for having them 
move very rapidly to clean up some of these claims that are as 
much as 5 years old. That is unacceptable, and we have to do 
better.

            USE OF RECOVERY ACT ``STIMULUS'' APPROPRIATIONS

    Mr. Rehberg. I assume you take your direction from the 
Administration of the head office. Would you provide us with 
information showing that the stimulus dollars that were 
provided through the economic stimulus plan gave the agency's 
authority to then come back and build programs based upon the 
stimulus dollars?
    My understanding of the stimulus was that it was intended 
to be a one-time event. And so if I am under a misunderstanding 
that stimulus dollars were intended to be for ongoing programs 
or that programs would be built upon or in anticipation of 
there being follow-on dollars, I would like to have that 
provided to the committee as well.
    Secretary Duncan. Yes, sir.
    Mr. Rehberg. Okay, thank you very much.
    [The information follows:]

                          Recovery Act Funding

    The Department has urged States and school districts to use funds 
from the America Recovery and Reinvestment Act (Recovery Act) 
consistent with these four guiding principles: (1) spend funds quickly 
to save and create jobs; (2) improve student achievement through school 
improvement and reform; (3) ensure transparency, reporting, and 
accountability; and (4) invest one-time Recovery Act funds thoughtfully 
to minimize the ``funding cliff.'' In our program-specific guidance, 
the Department has consistently noted that the Act provides a one-time 
infusion of new resources that should be invested in ways that do not 
result in unsustainable continuing commitments after funding expires.
    That said, the Recovery Act authorizes new programs--such as the 
Race to the Top and Investing in Innovation programs--for which the 
Congress can provide subsequent appropriations. Recognizing the impact 
they are having on accelerating the pace of education reform in States 
and localities, the Administration's fiscal year 2012 request includes 
new funding for these programs, which we propose to codify in 
authorizing statute through the reauthorization of the Elementary and 
Secondary Education Act.

    Ms. DeLauro.

           PROGRAMS NOT INCLUDED IN THE CONTINUING RESOLUTION

    Ms. DeLauro. Thank you. Once again, Even Start, Teach for 
America, Close Up, and Special Olympics are all authorized 
programs. We live or die here by programs that are authorized 
or not.
    Mr. Flake had a question about and others had a question 
about unauthorized programs. These are authorized programs.
    Even Start, as a result of the 2-week C.R., the Continuing 
Resolution, that we are currently living under, has been in 
effect killed. And I would just say to Mr. Alexander that I 
share your view about the benefits of the Even Start program 
and the incorporation of parents in the education of their 
children.

                            STIMULUS FUNDING

    Just a clarification before I get on to my question, the 
economic recovery program was a response to the recession, to 
massive unemployment. We were looking at losing 700,000 jobs a 
month about 2 years ago. We have seen that 192,000 mostly 
private sector jobs were created last month, and we are 
beginning to see some small glimmer of recovery, but in fact, 
it is not making its way down to most of the people in this 
Nation.

             PELL GRANT REDUCTION IN CONTINUING RESOLUTION

    An $845 reduction in the Pell Grant, as has been said, 
takes us back 38 years in terms of the cost of what education 
is today. And what we are doing by this is making it almost a 
fait accompli that education becomes a purview of the rich and 
not middle class families, who with the help of Pell Grants are 
being able to take advantage of getting skills so that they can 
succeed.

               LITERACY FUNDING--STRIVING READERS PROGRAM

    Let me move on to another area which is of real importance 
to me, and that is literacy. We have more than two-thirds of 
the Nation's 4th, 8th, 12th graders scoring below proficient on 
the National Assessment of Educational Progress.
    Congress seeks to address this through the Striving Readers 
program, which was moving forward by helping 46 States put 
statewide literacy teams in place, standing ready to implement 
the program. Again, the House majority stripped away all the 
funding for the Striving Readers program in 2011. They have 
proposed to reach back and rescind the funds remaining from 
last year's appropriation. State literacy teams are now 
waiting. In addition to which, as we just had this discussion, 
the targeted funding for literacy in the budget has all been 
eliminated. If you can't read, you can't do anything, you have 
little chance for success.
    Mr. Secretary, your budget proposes to fold existing 
literacy programs, like Striving Readers, into a new 
consolidated effort to invest Federal resources in helping 
States to improve the reading skills of their students.

               FUNDAMENTAL IMPORTANCE OF LITERACY SUPPORT

    Can you talk about the importance of contributing Federal 
funds to strengthening literacy in our Nation's schools? What 
impact we can expect from this approach of the majority to 
strip away all of the targeted literacy funding that is 
essential? As a Nation how we can go back on the commitment to 
literacy is absolutely, I believe, unacceptable and it is 
irresponsible if we are going to make our way to long-term 
economic growth.
    Secretary Duncan. So if you ask why so many students drop 
out of high school, it is because many have struggled to read. 
And when they drop out of high school, they are basically 
condemned to poverty and social failure. There are no good jobs 
out there for dropouts. So we have to continue to invest in 
literacy. It is fundamental. It is foundational. If we teach 
our children to read and to love to read and to be able to 
comprehend what they are reading and to be able to express 
their ideas verbally on paper, I am very confident about what 
they can accomplish in life. And if we don't do those things 
well, Congresswoman, basically nothing else we do matters. It 
is that critically important to helping our students fulfill 
their academic and social potentials.

         CONNECTION BETWEEN PARENT LITERACY AND STUDENT SUCCESS

    Ms. DeLauro. It is a Nation going backwards in terms of 
literacy instead of forward. I just want to mention to this 
committee, a recently released NIH research effort identified a 
scientifically significant connection between the educational 
level of parents and the school success of their children. In 
light of this--understanding the role that parents play in the 
education of their children--I want to ask you, Mr. Secretary 
about how you are going to connect parents in terms of the 
education of their children and particularly about low literacy 
skills and limited English proficiency.
    Secretary Duncan. Parents have to be full and equal 
partners in their children's education. We think we have 
underinvested in parental engagement and parental 
participation. And we are actually looking to try and double 
funding there. We think parents have to be in those schools 
helping students. It is part of the answer, and teachers cannot 
do this by themselves.

                BUDGET INCREASE FOR PARENTAL INVOLVEMENT

    Ms. DeLauro. Where in the budget would we find those 
dollars that talk about parents----
    Secretary Duncan. It is an increase in parental engagement 
from--the request is from about $140 million to $280 million.
    Mr. Rehberg. Mr. Alexander.
    Mr. Alexander. No.

          BUDGET PROPOSES ESEA REAUTHORIZATION, CONSOLIDATIONS

    Mr. Rehberg. Mr. Duncan, let me ask you, Striving Readers 
program, that was also slated by the Administration for 
consolidation or elimination?
    Secretary Duncan. Yes, sir.
    Mr. Rehberg. Okay. So this Congress did exactly what you 
asked it to do.
    Secretary Duncan. Again, we are trying to consolidate 
multiple funding streams that make it very difficult to deal 
with the Federal bureaucracy and get scarce resources----
    Mr. Rehberg. Does that consolidation require an action by 
an authorizing committee? The Appropriations Committee doesn't 
get to consolidate programs; we just get to figure out how to 
pay for it.
    Mr. Skelly. Consolidation is sought in the proposed budget, 
and we would like to have all of ESEA reauthorized this year.
    Mr. Rehberg. It is inside the budget, so it is in 
anticipation that it will be done in the authorizing 
committees. So, once again, my question is, if the authorizing 
committees both in the House and Senate are unable to complete 
their work in time, and have a new ESEA bill signed by the 
President what are we supposed to do?
    Mr. Skelly. The Administration is going to work with 
Congress on this, but Congress, you guys are the experts in 
your process in how you do things. Our budget proposed that we 
would have this consolidation and we hope you would get to it 
in time.
    Mr. Rehberg. So you are okay, then, with us cutting the 
budget; if the consolidation doesn't occur, we can go ahead and 
reduce this account by that subsequent amount?
    Secretary Duncan. If Congress doesn't act, a program like 
Striving Readers would be kept in the meantime.

       SCHOOL TURNAROUND, RESTART, CLOSURE, TRANSFORMATION MODELS

    Mr. Rehberg. Okay. Let me ask you a question about your 
programs, your four categories for school improvement. I know 
you have been to Montana, and I know you are well familiar with 
our Native American school situation. I also heard you say that 
you wanted to move away from a one-size-fits-all, but we just 
feel that you replaced it with four sizes fit all.
    Let me ask you, on the transformational category, which 
about 71 percent of the schools that are currently receiving 
grants are in that transformational process, that is the firing 
of the principal--is that what transformation means? I was 
trying to identify which category within the four each was. And 
I saw in the materials that 71 percent of the grants are going 
to transformational schools. Is that the firing of the 
principal?
    Secretary Duncan. It depends on the situation. If that 
principal has been there for a long time and hasn't moved the 
school forward, it would mean that. If that principal has been 
there a short amount of time and is part of an existing 
transformation movement, he would not be removed.
    Mr. Rehberg. Okay. If we are talking about a school that is 
in noncompliance and it had been identified for a period of 
years, and they fired a principal. They received the grant. 
What is the end game? Does that principal have 1 year to 
succeed, 2 years, 3 years, 4 years?
    Secretary Duncan. No, we are in this for the long haul.
    Mr. Rehberg. Well, that is what I am trying to understand; 
what is the long haul? What is the end game? I understand the 
children are the end game, but as far as your four categories, 
I am trying to make it work for rural America. How long does 
that principal have before, if they don't conform, they are 
kicked out, and we start this all over again?
    Secretary Duncan. This has nothing to do with conforming 
and not conforming. What we did through this program is we 
challenged the country to take those bottom 5 percent of 
schools, not the 95 percent, the bottom 5 percent, the 1 in 20 
where it simply wasn't working for children, and we challenged 
the country to stop tinkering around the edges and to stop 
perpetuating the status quo in which children were being poorly 
served by those schools.

              RURAL SCHOOLS AND SCHOOL IMPROVEMENT GRANTS

    I am very cognizant of rural concerns, I have spent lots of 
time talking about them. It is very interesting, rural schools 
constituted about 19 percent of the potential pool of schools 
eligible for turnaround grants, and they actually received 23, 
24 percent of the funding. So they were disproportionately 
represented. They found ways to make this work. And we have 
been very encouraged with that participation and those results. 
I was, frankly, pleasantly very surprised. I was worried we 
would not have enough rural schools competing. And they were 
actually disproportionately represented in the number of 
schools receiving money through school improvements grants.

                 EDUCATION BUDGET BASED ON CURRENT LAW

    Mr. Rehberg. Okay. You know, this being my first 
opportunity to chair a subcommittee. I have chaired 
appropriations subcommittees at the State level, but never at 
the Federal level, so this is frankly new to me. And I don't 
know if I am going to ask you to do something that is not 
standard, but would you present a budget based upon current 
law? That is all we ask, current law, because the law hasn't 
changed. The law probably will not change before we have to do 
a markup. I am asking you, will you present a budget to us 
based upon current law?
    Mr. Skelly. Last year we had a similar situation, and we 
did propose sort of an alternative or fallback of what would be 
the most important thing, the highest priorities within----
    Mr. Rehberg. Well, I am asking you to present to this 
subcommittee a budget based upon current law--not a sort of, 
not based upon your best priorities. If we are going to have to 
make decisions based upon the current law, I need a budget so 
that I can see what your priorities are and not try and guess 
it, or we are going to make those determinations, and we are 
going to get yelled at by the minority. So I am asking you to 
present to this committee a budget based upon current law.
    Thank you.
    I think Mr. Dicks is next.
    Welcome, nice to have you. I never served on a committee 
with you before.
    Mr. Dicks. Well, Mr. Rehberg, it is nice to be with you. 
Montana and Washington are close. You went to Washington 
State----
    Mr. Rehberg. You had to say that.
    Mr. Dicks. You beat us twice in basketball. So it has been 
a bad year.
    Mr. Rehberg. No, it has been a good year.
    Mr. Dicks. Thank you. I do want to congratulate you on 
becoming chairman.
    And to our Ranking Member, Rosa DeLauro, who does so much 
and is such an effective member.

         NUMBERS OF CHILDREN, STUDENTS IMPACTED BY BUDGET CUTS

    In your opinion, given the dire circumstances facing State 
and local governments, what does your Department project will 
be the impact of the Federal budget cuts on local educational 
agencies? How will they deal with $690 million less in Title I, 
more than $330 million cut in school improvement grants, $1 
billion less in Head Start funding? We are looking at a loss of 
8 percent in the education budget. How will this lack of 
financial resources hurt our children in public schools?
    Secretary Duncan. So in a time when we have to get 
dramatically better education and in fact get better faster 
than we ever have, it would be a very significant step in the 
wrong direction. On the ESEA Title I cuts, that means as many 
as a million poor children would lose access to educational 
services.
    Mr. Dicks. A million?
    Secretary Duncan. Yes, nearly a million young children. On 
the School Improvement grants, it would be more than 250,000 
children who have had historically very poor educational 
options, who are now getting better ones, would lose that. A $1 
billion cut to Head Start would mean about 216,000, again low-
income children, who desperately need to get off to a good 
start in life, would lose access. And on the Pell Grant cut, as 
Congresswoman DeLauro mentioned, as many as 8 million; 8 
million young people would see their Pell Grants cut. I would 
worry desperately about what percent of those would then have 
to leave college.
    Mr. Dicks. And there is no question that Head Start and 
these programs have been very effective and help the children. 
And there is a backlog, right? We are not still taking care of 
all the children that would like to be in a Head Start program; 
isn't that correct?
    Secretary Duncan. Quality early childhood education 
programs are arguably the best long-term investment that our 
country, our society can make.

                           IMPACT AID BACKLOG

    Mr. Dicks. Let me ask you, on another matter, Impact Aid, 
which is an issue in Washington State, I think it is probably 
in Montana as well. I have been told, and I didn't realize 
this, that it takes years and years for the Impact Aid money to 
actually get to the school district. Can you explain why that 
is?
    Secretary Duncan. The chairman asked me about that, and 
when we came here, this administration inherited a backlog that 
went back to 2006, over 4,000 cases. I am pleased to report to 
you, Congressman, that all 4,000 of those have been resolved up 
through 2009. It was a mess, and our staff has worked very, 
very hard. We are never going to go back to those days, and we 
will continue trying to expedite the more recent claims. But 
yes, there was a backlog that went back 5 years.

            IMPACT OF FEDERAL BUDGET CUTS ON PELL RECIPIENTS

    Mr. Dicks. You mentioned Pell Grants. What is the number, 
how many students will be affected? Is it 8,000, is that the 
number, who would have gotten the maximum grant and that will 
be reduced?
    Secretary Duncan. No, it is about 8 million that would see 
their----
    Mr. Dicks. Eight million.
    Secretary Duncan. Eight million Pell Grants reduced by $845 
each, and about 10,000----
    Mr. Skelly. Ten thousand.
    Secretary Duncan. Ten thousand would completely lose access 
to Pell Grants, but 8 million would be touched. As I mentioned 
earlier, more than half of the people who drop out of college 
today do so for financial reasons. They are trying to do the 
right thing. They are trying to take that next step, but 
because they simply can't afford it, that is the largest 
reason, the majority reason why people leave school today. So a 
further cut in access, I think it would be devastating.

        IMPACT OF FEDERAL BUDGET CUTS ON HIGH SCHOOL COMPLETION

    Mr. Dicks. What about the fact that one-third of the high 
school students are dropping out of school now? Do we have a 
program to address that issue? I am familiar with the Youth 
Challenge program at the National Guard. I worked on it. Do we 
need do more to help these dropouts? How will they be affected?
    Secretary Duncan. Well, couple things. We have to stop the 
pipeline of dropouts first of all. Again, that is where these 
school Improvement grants are so important, where we are 
investing in radically different ideas of what those schools 
can do and seeing huge results.
    The President and I, with former Governor of Florida Jeb 
Bush, were in Miami last Friday in a school that a year ago had 
huge problems, and we are seeing remarkable progress. And so we 
have to stop the dropout factories, and we have to have a 
safety net of alternative programs and alternative schools for 
those who do drop out and want to come back in.
    Mr. Dicks. Thank you, Mr. Chairman.

          CONTINUING RESOLUTIONS EFFECT ON IMPACT AID PAYMENTS

    I just would say one thing, we also understand Impact Aid 
has a problem under CRs, that somehow I guess they don't do 
anything--I don't understand maybe why that is, but could you 
explain that?
    Mr. Skelly. Impact Aid is one of our current funded 
programs. We give out money as the fiscal year goes on. We are 
through----
    Mr. Dicks. Halfway.
    Mr. Skelly. Just over, 45 percent. So we can give them 45 
percent of the annual level funds, but we can't give the school 
districts all the money, and some of them are counting on that 
to finalize their expenditures.
    Mr. Dicks. Thank you for explaining that.
    Thank you, Mr. Chairman.
    Mr. Rehberg. You bet.

            PROPOSAL TO ELIMINATE SECOND (SUMMER) PELL GRANT

    I have listened now to many members talking about the 
devastation, including you used the word devastation, of the 
cuts in Pell Grants. I am confused. I thought part of your new 
consolidation and elimination and your grand plan within the 
Pell Grant was to cut Pell Grants from two in a year to one. 
Wouldn't that be more devastating to the student to lose the 
$5,550 in grant aid for a second semester within 1 year?
    Secretary Duncan. No, actually, it does not cut Pell Grants 
for a second semester; it is just for the summer. They can 
actually use existing Pell Grants over the summer. So it is a 
cut, Mr. Chairman, that obviously is not one that we wanted to 
do or look forward to doing, but again, given the tough budget 
climate, we had to make tough decisions. And we thought by far 
the better investment was to support the existence of Pell 
Grants for all students rather than provide a second Pell Grant 
for some who already have access--we thought maintaining that 
access to $5,550 for all was the right thing to do.
    Mr. Rehberg. Have you anticipated how many people that 
would include, or how many that would affect?
    Secretary Duncan. Oh, yeah, we know how many it would 
affect. And again, we----
    Mr. Rehberg. Do you want to share that with us?
    Mr. Skelly. About 10 percent of all the Pell recipients in 
2009; 10 percent got a second Pell Grant and we think that 
would grow in the future.
    Mr. Rehberg. So that would be almost a million students 
would be affected, versus the 10,000 that are going to be, 
going to be affected by the $845 reduction----
    Secretary Duncan. No, no, not 10,000. It is 9 million would 
be affected by the $845 reduction. So, again, these are very 
tough calls.
    Mr. Rehberg. I understand the $845 is across the board; it 
goes from top to bottom, so those that are receiving $5,550 are 
going to see an $845 reduction. And it is on down the sliding 
scale. I clearly understand that. I am suggesting that by not 
going to the second Pell, it is going to affect what, a 
100,000----
    Mr. Skelly. No, no, 900,000.
    Mr. Rehberg. Nine hundred thousand students. So your 
suggested reduction in Pell affects 900,000 students that won't 
get any grant----
    Secretary Duncan. No, no, no, sir, you are 
misunderstanding.
    Mr. Rehberg. Okay. Then I am misunderstanding.
    Secretary Duncan. They will get--what we are trying to do 
is make sure they get the one grant of $5,550.
    Mr. Rehberg. Correct, but they can't get a second grant.
    Secretary Duncan. They cannot get a second one in the same 
year.
    Mr. Rehberg. Correct. Which was the change that was made to 
try to get kids through college quicker, to make space for the 
next group of kids coming through. And I use kids loosely, I 
know there are many that are nontraditional students who are 
going through as well; is that correct?
    Secretary Duncan. So, again, sir----
    Mr. Rehberg. By not granting the second grant, it is 
slowing down the----
    Secretary Duncan. Well, we are hoping it wouldn't slow 
down. And again, our primary focus was on supporting the 9 
million and making sure we don't see massive dropouts because 
of that.

                ALLEGATIONS OF MISCONDUCT IN STUDENT AID

    Mr. Rehberg. Okay, let me shift gears real quickly. I was 
following Mr. Coburn's conversation in the Senate last week 
about short sellers. And having been involved in the markets in 
the cattle business, I have a pretty good understanding of what 
occurs. And there is always this belief or feeling or fear that 
there is something nefarious going on within the markets that 
manipulate prices and such.
    Did that occur, the short selling in the for-profit area? 
And I have seen some of the conversation that occurred with 
conversations. I would like to know your involvement of what 
you know; have you been briefed on short selling?
    Secretary Duncan. I have never talked to a short seller, I 
don't have your financial acumen. We have one interest, and 
that is making sure more young people graduate from college 
successful.
    Mr. Rehberg. So you are not aware of any conversations that 
occurred within the Department of Education nor any under 
secretary or deputy secretaries or any--
    Secretary Duncan. We have zero sense that anything bad went 
on, and we have asked the IG to investigate. And we look 
forward to a speedy resolution.
    Mr. Rehberg. So you have had conversation on it?
    Secretary Duncan. Absolutely. We have asked the IG to take 
a very serious look at any allegations. We take it seriously. I 
would just ask you to look at our track record to date, and I 
don't think you will find one instance where folks in our 
leadership team have done anything in self interest or not in 
the interest----
    Mr. Rehberg. And I am not suggesting they are. I am just 
suggesting the issue has been raised and--
    Secretary Duncan. The issue has been raised, and we have 
asked in every one of these situations, we have asked for a 
thorough investigation.
    Mr. Rehberg. And you will share that with this committee?
    Secretary Duncan. Absolutely.
    And if anything is found, we will absolutely address it. 
But I will just say I can speak to you with absolute confidence 
today that I don't think there is a thing there.
    Mr. Rehberg. Thank you.
    Mr. Jackson.
    Mr. Jackson. Mr. Chairman, let me also associate myself 
with the news report and the concerns that have been raised 
about short selling and get a little bit of clarity on that, 
and then I want to go back to a point that I raised earlier.
    So there is absolutely no truth that senior Department 
officials communicated with short sellers from FrontPoint or 
CPMG to discuss the Department's gainful employment 
regulations. Is that what you are saying?
    Secretary Duncan. I don't have all the details. We are 
having a thorough investigation. So a thirty-party IG will look 
at it, but there is nothing that I am aware of where folks 
would have profited personally by anything we are doing. I have 
zero awareness of anything close to that.
    Mr. Jackson. Thank you, Mr. Secretary.

               POTENTIAL MOVE TO E-DEVICES FOR TEXTBOOKS

    I want to go back to a question that I raised earlier, 
because in perfect candor, I expect massive resistance in these 
tough economic times to moving school districts across the 
country to an equitable textbookless system that provides every 
child with a modern textbook or some form of e-device that 
allows them to stay current in time of news information as well 
as their textbooks. They simply don't have the money. And if 
they are minority, it will be even more complicated. The idea 
of taxing the haves to get more resources for school districts 
that have nothing or have little is an uphill struggle.
    So I want to make clear what I think I heard you say, and 
please tell me if I didn't hear you say it, that the Department 
of Education will coordinate with the Justice Department to 
ensure that school districts will not deny modern textbooks to 
students; is that correct?
    Secretary Duncan. Again, as I said earlier we have always 
partnered with the Department of Justice. Our Office of Civil 
Rights I think has done an extraordinary job over the past 2 
years, has been reinvigorated, and when we see civil rights 
being violated, we step in, in a heartbeat.

            ENSURING EQUITABLE ACCESS TO E-DEVICE TEXTBOOKS

    Mr. Jackson. Sixty million kids are about to enter your 
public school system across the country. And those 60 million 
kids are heading into an e-bookless or e-device environment 
where most of their textbooks are simply going to be wiped out 
in a very short period of time. And I want to make sure I am 
being clear: The Department of Education's position will be 
that it will be on the side of ensuring that every single child 
in that environment will have the appropriate technology to 
participate in the modern education world.
    Secretary Duncan. Let me just take a couple steps further. 
So you say districts won't have the money; it is interesting. I 
think this is actually going to save districts money. Districts 
are spending lots of money now on textbooks. I think this is a 
much more effective, much more efficient way to spend. It is a 
matter of reallocation. And so they cannot continue to spend 
the old way and spend the new way. And so they have to make 
real clear decisions there. But I think you will find less 
pressure on strained districts' budgets moving forward by being 
much more efficient in this area.
    And just to be clear, we look at not just access here, but 
access to AP classes, access to college prep curriculum. Where 
we see disparate discipline, where we see disproportionate 
numbers of African-American and Latino young boys being 
suspended, we will challenge that status quo. And so we want to 
make sure children have a chance to fulfill their potential.
    Mr. Jackson. And therefore, the Department of Education and 
the Justice Department would then, I would imagine, or through 
your Department of civil rights, but probably the Justice 
Department, would then be prepared in the event that a school 
district resists moving school children in that direction to 
bring the appropriate legal actions under historical statutes?
    I mean, it is clear to me that if I offered a proposal in 
this Congress or in a debate over the budget between Democrats 
and Republicans about providing a modern education for 60 
million children, which includes one of these devices, that I 
am not going to be able to squeeze any blood out of this 
turnip. So I am preparing to go the legal route, based upon 
historical precedence, to ensure that every single child and 
every single school district has access.
    Now that is where this is headed. It is clear because it is 
not coming from the Congress and not likely to come from the 
President's proposal. But I want to make sure that the Justice 
Department is going to be on the side of these kids in the 
event of such an action.
    Secretary Duncan. I appreciate that. And again, we just 
launched this commission that I have a lot of respect for, and 
I will make sure this commission is looking specifically at 
this issue, of this new way, this transformative way of 
delivering instruction and content to young people.
    Mr. Jackson. Thank you.
    Mr. Rehberg. Thank you.
    If it rains any more, I won't see you any more down there.
    Mrs. Lummis, welcome to the committee. If you have a 
question or if you would like to wait, I will ask one, go back 
to the Democrat side, and then ask you.
    Mrs. Lummis. Mr. Chairman, thank you, if you would be so 
kind as to go back to the Democrat side.
    Mr. Rehberg. I will go to me first, then I will go to the 
Democrat side.
    Mrs. Lummis. Thank you.
    Mr. Rehberg. All right. Great.

             EDUCATION JOBS SAVED THROUGH STIMULUS FUNDING

    If I remember correctly, and again, I don't know if it was 
your initiative or whose initiative it was, recommended to us 
last August a $10 billion emergency appropriation. And I am 
always interested in what the definition of stimulus is because 
my definition would be timely, and it would be targeted, and it 
would be transparent, and it would be temporary. And so far, a 
lot of that has not occurred. It was not necessarily targeted 
to something that would be stimulative to the economy, so 
frankly, it failed.
    The definition was changed, of course, to jobs created to 
jobs created and saved. But we don't need to have that 
discussion today because I think the proof is out in the 
marketplace of America's political opinion, and that is, where 
are the jobs?
    So the question is of the edu-jobs, the $10 billion that 
was so desperately needed so quickly, if I remember the reports 
correctly from recently, that 20 of the States haven't spent 
even 5 percent of their appropriated dollars and that only $2.5 
billion of the $10 billion has been spent. So, again, what was 
the rush? Where was the timeliness that was so absolutely 
critical to get out to save these jobs? And how does that fit 
into creating the economy that then is going to fund the rest 
of your budget as a result of an economy that hasn't turned 
around enough to pay for all of the requests that we are 
getting.
    Secretary Duncan. So if you look at the Recovery Act and 
edu-jobs together, we have saved a couple hundred thousand 
teacher jobs around the country. And we can give you and are 
happy to provide to you State By State----
    Mr. Rehberg. Saved permanently?
    Secretary Duncan. Well, I don't know if it is for the next 
50 years.
    Mr. Rehberg. Really? Two years, 3 years, 4 years?
    Secretary Duncan. We saved north of 300,000 teacher jobs 
where those teachers would have been in the unemployment lines 
rather than in classrooms.
    Mr. Rehberg. Okay.

      EDUCATION JOBS SAVED BY STIMULUS FUNDS--STATE BY STATE DATA

    Secretary Duncan. And we will give you State-by-State data 
demonstrating what we did there. I think, had we seen in these 
very tough economic times a couple hundred thousand teachers in 
the unemployment lines, not able to make car payments and not 
able to make mortgage payments, that would have been a huge lag 
on the economy.
    [The information follows:]



    
              SLOW EXPENDITURE OF EMERGENCY STIMULUS FUNDS

    Mr. Rehberg. Could I ask you to answer the question then, 
why have 20 States spent less than 5 percent if it was that 
critical for those States to have that money?
    Secretary Duncan. So States are going through a very 
difficult time. And States are using some money last year, some 
money this school year, some money next school year. They are 
trying to cushion the blow. And I think States are making or 
districts are making rational decisions to use this money, over 
very tough budget times, to take whatever steps they can so we 
don't have this disastrous impact in education we would have 
had----
    Mr. Rehberg. But it was sold to Congress as an emergency 
that it needed to be done in August. We got called back for the 
specific purpose of getting the money out the door.
    Secretary Duncan. Yeah.
    Mr. Rehberg. And with 20 States, less than 5 percent has 
been spent to this point.
    Secretary Duncan. Way more than 100,000 jobs were saved 
from that, so that was real dollars, real teachers that, again, 
I don't think you nor I would want to have on the unemployment 
line. And Congress gave--Congress passed the law, not us, as 
you know. Congress gave States and districts the right----
    Mr. Rehberg. And I laud you for the 100,000 jobs that were 
saved. My question is why was so little of the emergency money 
spent to this point?
    Secretary Duncan. Again, that is not our decision how to 
spend it. Congress gave districts the authority to spend it 
over a period of time, and States and districts are exercising 
the authority that Congress gave them.
    Mr. Rehberg. Thank you.
    Ms. DeLauro.
    I am sorry, Ms. Roybal-Allard. I apologize.

                  EDUCATIONAL TECHNOLOGY STATE GRANTS

    Ms. Roybal-Allard. First of all, Mr. Secretary, let me 
associate myself with the comments that were voiced earlier by 
my colleague Barbara Lee about the impact of consolidation, 
competitive grants and the lack of earmarking, which in fact is 
going to result in very critical programs not being able to 
leverage the Federal dollars. That is a real reality. And one 
of the areas that I am concerned about in terms of 
consolidation is, again, the Administration's proposal to 
consolidate the Educational Technology State Grants program, 
which actually complements the $30 billion investment in 
broadband, Internet access and other technology for our 
Nation's classroom.
    These grants have really been essential to State and local 
district efforts to coordinate technology purchases and train 
educators on how to use the technology, which is absolutely 
critical, because you could have technology in the classroom, 
but if teachers don't know how to use it, it is pointless.
    I have seen the value of that in the Los Angeles Unified 
School District, where thousands of teachers have been trained 
to use it in hundreds of schools. So, without this dedicated 
Federal funding, how do you expect financially strapped school 
districts to maintain their technology programs and ensure that 
educators can effectively use technology that will be made 
available to them.
    Secretary Duncan. It is a thoughtful question. Let me just 
sort of give you my sense of where the country needs to go with 
technology. Technology up to this point has been exactly this 
siloed, stand alone investment and has not transformed how we 
educate children. So you can't just go to a technology class 
once a week and think that is going to get you where you need 
to go. Technology has to be infused in everything we do, in 
every subject matter, not just in high school but going down to 
kindergarten and preschool and first grade and all the way 
through. So we see technology as not an end in and of itself, 
but it is a means to an end to get much better outcomes in a 
comprehensive manner. So we want technology infused in STEM 
areas. We want technology infused in foreign language. We want 
technology infused in the arts. It is that larger vision that 
we are supporting. And we will get you information, but I 
guarantee you, at the end of the day, our total spending on 
technology will be more than that $100 million. But it has to 
be infused across the curriculum, not as a stand alone. I think 
that is what has been missing historically in the vision for 
education.
    Ms. Roybal-Allard. I understand that, but as we are moving, 
for example, I know that there is $90 million that was in the 
Advanced Research Projects Agency. But a lot of what is being 
done is really looking to the future. And money is being 
shifted to accomplish the very things that you said, which no 
one would disagree that is the ultimate goal. But in the 
meantime, it is taking resources away from today's students and 
their teachers. So my concern is that we are going to lose a 
generation of kids because of this shift as we are looking to 
the future.
    Secretary Duncan. I just disagree with that assumption. We 
are asking for a $2 billion increase in investments for 
students now.

              COMPETITIVE GRANTS AND STATE FORMULA GRANTS

    Ms. Roybal-Allard. But everything is competitive.
    Secretary Duncan. Okay, everything, again, is not 
competitive. About 14 to 16 percent of the budget is 
competitive; 84 percent is not. And we are asking for increases 
in the basic formula programs. And I would argue, again, 
California for the first time raised standards, college and 
career standards. That is a massive breakthrough for the poor 
and minority children who have been desperately underserved in 
your State for far too long. Your mayor, your superintendent, 
your board chair and your union leaders all could not be more 
appreciative of what we did to help lead to higher standards 
for those children, and that is not for children tomorrow; that 
is for children today. That is trying to dramatically improve 
what is going on there.
    School improvement grants to LA are having a huge impact on 
those dropout factories today; not future generations, those 
students who year after year after year we are losing from your 
schools to the streets. Your dropout rates in LA are amongst 
the highest in the country, a devastating reality, particularly 
among Hispanic and African-American children. We are 
challenging that reality every single day.
    Ms. Roybal-Allard. I am still concerned about the gap that 
is being left, and I just very quickly--the example mentioned, 
Even Start has been mentioned several times. That is the only 
Federal program that integrates adult and child literacy and 
parenting education into a single program for low-income 
families. And how is that going to be filled or what guarantee 
is there that that program will be filled, because now it is a 
competitive grant? And again, these competitive grants usually 
go to organizations that have the capability of how to put a 
good graph together.
    Mr. Rehberg. I will let you answer that very quickly, 
please.
    Secretary Duncan. When we consolidate these programs, we 
are trying to get scarce resources to the communities that need 
the most help. And where there are desperately underserved 
communities, that is where we are making massively 
disproportionate investments in the children and the 
communities that need it the most.
    Mr. Rehberg. Ms. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.

       EDUCATION ROLE OF STATE OF WYOMING; OF FEDERAL GOVERNMENT

    Secretary Duncan, thanks for coming to Wyoming. A couple 
years ago you saw firsthand, you know, I think a first-class 
State education system. We have, on an adjusted-cost basis, we 
spend more per student than any other State. And I think it 
shows in the quality of our schools, our classrooms; our 
commitment is pretty extraordinary. It is required by the 
Wyoming Constitution that the State be the driver for 
education. And I think we are fulfilling our constitutional 
obligation so, of course, I am a big advocate for State-driven 
and locally-driven education decisions.
    Coming from that perspective, I hope that the direction of 
the U.S. Department of Education will be more oriented toward 
sharing best practices, helping districts that are out there 
achieve better results for kids, and not become a replacement 
for State and local control. And that is just an editorial 
comment.
    Secretary Duncan. I absolutely concur.
    Mrs. Lummis. Thank you, Mr. Secretary.

          STUDENT LOAN PROGRAMS AND STUDENT AID ADMINISTRATION

    So now I am going to go to a question on a bit of an 
another matter. I want to talk about the student loan program.
    As you know, based on the Health Care and Education 
Reconciliation Act of 2010, all Federal student loans will now 
be administered through the Department of Education. The cost 
of subsidizing the loans is on the mandatory side of budget. 
But the cost of administering the Direct Student Loan program 
generally flows through this committee. Now I note that the 
Administration's fiscal year 2012 budget request for Student 
Aid Administration is nearly $1.1 billion. This is a 26 percent 
increase above the fiscal year 2011 CR level. That is $225 
million more in 1 year.
    It appears to me that the largest driver of the cost would 
be increases in what the Department calls other services, and 
that would be origination, disbursement, loan servicing 
activities. Those are the basic activities of any bank that is 
making similar loans.
    Now I was on the budget committee when we went through this 
in last session of Congress. And we were told at the time that 
existing funds were sufficient to administer the program.

             FEDERAL ADMINISTRATION OF DIRECT LOAN PROGRAM

    So my question is this, why is an increase of this 
magnitude needed less than a year after the program was 
overhauled, and the Federal Government took it over from 
private banks? I just find this completely inconsistent with 
what we were told at the time as part of the rationale for the 
Federal Government doing something the private sector had been 
doing in my State extremely well.
    Secretary Duncan. So what we tried to do from day 1 was, in 
times of scarce resources, to try to get maximum benefit for 
every single tax dollar that citizens from your State and from 
around the country are investing. And by removing the subsidies 
to the private sector and originating the loans ourselves, we 
were able to increase Pell Grants over the next decade by over 
$40 billion, $40 billion without going back to taxpayers for a 
nickel. And we think that is absolutely the right investment. 
We think it is the right thing to do to help many more young 
people around the country have a chance to go to college, have 
access to Pell Grants and not subsidize banks. And so----
    Mrs. Lummis. Mr. Secretary, here is where I beg to differ, 
where it is going to cost taxpayers not only 1 nickel, but $225 
million additional dollars is the proposal in the budget. So 
how can you say that? Where am I missing something here?

       FEDERAL ADMINISTRATION OF DIRECT LOANS--PROJECTED SAVINGS

    Mr. Skelly. I think one issue is that you are in this 
committee dealing with discretionary appropriations, and there 
is an increase request for administrative costs of the student 
aid programs. But for that $225 million, over time you are 
going to save, according to CBO, you are going to save $67 
billion over time. So it is a small investment to make in the 
administrative costs, where we do get other services from 
private-sector contractors to perform all those duties for us, 
but they do it under a contract, not under a level specified in 
the law.
    Mrs. Lummis. But are you willing to admit that it is an 
increase to the taxpayers?
    Mr. Skelly. No, ma'am, it is a net big savings to the 
taxpayer to run the direct loan program, so it saves the 
Government billions and billions of dollars.
    Secretary Duncan. I would argue, at a time when we are all 
trying to become more efficient and more effective, if you had 
more examples of where we could save the taxpayers $67 billion 
for an investment of $227 million, I think that is a quite a 
good value proposition for taxpayers who are really hurting 
today.
    Mr. Rehberg. Ms. Lummis, I have been holding strictly to 
the 5-minute limit. I would be willing, after I call upon Ms. 
Lee, to yield my time to you.
    Mrs. Lummis. Thank you, Mr. Chairman.
    Ms. Lee. Thank you very much.

             COMPETITIVE PROGRAMS IN 2012 EDUCATION BUDGET

    Secretary Duncan, let me just go back to Congresswoman 
Roybal-Allard's point with regard to, maybe it is a perception 
that the Administration is overemphasizing competitive grants. 
You say 84 percent are formula-driven. But virtually, as I 
understand it, all of the Administration's proposed funding 
increases are funneled into competitive grant programs. Now 
there is a perception out there that that is the case. So I am 
not--but you say that that is not the case. So I would like for 
you to explain that in a bit more detail.

              COMMUNITY GROUPS PARTICIPATION IN EDUCATION

    Secondly, given the fact, and you didn't quite answer my 
previous question, so I want to ask you again, given the fact 
that there are no more earmarks, no more targeting Title I 
funds to those students with the greatest and schools with the 
greatest need and given this perception that all of the new 
funding now is geared toward competitive grants, are you 
looking internally at how you are going to help nonprofits and 
organizations that have been just totally--will be dismantled, 
which means our kids will lose out as a result of some of these 
policy decisions that you all have been making? I mean, are you 
sponsoring technical assistance for nonprofits in school 
districts that contract with or provide grants with nonprofits? 
I mean, just what are you all doing?

           PERCENTAGE OF FORMULA GRANT FUNDING IN 2012 BUDGET

    Also, explain this perception that your funding is going 
into competitive grants now, because that definitely is the 
perception. I was surprised to hear you say 84 percent is 
formula-driven.
    Secretary Duncan. We can give you this precisely. And we 
would be happy to share that with you, but just very clearly, 
for IDEA Grants to States, we are asking for a $200 million 
increase, that is formula based; and $50 million for the 
Infants and Families with Disabilities States Grant program. 
For ESEA Title I, a $300 million increase. So those are just a 
couple of concrete examples.
    [The information follows:]



    
               COMMUNITY GROUP PARTICIPATION IN EDUCATION

    But I will say again, whether it is the Investing in 
Innovation Fund, whether it is the Promise Neighborhoods 
initiative, those are all designed, or the after-school 
funding, they are all designed to encourage the participation 
of nonprofit social service agencies, faith-based institutions. 
We will continue to provide technical assistance to help them 
compete. It is a great point that you make to continue to try 
and let folks know what is available there.
    The Promise Neighborhoods applicants, they can't come in 
just as a school; they have to come in with a community, and 
they have to come in with a set of relationships. And so we are 
really trying to incentivize and encourage those folks who are 
involved in the community. Because I think school systems and 
schools can't do this work by themselves.

                IMPROVING THE GRANT APPLICATION PROCESS

    Ms. Lee. Well, I think it is more than letting nonprofits 
and those who have been sort of--will be put out of business, 
you know, more than just letting them know what is available. 
It is about the process, making the process a bit less 
cumbersome to apply for some of these grants and also providing 
a road map or some assistance as to how they are going to 
achieve that match again, because like I say, a $250,000, 
$300,000 investment in an after-school program leverages $1.5 
billion, $2 billion, so you have to not only tell them what is 
available, but you have to make the process a bit more friendly 
and also show them where they are going to pick up the rest of 
this money that they are going to lose as a result of your 
decision and this Administration's decision, no more earmarks.
    Secretary Duncan. And so, again, I hear the concerns, and 
we will continue to try and offer technical assistance to help 
streamline it. As you know, I have also had a number of 
conversations with the head of the Community Foundation in 
Oakland, who I think is doing a great job of bringing the 
district nonprofit partners, the corporate community to the 
table.
    I did a conference call with a number of funders who are 
interested in supporting the reform efforts that are going on 
in Oakland. And we will do everything we can to be a good 
partner and to bring entire communities behind this effort. And 
I think the work going on, particularly in Oakland, has great 
promise.
    Ms. Lee. Sure, Mr. Secretary. I am extremely concerned 
naturally about my district in Oakland. But I am also concerned 
about the entire country.
    And I do know, and I can speak very clearly about members 
of the Congressional Black Caucus, they share the same 
concerns. And so what you are doing in Oakland is great, and I 
really appreciate it, and we have a lot more to do. But I think 
somehow this needs to be institutionalized within your 
Department to help fill some of these huge gaps that are going 
to result now in some of these really badly needed educational 
efforts in many of our urban and rural communities.
    Secretary Duncan. Thank you.
    Mr. Rehberg. Thank you.
    Ms. Lummis, you get the last question.
    Mrs. Lummis. Thank you very much, Mr. Chairman.

        FEDERAL GOVERNMENT ADMINISTRATION OF DIRECT LOAN PROGRAM

    I would like to point out that the Education Department did 
maintain a year ago that their budget at the time could absorb 
the cost of this. And now we are being asked for 225 million 
more taxpayer dollars, 26 percent above the fiscal year 2011 
CR.
    I would also point out that, while I heard you talking 
about, in an exchange with Mr. Chairman, about the jobs that 
you feel were saved, the teacher jobs that were saved by coming 
in and doing that emergency appropriation that we did in 
August, you look at this program, I know personally dozens, 
dozens of people who lost their jobs in the private sector 
because of the student loan program being moved from the 
private sector to the public sector.
    And so it is hard for me to listen to an argument about how 
we had to come back here and spend all this money, of these 
taxpayers dollars, to save jobs in the public sector, while at 
the same time, we callously stole jobs from the private sector, 
so we could have a program that is run by Government that we 
now know is going to cost more than you told us a year ago it 
was going to cost. So I just find it disingenuous.
    It is as if public sector jobs are somehow more important, 
more valuable than private sector jobs. And I would argue, Mr. 
Chairman, that quite the opposite is true. That private sector 
jobs are paying for public sector jobs to exist through their 
tax dollars and that the tax dollars that are taken from the 
pockets of public employees are taken from 100 percent taxpayer 
dollars paid to that salaried person. So I do think the 
economic analysis that you have made is only looking at one 
component of what we are doing by transferring jobs from the 
private sector to the public sector. We are not in the long run 
doing this Nation a favor.
    And Mr. Chairman, I thank you for the opportunity to 
express that point of view.
    Mr. Rehberg. Thank you.
    Secretary Duncan. Can I express a counterpoint?
    Mr. Rehberg. You certainly may.

      SAVINGS GENERATED VERSUS COST OF ADMINISTERING DIRECT LOANS

    Secretary Duncan. So, again, we may agree to disagree, but 
we actually still have nonprofit companies in the private 
sector helping to service student loans. But, again, if we 
would ask any American out there, if we could save $67 billion 
and help millions of more young people go to college and get a 
good education, have that be affordable, is that the right 
investment to make? I think you would be hard pressed to find 
folks that think that that is a bad investment. If we could 
save $67 billion with an investment of $225 million, and 
because of that have a much, much better educated workforce 
going forward, and have many young people's families who are 
struggling financially have access to college, I think that is 
exactly the type of work that we should be doing.
    Mr. Rehberg. Mr. Duncan, I know you requested a hard finish 
at 12 o'clock, but Ms. DeLauro would like to ask an additional 
question. Would you grant her an additional 5 minutes?
    Secretary Duncan. Absolutely.
    Ms. DeLauro. Thank you very much, Mr. Secretary.
    Yes, I think, of the number of rounds we have had, I think 
I have asked only a couple of questions, so I am going to take 
some time.
    Just a couple of points. I would like to add that the big 
losers in moving to direct lending are the banks. And it would 
seem to me that the banks are doing pretty well. And you know 
what, we bailed them out to a ``fare thee well''; it is time we 
bailed out those folks who are trying to get the kids to 
school, who are having a very, very tough time to do it.

                       ECONOMIC RECOVERY PROGRAM

    I would also say that the economic recovery program was 
targeted. It was transparent. It was timely, and it was 
temporary, all of the points that the chairman spoke about. And 
so in fact, all States received the stabilization fund for 
their schools. And so there were dollars for Montana's schools, 
as well as $10 billion in Title I. And I have not been there 
recently, but others tell me, Mr. Chairman, that in Glacier 
National Park, there are a whole lot of signs that talk about 
the improvements they are doing that are a direct result of the 
economic recovery program.

             BENEFITS OF EARLY CHILDHOOD EDUCATION PROGRAMS

    Mr. Secretary, I have a question for you on early childhood 
education. I commend the increase in that effort and for the 
Early Learning Challenge Fund. I might add, I think this is 
important--I am not an expert in this and you may be more of 
one. But we have Dr. James Heckman, who is a Nobel prize 
winning economist who suggests that the non-academic education 
offered by high quality childhood education programs creates 
lifelong benefits. And we see that what happened in the 
Republican continuing resolution, was a cutback in Head Start 
funds of $1.1 billion. And that means that we have got 
youngsters, a couple hundred thousand youngsters who are never 
going to get the opportunity to get early education. Dr. 
Heckman also writes, ``For high quality early childhood 
interventions, there are none of the tradeoffs between equity 
and efficiency that plague most public policies. Early 
interventions produce broadly based benefits, reduce social and 
economic inequality. They promote productivity and economic 
efficiency.''

                     EARLY LEARNING CHALLENGE FUND

    Let me ask you, the passage of the President's Early 
Learning Challenge Fund, how would it improve quality in early 
childhood programs, including Head Start, child care? What 
benefits would the enactment of the challenge grants offer? How 
will implementation be coordinated between the Department of 
Education and the Department of Health and Human Services? 
Beyond the Challenge Fund, what other initiatives would you 
support to expand our attention to kids in their earliest 
years?
    Secretary Duncan. So we have had a fantastic working 
relationship with HHS. Secretary Kathleen Sebelius has been a 
wonderful partner. Her staff and my staff are joined at the 
hip. We actually have a joint committee working to gather 
information specifically around early childhood education. So 
this idea of silos or stovepipes with the Departments, I think 
hopefully we prove time and time again that we are 
collaborating in a significant way.
    Our goal is to do a couple of things: to dramatically 
increase access, particularly in disadvantaged communities, and 
to make sure it is high quality. So we would challenge 
communities, we would challenge States to step up to the plate 
with their high standards, whether working with children who 
need the most help, or the communities that have been the most 
underserved.
    Again, if we are serious about closing the achievement 
gaps, we have to stop playing catch up. We have to stop doing 
remedial work, and the best way to do that is to have our 
children enter kindergarten with their literacy and 
socialization skills intact. I worry desperately about those 
children who haven't been read to, who don't know the front of 
a book from the back of a book. That is the toughest of jobs 
for our best kindergarten teachers to work in that situation. 
So when our 2- and 3- and 4-year-olds can have high quality 
programs, we have to do that.
    I will just add one more statement that I am really 
concerned that in these tough budget times, many Governors are 
scaling back in early childhood programs. It is not just at the 
Federal level, and I challenged all those Governors last 
weekend to say that is the wrong cut to make. And you have to 
be creative at tough times, but to walk away from early 
childhood is cutting off your nose to spite your face.
    Ms. DeLauro. Thank you.

            SCHOOL IMPROVEMENT GRANTS FUNDS FOR HIGH SCHOOLS

    Let me try to ask a very quick question here, which has to 
do with the School Improvement Grants in high schools. It is my 
understanding that an in-depth analysis of the grants shows 
that only about 13 percent of the funding goes to high schools, 
those that are most in need, and that is where we look at the 
40 percent or more of students who don't reach their senior 
year.
    I am concerned that when we see the drop-off after the 
economic recovery program funds, that these schools that are in 
need, there is going to be less emphasis placed on high 
schools. I just want to ask you about how the Department is 
going to make sure that the high schools receive at least a 
proportional share of the SIG funds? And would you entertain 
the proposition that high schools should receive a share of 
each State's SIG allocation that is, if you will, equal to the 
percentage of high school students attending low-performing 
high schools in the State?
    Secretary Duncan. If we are not addressing the high school 
dropout factories, we are missing the boat. So we have to do 
that. I would just quickly add that so much of the creative 
work going on in New Haven, in your community, is 
extraordinarily exciting to me, and they are challenging the 
status quo in some pretty interesting ways, doing it with 
courage, working together and I think at lots of levels. The 
models we have seen there can help to inform the national 
conversation on this and other issues as well.
    Ms. DeLauro. I know we will see you again, Mr. Secretary, 
so I haven't had a chance, because I wanted to talk about the 
model for teacher retention that was effective in New Haven and 
how all pieces came together, but we will have another chance 
to talk about that and turn around models. Thank you very much.
    Ms. Lee. Mr. Chairman.
    Mr. Rehberg. As we discussed, I will ask that the members 
if they have additional questions, that they put them into the 
record and assume that they will be asked. And at this time, 
because of my time commitment as well, the hearing is 
adjourned.
    [The following questions were submitted to be answered for 
the record:]




                                            Friday, March 11, 2011.

DEPARTMENT OF HEALTH AND HUMAN SERVICES FISCAL YEAR 2012 BUDGET REQUEST

                                WITNESS

HON. KATHLEEN SEBELIUS, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN 
    SERVICES
    Mr. Rehberg. Welcome. Good morning. We will deal today with 
the budget of the Department of Health and Human Services, and 
we appreciate and look forward to the opportunity to hear from 
and question Secretary Sebelius.
    My committee and personal staff and I have reviewed this 
budget at some length, and as have the members of the committee 
and their staffs. At first glance the overall discretionary 
spending seems to be slightly reduced from fiscal year 2011, 
but on closer examination we see that this gives a false 
impression.
    First we see that several mandatory appropriations in 
Obamacare augment this discretionary request, resulting in 
greater spending levels. In addition, we see that funds from 
the so-called stimulus have been directed to many of these 
programs, significantly raising the level of funding, and the 
Department now apparently seeks to turn those temporary 
spending levels into permanent increases in the baseline levels 
of spending. This is what we feared.
    With the nearly $1,000,000,000,000 stimulus, we learned 
after the fact that the stimulus bill was full of dollars that 
did not stimulate, money that simply supported more and more 
government programs at higher and higher levels. Also, we see 
that in this budget, the Department has even requested money 
for new programs, or has only provided limited justification or 
explanation for its action in the requests.
    At times it seems that some people almost think of this as 
some sort of a game: Bump up the baseline through stimulus, add 
new programs, cut a few, then freeze at the higher levels. We 
all want a good health care system, and we all have one, but 
through the Obamacare legislation, we have $2,600,000,000,000 
in new spending, creating new entitlement programs, and our 
national debt is climbing at an alarming rate to dangerous 
levels with the continued $1,000,000,000,000-plus deficits.
    When are we going to realize that this is not a question of 
whether we can afford all that some want government to do? It 
is the reality that we cannot afford what government already 
does. Do we have to have another economic meltdown before we 
see that reality?
    Just by looking at the numbers and the trend, in using our 
common sense we can see that we are on a path to financial ruin 
if we don't stop borrowing and spending. And looking at this 
budget, I question whether the administration gets it. Why? I 
am not sure. It is staring us in the face. You don't have to be 
in business, be an accountant, an economist, a mathematician or 
a fortune teller to understand this. You don't have to be a 
pilot to know if the plane you are in is diving towards the 
ground with nobody trying to prevent a crash, you are in big 
trouble.
    We are at the point where we must make hard choices, so 
there is a heavy burden on the Department today to justify what 
it is asking for.
    Mr. Rehberg. Ms. DeLauro.
    Ms. DeLauro. Thank you very, very much, Mr. Chairman, and 
welcome, Madam Secretary. It is a pleasure to have you before 
the committee this morning, and we will have a wonderful 
opportunity to discuss the budget request.
    And let me just say to you how much I support your mission 
and the good work that you are doing at Health and Human 
Services. You know, HHS is our principal agency for protecting 
the health of all Americans and providing essential human 
services, and the work of the agency has always reflected our 
Nation's priorities and the highest moral obligation of our 
government--providing health care services, educating our 
children, advancing scientific research for the cures of 
tomorrow.
    I want to reflect on the budget and on health care where 
you seek to lower health care costs for American families. In 
that regard the budget request builds on the many cost-cutting 
reforms that we passed last year in the Affordable Care Act. I 
am glad to see that, unlike the majority's resolution, this 
budget continues to move us forward on health care. On the 
well-being of our children, your budget is really strong, and I 
want to thank you for that.
    As with Secretary Duncan's budget for the Department of 
Education, which we discussed yesterday, this request also 
emphasizes the vital importance of early learning and 
determining child outcomes, and unlike the majority's budget, 
it makes important investments in child care and in Head Start.
    I cannot stress the importance of Head Start enough. For 
more than 45 years, Head Start has provided comprehensive child 
development, literacy and family services to over 27 million 
preschoolers from low-income and working-poor families. Nearly 
1 million children and their families are served every year. It 
is unquestionably the most effective early childhood 
development program ever developed, and I am glad to see this 
continued critical investment.
    On the Administration on Aging, I appreciate that although 
you do not propose an overall increase, you have several good 
initiatives, including one on elder justice. This is in 
contrast to what we find in the majority's budget, which would 
cut the Administration on Aging and impact several nutrition 
programs, potentially eliminating up to 10 million new meals 
delivered to the homebound elderly.
    I am pleased that, unlike the budget put forward by the 
majority here in the House, this request invests in continued 
medical research at the National Institutes of Health, instead 
of a $1,600,000,000 cut. Every dollar invested in the NIH has 
more than a twofold return on investment, creating jobs, 
stimulating the local economy, by working to improve the health 
of Americans. And as a cancer survivor who has felt firsthand 
the power of this research--I am here because of the grace of 
God and by medical research--I know that this research has the 
power to save lives, and I can't thank you enough for the 
commitment to that future.
    Thanks to NIH research, the prognosis for a woman diagnosed 
with breast cancer has improved greatly over the past 25 years. 
The cure rate for childhood leukemia is now 80 percent. We have 
seen the approval of the cervical cancer vaccine. And though 
one in six men will be diagnosed with prostate cancer, the 
translation of research has improved the survival rate to just 
over 99 percent. The death rates from cardiovascular disease 
have dropped nearly 70 percent in the last 30 years, all of 
this due in large part to NIH research. Imagine, a 
$1,600,000,000 cut.
    So, as a whole there is much I agree with in this request. 
To take another example, I strongly support the move to 
decrease the stigma of mental health services by recognizing 
their value in community health centers and primary care. This 
is a move that is long overdue. Just last week the 
administration released a report that, among other alarming 
estimates, noted that not even one in three women experiencing 
depression has seen a mental health professional in the last 12 
months. There is a health center in my State of Connecticut 
that is leading the way in this kind of integration, and I hope 
to hear more about how it can help our constituents' health, 
their pocketbooks, and their quality of life.
    I do have some concerns about some of the cuts in the 
budget request, particularly with regard to the Low-Income 
Energy Home Assistance Program, which so many families in my 
area rely on, and on the Community Service Block Grant. I voted 
against a proposal by the majority to eliminate the Community 
Service Block Grant, but I also disagree with the 50 percent 
reduction that the President's budget proposes. I believe these 
cuts will have harmful consequences for American families, our 
workforce, and the economy.
    I am also concerned with the proposed elimination of the 
Children's Hospital Graduate Medical Education. This is a 
critical, modest investment we make as a Nation to ensure we 
are training the next generations of physicians that will take 
care of our children.
    I hope we will have an opportunity to discuss those issues 
today. We have much to talk about.
    With that in mind, thank you so much for being here this 
morning, and look forward to hearing your testimony.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Thank you.
    Mr. Rehberg. And we welcome you to this hearing.
    I thank you for the quick briefing on the tsunami and your 
responsibilities and response. If the committee has any 
questions, they can certainly ask you the same questions that I 
did, but I thank you for that, and at this time we will welcome 
your opening statement.
    Secretary Sebelius. Thank you, Mr. Chairman and Ranking 
Member DeLauro, and members of the subcommittee.
    It is good to be with you today. I briefly told the 
chairman that our medical evacuation team is standing by, 
working closely with FEMA, waiting for the call from Hawaii if 
needed. So we are mobilized and ready to go. And as I also 
indicated to the Chairman, we are waiting to see what the 
aftermath in Japan will be, but certainly our thoughts and 
prayers are with those folks and the people who are, like the 
Chairman's parents, waiting to see what happens in Hawaii.
    I also want to recognize the hospitality of the Chairman in 
this room with the quote from Hubert Humphrey. I work in the 
Hubert Humphrey Health and Human Services Building. And the 
quote from Dwight Eisenhower, as a Governor of Kansas, Dwight 
Eisenhower as the only Kansas President, I feel right at home. 
So thank you for having me here today.
    In the President's State of the Union Address, he outlined 
his vision for how the United States can win the future by out-
educating, out-building, and out-innovating the world so that 
we can give every family and business the chance to thrive. And 
our 2012 Budget is a blueprint for putting that vision into 
action. It makes investments for the future that will grow our 
economy and create jobs.
    But the Budget also recognizes that we can't build lasting 
prosperity on a mountain of debt. Years of deficits have put us 
in a position where we need to make some tough choices in order 
to invest for the future. We need to live within our means. So 
in developing this Budget, we looked closely at every program 
in our Department, cut waste, redesigned programs with a focus 
on results, and in some cases cut programs we wouldn't have cut 
in better fiscal times.
    So I look forward to answering your questions, but first I 
want to share some of the highlights.
    Our entire Budget for our Department is just under 
$80,000,000,000, and this committee oversees $72,000,000,000 of 
that. Now, over the last year, we have worked around the clock 
with our partners in Congress and States to deliver on the 
promise of the Affordable Care Act. Thanks to the law, children 
are no longer denied coverage because of their preexisting 
health conditions. Families have new protections with the 
Patient's Bill of Rights, and business owners are beginning to 
get some relief from soaring health costs. Seniors have lower-
cost access to prescription drugs and preventive care.
    We continue to build on this progress by supporting 
innovative new models of care that improve patient safety and 
quality, while reducing the burden of rising health costs on 
families, businesses, cities and States, and we make new 
investments in our health care workforce. And particularly, the 
Budget supports workforce diversity programs that help students 
from disadvantaged backgrounds achieve their dreams of becoming 
health professionals. And because we know these students are 
more likely to return home to practice in underserved areas, 
these investments also make sure that more Americans can see a 
doctor when they need one.
    When you add new investments in community health centers, 
this Budget makes quality, culturally competent, affordable 
care available to millions more Americans across the country. 
At the same time, the Budget includes additional proposals to 
strengthen Medicare and Medicaid by improving program 
integrity, promoting lower medicine costs and investing in the 
health-information technology.
    To make sure America continues to lead the world in 
innovation, our budget also increases funding for the National 
Institutes of Health. New frontiers of research like cell-based 
therapies and genomics have the promise to unlock 
transformative treatments and cures for diseases ranging from 
Alzheimer's to cancer to autism.
    Our Budget will allow the world's leading scientists to 
pursue these discoveries while keeping America at the forefront 
of biomedical research, and because we know there is nothing 
more important to our future than the healthy development of 
our children, our budget includes significant increases in 
funding for child care and Head Start. Science shows that 
success in school is significantly enhanced by high-quality, 
early learning opportunities. That makes these some of the 
wisest investments we can make as a Nation.
    But our Budget does more than provide additional resources. 
We also aim to raise the bar on quality by supporting key 
reforms to transform the Nation's child care system into one 
that fosters healthy development and gets children ready for 
school. We propose a new Early Learning Challenge Fund, a 
partnership with the Department of Education that promotes 
State innovation in early education. These initiatives, coupled 
with the quality efforts already under way in Head Start, are 
an important part of the education agenda that helps every 
American child reach his or her academic potential and make 
America more competitive.
    Our Budget also recognizes that at a time when so many 
Americans are making every dollar count, we need to do the 
same, and that is why we provide new support for President 
Obama's unprecedented push to stamp out waste, fraud and abuse 
in our health care system, an effort that far more than pays 
for itself, returning a record $4 billion to taxpayers in 2010 
alone.
    In addition, the Budget includes a robust package of 
administrative improvements for Medicare and Medicaid. These 
proposals enhance repayment scrutiny, expand auditing, increase 
penalties for improper action, strengthen CMS' ability to 
implement corrective action, and address state activities that 
increase Federal spending. Over 10 years they will deliver a 
minimum of $32 billion in savings.
    So across our Department we have made eliminating waste, 
fraud and abuse a top priority, but we know that is not enough. 
So for the past few months we have also gone through our budget 
program by program to find additional savings and opportunities 
where we can make our resources grow further. We have abolished 
a grant program which was duplicative of the health law that 
was passed last year. We have had CDC funding consolidated so 
that the funding for different diseases is now going in a 
comprehensive grant to States to give them more flexibility to 
address chronic disease more effectively.
    The President's 2012 Budget makes tough choices and smart, 
targeted investments today so we can have a stronger, healthier 
and more competitive America tomorrow. That is what it will 
take to win the future, and that is what we are determined to 
do.
    Thank you again, Mr. Chairman, for having me here today, 
and I look forward to answering your questions.
    Mr. Rehberg. Thank you, Secretary.
    [The information follows:]



                        COMMUNITY HEALTH CENTERS

    Mr. Rehberg. My apologies to ranking Member DeLauro. I 
didn't do it exactly correctly yesterday. I am still learning 
on the job, and so I understand I cannot defer to somebody else 
for the first question, I have to do it myself or defer to you, 
and that was a mistake. And then I thought we went back and 
forth between the Democrat and Republican side, and that is not 
necessarily true. So I have learned from my lessons yesterday, 
and hopefully we will run a better meeting today.
    So I get to ask the first question. I have brought a chart 
along. Some of us, myself included, are hearing from the 
community health centers of these devastating cuts that are 
occurring to the community health center, and I would like you 
to look at this chart and tell me if any of these numbers are 
incorrect. I don't believe they are, because they are actually 
your numbers. Do you see any discrepancy in the numbers?
    Secretary Sebelius. Mr. Chairman, I cannot accurately 
answer that question. I need to look at a budget number.
    Mr. Rehberg. Discretionary appropriations, the enacted was 
in fiscal 2010 $2 billion approximately.
    Secretary Sebelius. I know H.R. 1 cut it by $1 billion. I 
think that is an accurate number.
    Mr. Rehberg. Yes. And this number down here is the 
affordable health care, which is Obamacare in our minds, added 
$1 billion. Did you get that billion dollars in fiscal 2011, or 
will you get that billion dollars in fiscal 2011?
    Secretary Sebelius. Well, Mr. Chairman, as you know, you 
and others have voted to repeal the Affordable Care Act. That 
is the law of the land currently.
    Mr. Rehberg. The law of the land currently is you are going 
to get that billion dollars?
    Secretary Sebelius. That is correct.
    Mr. Rehberg. All right. So there is no cut in community 
health centers.
    Secretary Sebelius. Well, the will of the Congress is still 
remaining to be seen. H.R. 1 and the House vote would repeal 
that billion dollars. So the budget actually in H.R. 1 is 
$1,000,000,000 lower.
    Mr. Rehberg. You know as well as I do that we cannot take 
the mandatory funding. That would be legislating on an 
appropriations bill, and this subcommittee did not legislate. 
We did not take that billion-dollar mandatory away.
    Secretary Sebelius. If the Affordable Care Act is repealed, 
Mr. Chairman, that billion dollars would be repealed with it.
    Mr. Rehberg. But as of today, under current law, you are 
going to get the additional billion dollars, so there is no cut 
in community health centers; is that correct?
    Secretary Sebelius. We don't have a 2011 budget, so it is 
impossible for me to answer what is going on. H.R. 1 proposes 
to cut our funding by $1,000,000,000 below what our 2010 
funding would be. That cut is what is proposed. Whether that 
will end up being the 2011 budget, I can't tell you. We don't 
have a 2011 budget, as you know.
    Mr. Rehberg. So the question is, if H.R. 1 goes through as 
this chart shows, there will be no reduction in community 
health centers. If it goes through as the continuing resolution 
passed the House, there will be no reduction in community 
health centers.
    Secretary Sebelius. Mr. Chairman, the House has taken two 
actions: H.R. 1, which does cut community health centers; and a 
vote to repeal the Affordable Care Act, which funds community 
health centers by an additional billion dollars. So if you 
assume the Affordable Care Act stays in place, and H.R. 1 would 
leave that as a flat line, but H.R. 1 as a budget proposal cuts 
our 2010 allocation by $1,000,000,000 for community health 
centers.
    Mr. Rehberg. As the current law exists--I can only speak 
for the Appropriations Committee, not the authorization 
committee of the legislation--from an appropriations 
standpoint, if these numbers are true, is there a reduction in 
community health centers?
    Secretary Sebelius. Well, again, we do not have a budget, 
so I cannot answer that question.
    Mr. Rehberg. The answer is no. There is no cut. There is no 
reduction, because if you get $1,000,000,000 of mandatory 
funding from Obamacare, it replaces the billion dollars we took 
of discretionary. Otherwise, with no changes, you would have 
gotten $3,000,000,000 instead of $2,000,000,000.
    Secretary Sebelius. Well, Mr. Chairman, as you know, H.R. 1 
also prohibits our staff from implementing any features of the 
Affordable Care Act. So those dollars that are appropriated in 
the Affordable Care Act for community health centers, the 
grants that would have to be outlaid, the draw down of those 
funding would be prohibited by another feature of H.R. 1.
    Mr. Rehberg. Are you using mandatory funding for the 
implementation within the Department?
    Secretary Sebelius. Mr. Chairman, when the resources for 
the Affordable Care Act fall within an existing service, and 
this one is within our agency of HRSA, we do not have 
additional new staff to do that. We have the HRSA staff who 
would implement that. We read, and our lawyers read, the 
Affordable Care Act amendment as H.R. 1 to prohibit our staff, 
including ongoing staff, from implementing any features of the 
Affordable Care Act. We could not put out grants. We couldn't 
design a program. We couldn't put the money out. So, indeed, 
the billion dollar cut would take place because that money 
could not be appropriated.
    Mr. Rehberg. So you are suggesting at this time that all 
activity on the implementation of Obamacare has stopped within 
the Department?
    Secretary Sebelius. No, sir. H.R. 1 is not the law. I am 
suggesting that this committee has voted to not only defund 
$1,000,000,000 through repealing the Affordable Care Act, but 
you also through H.R. 1, have suggested that we can't implement 
any feature of the Affordable Care Act. So, even if the 
Affordable Care Act stays the law of the land, if indeed H.R. 1 
becomes part of the operating instructions for the 2011 budget, 
we cannot implement that billion dollars. We cannot put that 
money out into new health care centers around the country.
    Mr. Rehberg. Thank you. We will obviously talk further in 
the second round of questioning.
    Ms. DeLauro.
    Ms. DeLauro. Just to repeat this, in the Secretary's 
answer--the question, that is--you kind of can't have it both 
ways, all ways, whatever ways you want to have this--is that 
there is no budget for 2011, and with the continuing 
resolution, there was defunded the community health centers, no 
money for community health centers. That is 125 centers that 
are out there now, four in my State of Connecticut and, I 
think, Mr. Chairman, one in your State. And if I am not 
mistaken I think you may have been there, and I don't know 
that, for the opening of the health center. But if you can't 
get it there, and then you take the 2012 budget and you have 
several amendments over and over again--again, I said on the 
floor of the House that night it was like being in Groundhog 
Day, we couldn't find enough ways or the majority couldn't find 
enough ways to defund health care and community health 
services.
    So the money isn't there. If you say 2012, let us damn the 
torpedoes, full speed ahead, let us go with it. Then the health 
care centers would not have any money potentially between now 
and the end of this year, some of them may go out of business, 
but we pick them up for 2012 next March in doing that. But you 
can't have it both ways and say that the funding is there. The 
funding is not there for community health centers.
    And what would happen, I want to ask the Secretary, if we 
do--if the majority is successful in repealing affordable 
health care, and you couple that with the $1,300,000,000 cut 
made in H.R. 1, what happens, Madam Secretary? What happens to 
these centers?
    Secretary Sebelius. Well, Congresswoman, our staff has 
estimated that there are approximately 10 million medically 
underserved people, who would lack services if this cut were 
indeed to follow through. About 3 million of those folks are 
currently being served by health centers, and an additional 7 
million would be served with the Affordable Care Act 
investment. By comparison, the President's Budget would serve a 
total of about 23 million patients in 2011 and about 24 million 
patients in 2012, building the infrastructure of public health 
throughout this country in the most underserved areas.
    Ms. DeLauro. I also might add, and this is what the anomaly 
is for me, with respect, Mr. Chairman, this is a quote from you 
in 2007: Community health centers are the backbone of quality 
health care in rural States like Montana. Thanks to Montana's 
13 centers already in place, folks living in rural areas, on 
Indian reservations, and those without insurance have access to 
reliable health care.
    And that is not only a comment in 2007, there are comments 
in 2006, a couple of them, about health centers being critical 
to ensuring Montanans living in rural areas have top-flight 
health care options; Montanans rely on community health 
centers, and the centers rely on Congress to provide adequate 
funding.
    We understand what the relevance of the community health 
centers are all about, and by action in two directions, by 
calling for the repeal of the Affordable Care Act, using the 
appropriations process to defund portions of the Affordable 
Care Act like community health centers, and then cutting it 
back below the 2010 level, then we are eliminating community 
health centers, which is a major portion of our health care 
system. It is reliable. It is accessible. As the Secretary 
pointed out, it serves 20 million patients. It improves access, 
quality of care. It reduces health care costs. It reduces 
reliance on expensive alternatives like emergency room visits, 
detecting and treating conditions like high blood pressure and 
diabetes before they become severe problems.
    This is addressing the need for health care that we have in 
this Nation and cutting off millions of people. We have health 
care here. All of us who are sitting here have health care, the 
Federal Employees Health Benefit Program. The people who 
utilize these centers don't have what we have, and what we have 
gone down the road over the last few months would do is to end 
their ability to have health care and while we maintain our 
own.
    Mr. Rehberg. Mr. Flake.

                      DEMONSTRATION PROJECT WAIVER

    Mr. Flake. Thank you, Madam Secretary. Thank you for being 
here.
    A couple of questions with regard to Arizona and other 
States. As you know, States are in a world of hurt in terms of 
their own budgets and deficits, and most States, the largest 
single item not public education is health care, and Arizona is 
one of those States in trouble. Arizona has a pilot program 
going, or demonstration project, I should say, and you recently 
sent a letter to Arizona saying that Arizona could trim its 
rolls after that demonstration project runs out, I believe, 
this fall. So Arizona will be able to save some money in that 
regard.
    Since then, one Representative has suggested that that such 
a letter constitutes guidance from your Department and 
therefore would be subject to the comment period and other 
things which could delay implementation. How do you understand 
that? Does such a letter constitute guidance that would--that 
could perhaps be delayed by comment periods and whatnot?
    Secretary Sebelius. Well, Congressman, in the situation you 
are describing, Governor Brewer actually had discussed with our 
Department the opportunity to ask for a waiver of the 
demonstration project that was in effect, and she wanted to 
have the waiver effective as of October of 2011. What we did in 
our examination of the Arizona demonstration project was to 
remind Governor Brewer that actually the project expires in 
September, and that there is no mandatory obligation to renew a 
demonstration project. That has been the law of the land. So 
all we did in our letter back to the Governor was reiterate 
what the law is with regard to demonstration projects. So there 
was no need for a waiver with a program expiring. It isn't 
guidance. It is just a law.
    Mr. Flake. All right. So there is no comment period 
required or anything.
    Secretary Sebelius. Certainly not to my understanding, 
because we are not offering advice or giving any kind of 
demonstration waiver. It is just what the law says.

                               HEAD START

    Mr. Flake. Thank you. I appreciate that.
    Earlier in this hearing it was stated that Head Start, 
which is a very expensive program run by your Department, is 
unquestionably the most effective early childhood education 
program ever developed. That seems at conflict with some of the 
information that your own Department has put out. A recent 
study released by HHS says that a national survey of 400--I am 
sorry, 4,600 preschoolers randomly assigned to either Head 
Start or no program, a control group, were studied in 114 
different measures ranging from academic skills, socioeconomic 
development, health status. The study found no statistically 
relevant effects from Head Start after grade 1.
    What is your Department doing to rectify that? I don't see 
any cut in the spending recommended. I don't see any changes to 
the program. In fact, the Department of Education is now 
launching their own early childhood education program to the 
tune of about $350 million they are asking for this year. 
Should they be doing that? Why are they trying to build on a 
program; do they have little confidence in your program?
    Secretary Sebelius. Well, Congressman, the Head Start 
program, the study that you are referring to is a comprehensive 
study that was done in the 2004-2005 timeframe. It was recently 
published, but the snapshot is substantially older than the 
publication.
    Mr. Flake. What has changed with the program since then?
    Secretary Sebelius. That is what I was going to mention is 
that there was some concern about the long-lasting components 
of Head Start and, indeed, the quality measures that get 
children school ready and not just focus on child development.
    Program changes have been implemented over the last number 
of years up to and including this year. There is a 
determination that the lowest performing in terms of school 
readiness issues, 25 percent of the programs have to recompete. 
That has never been done before, so we are really trying to 
look very closely not only for safe places for children to be, 
but effective school-readiness strategies.
    For the first time ever, I think, the Department of 
Education and the Department of Health and Human Services are 
working very closely together. As you know, there are a wide 
variety of early education programs for children. Head Start 
and Early Head Start are specifically aimed at children who 
qualify because of the income level of their parents. They are 
not universal.
    Department of Education has always run early education 
programs, and we now have a very collaborative effort together 
looking at not only social and development skills, but also 
learning-readiness skills to make sure that wherever a parent 
chooses as the appropriate placement for his or her child out 
of the house, and most children under 5 are in placements out 
of the house, that they are getting more than sophisticated 
babysitting, that they are really getting school-readiness 
programs.
    Mr. Rehberg. Mrs. Lowey.

                                TITLE X

    Mrs. Lowey. Thank you, Mr. Chair.
    Thank you, Madam Secretary. I just want to associate myself 
with the comments of my ranking member and make a few more 
comments.
    The House-passed 7-month CR is, in my judgment, deeply 
flawed. It is a dangerous bill. It wouldn't create a single 
job. It would hurt Federal programs essential to economic 
growth and compromise our security. And it seems to me at a 
time when we should work in a bipartisan way to ensure the 
competitiveness of our workforce, what the Republicans are 
doing in this bill is slashing education and health services 
vital to our long-term economic success. If the Republicans had 
their way, there would be billions in cuts to medical and 
innovative research that would result in job loss; and ground-
breaking and lifesaving research; cut over $100,000,000 from 
New York institutions. And I can go on and on about these ill-
advised proposals in the bill, but I am concerned that I would 
be talking for weeks, let alone the remainder of my 5 minutes.
    So I just want to make it clear, if the Republicans really 
believed the name they gave to H.R. 2, the Repealing the Job-
Killing Health Care Law, then I would like to propose that they 
rename the CR the Laying Off Everyone from Teachers and 
Firefighters to Bert and Ernie Act. This would better reflect 
the real impact of this draconian legislation.
    Now, to get specific in the couple of minutes I have left, 
I think this is a deeply flawed bill. The House-passed 7-month 
continuing resolution, for many reasons it is flawed. I would 
like to focus on one. It eliminates all funding for Title X 
family planning, and despite the fact that every dollar that is 
spent on publicly supported family planning saves nearly $4 in 
Medicaid costs, if our goal is to cut spending, it is reckless 
to eliminate programs that save taxpayer dollars.
    As the House was debating this CR, the administration 
wisely proposed to increase Title X by $10,000,000, which would 
increase access to affordable basic care such as contraceptives 
and cancer screening.
    Now, would you agree that defunding Title X would 
jeopardize health care access for millions of poor and low-
income women and men who depend on it, and can you put into 
perspective the real costs of eliminating Title X to our health 
care system and families? How would they get basic affordable 
care?
    And I just want to put one other comment in perspective, 
because we have good health care here, and a lot of people are 
confused, and if they think there are parts of the health care 
bill that should be amended, so be it, let us amend it. But 
essentially we want to give everyone essentially what the 
Federal Employee Health Benefit Plan has.
    So I just wonder if you can put in perspective Title X.
    Secretary Sebelius. Well Congresswoman, last year Title X 
provided services to about 5 million Americans across the 
country, and as you say, they often are lower-income men and 
women accessing services from contraception and family planning 
services to cervical cancer screenings, tests for STDs, and HIV 
screening. It is estimated that about one million unintended 
pregnancies were avoided thanks to the access to affordable 
contraception, and I think that for 40 years Title X has been 
proven to be an effective health strategy for millions of 
Americans across the country.

                               HEAD START

    Mrs. Lowey. Thank you very much.
    What do I have, 1 minute left?
    I just want to say I feel very blessed. I have eight 
grandchildren. I have a 4-year-old, and I know how her brothers 
and her grandmother and everyone dotes on her. And Head Start 
to me--and I have visited so many of them. If Head Start can be 
improved, let us improve it, but you don't provide the services 
to those kids by eliminating it. So I just want to say to my 
good friend, I would be happy to work with you to see what we 
can do to improve the program.
    I don't know if you have ever had a 4-year-old, but a 4-
year-old needs some--you have five. That is right. I should 
know my good friend has five. But I am on the grandkids stage. 
I want to tell you this 4-year-old is bilingual. Everyone is 
teaching, reading to her, and kids who don't have that 
opportunity have to get that support. And so I would like to 
work with you to improve the program if, in fact, it is not 
meeting the standards we think it should.
    Thank you, Mr. Chairman.
    Mr. Rehberg. You bet.
    Secretary Sebelius. Well, Congresswoman, if I can follow up 
on that for just a moment. The impact study did show that there 
are significant improvements in a variety of cognitive skills 
and parenting skills. As you know, Head Start has an important 
parenting component in areas that may expire.
    Mr. Rehberg. We will have an opportunity on the second 
round. Thank you.
    Mr. Alexander.

                              ACA WAIVERS

    Mr. Alexander. Thank you, Mr. Chairman.
    Madam Secretary, good morning.
    Secretary Sebelius. Good morning.
    Mr. Alexander. Out of a little over 1,000 waivers that have 
been granted to the Affordable Care Act, can you give us the 
most compelling reason that was presented to you that led to 
those waivers?
    Secretary Sebelius. Certainly, Congressman. The waivers 
that you are, I think, referring to, and I think there are 
1,040 as of the time of this hearing, deal with one provision 
of the Affordable Care Act, and that is the provision that 
indicates that annual benefit limits should be up to $750,000 
and gradually disappear altogether to make sure that people 
don't run out of coverage at the time that they need it the 
most, when they get sick.
    What became clear as we began to hear from business owners 
is that a wide variety of the so-called mini-med plans in place 
have some benefits, but fairly limited benefits. And since the 
law gave me the opportunity to have some discretion with regard 
to what would be serious rate shock for people, and since there 
is no viable alternative yet--before 2014, there won't be a 
State-based exchange available to offer competitive coverage to 
those same business owners--we determined that granting waivers 
and allowing those--while limited benefits, they are better 
than no benefits--to stay in place for at least the first year 
so we can gather data, take a look at what really is in the 
marketplace, and then have a further conversation was far 
better for those beneficiaries than denying the waivers and 
having that coverage cancelled.
    So we have, I think--I can't give you the exact average. We 
would be happy to present a list. I think it is over 98 percent 
of the people who actually came forward with a waiver request 
have been granted them and is everybody from self-insured plans 
to a variety of small business owners and large corporations, 
small corporations. It represents at this point less than 2 
percent of the insured marketplace, but that limited coverage, 
at least this year while we are gathering data, will stay in 
place.
    [The information follows:]

                             Waiver Request

    As of February 19, 2011, 1,040 waiver applications were approved. 
Applications for waivers from annual limit requirements are reviewed on 
a case by case basis by Department officials who look at a series of 
factors including whether or not a premium increase is larger or if a 
significant number of enrollees would lose access to their current plan 
because the coverage would not be offered in the absence of a waiver. 
More detailed information on specific criteria can be found at: http://
cciio.cms.gov/resources/files/11-
905_2010annual_limits_waiver_bulletin.pdf.
    HHS periodically posts the list of the plans that have been granted 
waivers to ensure the public is aware of the waiver process and 
stakeholders understand how they are affected. Approved applicants are 
granted an annual limit waiver for one year. A list of annual limit 
waivers that have been granted can be found at the following links:
    Self-insured employers: http://cciio.cms.gov/resources/files/
alw_employer_04012011.pdf
    Health Reimbursement Arrangements: http://cciio.cms.gov/resources/
files/alw_hra_04012011.pdf
    Multi-Employer Plans: http://cciio.cms.gov/resources/files/
alw_multiemployer_04012011.pdf
    Non-Taft Hartley Union Plans: http://cciio.cms.gov/resources/files/
alw_non_taft_hartley_union_04012011.pdf
    Health Insurance Issuers: http://cciio.cms.gov/resources/files/
alw_issuer_04012011.pdf
    State-Mandated Policies: http://cciio.cms.gov/resources/files/
alw_state_04012011.pdf
    Association Plans: http://cciio.cms.gov/resources/files/
alw_association_04012011.pdf

    Mr. Alexander. You used the term ``rate shock,'' so we are 
to assume some of those arguments were they couldn't afford the 
new health care bill?
    Secretary Sebelius. It was that the benefits limits are so 
vastly below what is contemplated by a comprehensive insurance 
policy--what is in place is not necessarily an insurance 
policy. It is basically some kind of minimum coverage that to 
get from where they are to $750,000 in a period of months would 
not be affordable. So that was the provision that Congress 
wrote into the Affordable Care Act in this instance--and again, 
the waiver applies to just that one situation: Does your plan 
reach the $750,000 maximum limit this year? That is the only 
area where that language applies.
    Mr. Alexander. So there were no waivers, to your knowledge, 
granted just because one argued they couldn't afford it?
    Secretary Sebelius. No, sir. It is really to deal with what 
their limit is now, where they are compared to--and again, what 
we found--and, Congressman, I am a former insurance 
commissioner and have looked at this data very carefully. There 
is very little data on these mini-med plans. Many of them are 
not even required to be filed. So we are gathering data right 
now so we have a more comprehensive view. But it is a small 
slice of the insurance marketplace, but it is coverage that 
those folks have.
    Mr. Alexander. Thank you.
    Secretary Sebelius. Thank you.
    Mr. Rehberg. Louise Roybal-Allard.

                           CDDC CONSOLIDATION

    Ms. Roybal-Allard. Thank you, Mr. Chairman, and welcome, 
Madam Secretary.
    Let me just begin by associating myself with the comments 
that were made by my colleagues Rosa DeLauro and Congresswoman 
Nita Lowey, and I think they have pretty much highlighted the 
key issues.
    I would just like to add a bit about the community clinics. 
If they are to be closed as a result of some of the policies by 
my Republican colleagues, it would absolutely be devastating 
not only to my district, but to communities throughout the 
country, minority communities and poor communities. And 
community clinics really play a very key role in helping to 
address many of the health disparities that exist in our 
country, so it would absolutely be devastating, as was stated 
before.
    Madam Secretary, let me begin by commending you for your 
efforts to balance financial decisions with bringing focus to 
some of our most pressing health issues. But I do have some 
concerns regarding parts of your plan which impact prevention 
efforts at the State and the local level.
    The CDC budget proposes a far-reaching or more reaching 
consolidation of birth defects and chronic disease centers than 
had been agreed upon by the House and the Senate last fall. 
Under that agreement a consolidation involved programs that 
impacted obesity. Your proposal goes beyond obesity and related 
programs, while at the same time decreasing the CDC budget by 
$588 million. So States and the constituents of CDC--the 
constituents CDC serves are concerned because the proposal 
collapses budget lines, which can result in States' inability 
to address their State-specific needs.
    So in order to assure specific needs are met with fairness 
in the distribution of funds among States, will your proposal 
direct funding to be disbursed by formula, and will CDC's 
resources be allocated in a way that reflects input from the 
public health community? And finally, how will this committee 
and Congress be able to track how moneys are being used for a 
particular issue of interest?
    Secretary Sebelius. Well, Congresswoman, I know there is 
some concern about the lack of specificity to disease groups. I 
think it is the view of Dr. Frieden at the CDC, and, frankly, 
based on conversations with a number of public health officials 
across the country, that since so many of the chronic disease 
conditions have these similar underlying causes, rather than 
having siloed funds, we really feel that this is a better 
approach to attacking chronic disease overall.
    I met yesterday, just yesterday, with the leadership of the 
State public health associations, who are working very closely 
with CDC, and, in fact, the senior leadership of CDC was there. 
But we look forward to working with Congress as this budget 
proposal moves forward. Money is anticipated being allocated in 
part through a formula so every State would have resources, and 
in part through competitive grants, but it is aimed at the 
notion that many of the chronic disease conditions have similar 
underlying causes, and that if States can actually direct these 
resources in a flexible fashion to their problem that is 
presenting in that particular State, this is a more effective 
source of the prevention efforts under way.
    Ms. Roybal-Allard. You do understand the concern.
    Secretary Sebelius. I do.
    Ms. Roybal-Allard. Some diseases might be ignored. Also, as 
part of this consolidation, the budget also eliminates the 
REACH program, which for years has served as the cornerstone 
for CDC's efforts to eliminate racial and ethnic disparities in 
health.
    So how does CDC intend to address racial and ethnic 
disparities without the very successful and popular program 
which has played a critical role, for example, in my district 
and so many other communities of color?
    Secretary Sebelius. Well, I think again, Congresswoman, the 
Community Transformation Grants, I think, pick up the features 
of the REACH program and, in fact, expand their scope. So it 
isn't an effort to decrease the focus on health disparities or 
decrease the focus on health gaps, but really an effort to more 
strategically target these resources. So that is incorporated 
into the proposal in the 2012 budget for the Community 
Transformation Grants.
    Ms. Roybal-Allard. You are going to have look at that very, 
very closely.
    Secretary Sebelius. We look forward to working with you and 
your office. I know this is a great concern of yours, you have 
provided a lot of leadership over the years, and we would look 
forward to that.
    Mr. Rehberg. Ms. Granger.

                         FDA REVIEW OF AVASTIN

    Ms. Granger. Thank you.
    I am concerned about the recent decision that the FDA made 
to restrict its label for Avastin for metastatic breast cancer, 
and I think your home State of Kansas required private 
insurance companies to cover off-label uses of cancer drugs. It 
is my understanding I think you served as the commissioner of 
insurance as well as Governor during that timeframe.
    My question to you is, did you see cancer patients whose 
lives were saved because they had access to off-label drugs 
covered by private insurance? And I know that I haven't--I have 
heard from and talked personally to women in my district that 
they gave amazing stories of what had happened with their--
literally their prognosis of their life span, and that they 
were still here because of drugs like that.
    If Kansans with private insurance coverage can get Avastin 
for that type of cancer before they turn 65, shouldn't Medicare 
continue to guarantee that same coverage for our seniors?
    Secretary Sebelius. Well, Congresswoman, as you know, the 
Avastin decision is still in the process of now receiving 
comments. The final decision has not been made yet. The data 
that was presented by the scientists and the vote of the 
scientific committee was pretty overwhelming in terms of the 
addition of Avastin to the cancer studies was done on an 
accelerated basis. So breast cancer was an added cancer that 
Avastin was designed to address, and the information back about 
that result of that protocol have not been encouraging. In 
fact, overwhelmingly the scientists felt that there was more 
harm than good. Now, that doesn't mean that individual cases 
don't have information about this being the kind of last 
chance, and it extended, but there is no very compelling data 
about not only not life extension, but some serious harm as a 
result of Avastin being used with metastatic breast cancer 
patients.
    But that process is under way. Our decisions at the FDA are 
really guided by the scientific community. I think the vote was 
11 to 1, and that was the recommendation that is out. But the 
input is coming in, and it is always, I think a very, very 
difficult balance of how you make a decision based on, but I 
can assure you that the scientists are looking at harm versus 
benefit, and what at least they found in these accelerated 
studies is that more harm was caused than benefit given.
    Ms. Granger. I say again, I talked to women in my district, 
but I also talked to oncologists, because I said, you know, I 
am hearing about this, but I want to confirm it with my 
personal conversations, and that was certainly not the result I 
heard from any of them.
    Secretary Sebelius. I would be glad to again follow up with 
your office, give you the information, and, as you know, no 
decision has been made about Medicare benefits. This process is 
still under way. So I want to clarify the fact that no 
beneficiary is now without Avastin at this point, and what will 
happen at the end of the day--but I would love to share the 
research, because it is heartbreaking, and I think we are 
looking for any lifesaving opportunity that exists.

                 CHILDREN'S GRADUATE MEDICAL EDUCATION

    Ms. Granger. And if I have still time--I don't know where 
the timer is. Okay, I have got time.
    The other question I had had to do with your budget and 
eliminating funding for the Children's Hospital Graduate 
Medical Education program. I am confirming that your budget 
does eliminate that. And it has just been a wonderful source 
for training funds for pediatricians and pediatrics, especially 
doctors that work in the Children's Hospitals. And success 
stories, if they are anywhere in health care, it is certainly 
in the Children's Hospitals. So I am concerned about that and 
would like you to address that about the long-term negative 
impact on that training.
    Secretary Sebelius. Well, again, Congresswoman, I think 
that is one of the toughest budget cuts that we made in this 
2012 proposal. The GME funding, the Graduate Medical Education 
funding, that goes to Children's Hospitals is somewhat 
different than the vast majority of GME funding in that it does 
not have to be used for training. It is kind of general funding 
that adds to the Children's Hospitals who are not eligible for 
Medicare GME. There are some other avenues for training 
pediatricians, both incentives for primary care docs and 
incentives that are in--there is some GME funding in the 
Medicaid program.
    But I share your concerns that having additional 
pediatricians and certainly the success of Children's Hospitals 
has been pretty substantial, and in a better budget time we 
would have never recommended that this be one of the budget 
proposals.
    Ms. Granger. I understand certainly. Thank you.
    Mr. Rehberg. Ms. Lee.

                           HEALTH DISPARITIES

    Ms. Lee. Thank you very much, Mr. Chairman.
    Good morning. It is really a pleasure to see you again, 
Madam Secretary. I know you have a full plate moving forward as 
we implement the historic health reform law, but I am glad you 
are in charge of that effort because I know it is going to get 
done right.
    A couple of things I want to ask you, which I am asking all 
of our Cabinet members, is the impact of eliminating earmarks 
and what your agency is doing to help compensate for that. For 
example, many communities, I mean of color especially, low-
income communities, we ensure that they receive enough money to 
begin to fill the void where health services are needed. These 
community groups provide jobs and services to constituents that 
never would get these services or jobs. Also, earmarks allowed 
nonprofits to leverage millions of dollars to bring in money to 
ensure that these voids are filled.
    Now with the elimination, I am very concerned about what is 
taking place in terms of the economic impact in communities and 
wonder if you have made any kind of analysis in terms of the 
impacts of the lack of now and the void that the lack of 
earmarks will create in low-income and minority communities, 
and do you have the capacity to make this analysis? That is my 
first question.
    Secondly, just want to--I chair now the Congressional Asian 
Pacific American Caucus' Health Task Force, and so we are 
working with Mr. Honda, former Member of the subcommittee, and 
my colleagues in the Congressional Black, Hispanic and Asian 
Pacific American Caucus to put together oversight 
responsibilities for our caucuses to look at the implementation 
of the health disparities provision of the bill. And so I 
wanted to find out what initiatives that you are undertaking to 
make sure that this is implemented appropriately and, you know, 
how this issue is being addressed within your Department.
    And then as it relates to HIV/AIDS, I am very pleased that 
you are following up to implement the President's National AIDS 
Strategy, and wanted to ask you a little bit more about that, 
and do you intend to provide an additional transfer of funds 
during the current fiscal year as we work through the budget?
    Secretary Sebelius. Well, Congresswoman, let me start with 
the Asian American and Pacific Islander Caucus. We actually 
have gathered a sort of advisory group together of providers 
and organizational leaders, and I had the opportunity to meet 
with them recently to make sure our attention across agencies 
on health disparities are particularly applicable to this 
community where often the disparities are significantly wider. 
So we are paying very close attention.
    My Assistant Secretary of Health is leading that group, and 
I would look forward to having Dr. Koh brief you about that 
activity. We are going to have a major report released on 
health disparities and action plan this spring, and we really 
want input from the API group as we move along.
    In terms of the earmarks, what we have done, I would say, 
in our budget is to continue to make sure that as we leverage 
assets, we are looking very closely at where the most 
underserved areas are and where the biggest gaps are. So 
everything from the earlier conversation that we had about 
community health centers, making sure that we have the accurate 
mapping to where those providers are, but also, as you know, 
the Affordable Care Act has a number of streams of money for 
workforce training, and particularly for minority recruitment 
and workforce training, because I think having culturally 
competent, culturally sensitive providers often is a key to 
delivering health care; not just having a person there, but 
having a person who relates to the community.
    So we are paying close attention to that, and I think in 
every agency from NIH through HRSA, and including all of our 
CMS with Medicare and Medicaid, we are trying to make sure the 
health-disparity issue is front and center. I think there is 
more focus and attention on that than there has ever been in 
our Department. I would say we have done a pretty good job of 
writing reports in the past, not a very good job of closing the 
gap.
    But as you know, the Affordable Care Act, which anticipates 
having affordable health coverage available for all Americans, 
is probably going to be the most significant step in 2014 than 
has ever been taken to close that health-disparity gap.

            TECHNICAL ASSISTANCE FOR UNDERSERVED COMMUNITIES

    Ms. Lee. And, Madam Secretary, the other thing, just let me 
ask you on the organizations that really serve low-income and 
minority communities, now that they don't have earmarks, are 
you providing technical assistance or any kind of opportunities 
for them to understand how to and get involved in the Federal 
grant opportunities to help build capacity? Because there are 
many, many gaps now and holes that they are going to--that are 
out there and jobs that are being lost as a result of this.
    Secretary Sebelius. We are eager to do that and have made, 
as I said, specific outreach through the Asian American and 
Pacific Islanders. I have met with the leadership of the 
African American health community on everything from research 
projects to leveraging assets. We have regular tribal 
consultations about what is happening or not happening on 
Indian tribes, and are providing outreach particularly to the 
lowest-income tribes, who often don't have the assets to access 
grants.
    So we are trying to make sure we are paying close attention 
to the communities who have the greatest needs, who, you know, 
often don't have the resources to be applying for grants and 
aren't necessarily competitive. So that technical assistance is 
very much a part of what we are doing through our regional 
office network around the country.
    Mr. Rehberg. I will point out to the committee we are 
getting somewhat conflicting reports on when our vote is. One 
notification is 11 o'clock. Another one was somewhere between 
11:45 and 12:15. So we will go as long as we possibly can. We 
are almost done with our first round.
    Mr. Lewis.

                          HHS STAFF INCREASES

    Mr. Lewis. Thank you, Mr. Chairman.
    Madam Secretary, thank you for being with us.
    Secretary Sebelius. Sure.
    Mr. Lewis. In ancient times I had the chance to chair the 
committee for a short period. I got to know Dr. Zerhouni of NIH 
quite well. We discussed a lot about the fact that there is 
never enough money to go around.
    What was NIH doing to evaluate those people who are 
contractors with them and otherwise doing great jobs versus 
those who maybe don't produce a lot? How do you eliminate 
people from the queue? It was a question they really hadn't 
ever considered before, and that led to some very interesting 
discussions and is the foundation for my own discussion with 
you about our budget.
    Your budget includes what I understand to be a 315 percent 
increase in the Public Affairs Office, from some $4,800,000 to 
$19,200,000, growing the Office of Personnel from 24 to 46. 
Now, a cynic might suggest that increase in the Public Affairs 
Office might very well be designed for helping to put in place 
a public relations program regarding the Affordable Care Act. I 
am sure you wouldn't describe it that way, but I would like to 
know what you think about these increases and what you intend 
to do with them.
    Secretary Sebelius. Well, Mr. Chairman, we think that 
certainly outreach to the public is important, and one of the 
things that is happening under the umbrella of the public 
affairs shop is the design and development of new Web tools to 
make it apparent to citizens across this country what is 
available to them, how to access it, how to get that 
information out. So that we now have a great Web site, I don't 
know if you have had a chance to visit it, healthcare.gov, 
which for the first time ever pulls together for people to see 
in an easy one-stop shop what is available to them in the 
private market with prices, with a percentage of how many 
people are eligible or not eligible; also what public programs 
are available, kind of a one-stop shop; as well as a timeline 
for implementation of health changes. And I would say that is a 
significant new feature of the Public Affairs Office as well as 
getting information out to seniors and others about what 
benefits are currently available, what kinds of opportunities 
there are, grant opportunities, moving along.
    Mr. Lewis. The budget presented contemplates adding some 
4,700 new employees, including more than about 1,000 full-time 
positions, in the Medi-Cal/Medicaid arena. Can you tell me--
tell us how many of the proposed positions are for implementing 
the new health care law, and how do you expect to sustain that 
budget over time? The budget could very well find a cliff out 
there, and to hire people for a year, that is one thing; if you 
are hiring them for 10, that is another, especially if there is 
going to be a cliff.
    Secretary Sebelius. We currently, in terms of implementing 
the Affordable Care Act, have about 670 people who have been 
specifically added to focus on some of the new areas which 
weren't part of the Department's responsibility before and are 
paid for out of the Affordable Care Act implementation. 
Another, I think, about 350, Mr. Chairman, are working on 
various aspects of the act. So a total of about 1,000 people.
    And just to put that that into perspective, in your home 
State of California, the insurance department has almost one-
and-a-half times those people just in the State insurance 
department. So our 1,000 employees would, by comparison, be 
smaller than the largest States' insurances departments.

                           UNOBLIGATED FUNDS

    Mr. Lewis. The stimulus bill--speaking of that cliff I am 
concerned about--the stimulus bill of 2009 funded 
$21,920,000,000 for HHS programs. Can you give the committee 
information regarding--well, at least an update on the 
remaining unobligated funds that are involved in that reserve 
and what remains unobligated as we try to ourselves evaluate 
where we cut, squeeze and trim maybe, and maybe not cut, 
squeeze and trim?
    Secretary Sebelius. Mr. Chairman, we have obligated about 
$118,000,000,000 of the $138,000,000,000 that was part of the 
HHS program funds. About 72 percent has been outlaid, and the 
obligation includes almost nearly 100 percent of our 
discretionary program funds. I would say the remaining funds 
are the Medicaid and Medicare health incentive payments, which 
are for health IT, that is about $20,000,000,000 in that 
category; the third year of a number of the grants that NIH has 
funded; and some ongoing construction funds which are not yet 
fully completed.
    Mr. Rehberg. Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman.
    I have a number of questions that I want to ask, and most 
of which, I think, I am probably going to save for the historic 
record and ask in a second round.
    So I am going to use most of my 5 minutes to just rehash a 
little history. Let me first begin by saying today I turn 46.
    Secretary Sebelius. Happy birthday. You are such a baby. I 
am sorry, Congressman.
    Mr. Jackson. That is fine, Madam Secretary.
    Secretary Sebelius. I mean, wow.
    Mr. Jackson. I am such a baby when I look at my guys on the 
other side. And at this very hour my younger brother and his 
wife are expecting their son, and my brother called me 
yesterday and told me how disappointed he was that his son is 
likely to be born on my birthday.
    My daughter's eleventh birthday is Sunday, and she has all 
of her girlfriends coming over. So I was late for the hearing 
this morning because I had to go buy cupcakes and attend 
parent-teacher conferences and things like that, things that 
took priority. My mother's birthday is Thursday.
    Secretary Sebelius. Wow.
    Mr. Jackson. So this is an exciting week for me, and that 
history is very important to me because when I got on this 
committee in 1999, a very conservative chairman of the 
committee, Chairman Porter, wouldn't let me advance an earmark 
or advance funding increases for any programs that I believed 
in unless it was based in good science. That is all Chairman 
Porter on this committee would do, and that was fund good 
science. And so I asked him to allow me to put report language 
in an appropriations bill so that I could adequately determine 
good science so that I might be able to fight for the programs 
that I believe in based on good science, not based on just 
budget priorities and budget commitments.
    And I can say that I have been on this committee long 
enough to know that almost no one on the other side of the 
aisle was on this committee when I was first appointed to this 
committee. Mr. Flake wasn't on the committee. Chairwoman 
Granger was not on the committee. My colleague was not on the 
committee. Mr. Rehberg, in fact, the chairman of this 
committee, wasn't on the committee. He has the power, they have 
the numbers, but oftentimes with the power and the numbers 
doesn't necessarily come good science.
    And so Mr. Porter had me put language into a bill that 
produced this report, ``Unequal Treatment, the National 
Academies Press'' and includes all medical doctors, literally 
hundreds of them, who determined what is necessary in order to 
close profound gaps in our health care system for all Americans 
at your Department and at the NIH. It includes community health 
centers, it includes health professions based upon the 
available infrastructure to help close profound gaps that exist 
in our system; and based upon the results of this report, this 
committee has set out a path for addressing many of the funding 
priorities that have been laid out.
    And as I understand it--and I apologize for not being here 
on time for all the reasons that I have stated--many of the 
programs that I support and profoundly believe in as a result 
of this good science which has been systematically proven--
approached structurally over the course of multiple 
appropriations bills, are under attack, and they are under 
attack without good science. They are under attack for 
political reasons. They are under attack for budget deficit 
reasons, and debt reduction reasons, and across-the-board cut 
reasons. But they are not based on good science, and the 
absence of that good science profoundly impacts and affects 
real people. Real people, profoundly affected by the strategic 
approach that we have undertaken on this committee to try and 
address these priorities.
    So I didn't plan on coming down here today to kick a little 
tail, but I understand that a lot of the programs that I 
believe in have, quite frankly, been getting kicked around, and 
so let me, you know, be an equal opportunity kicker.
    Let me first begin with the administration by expressing my 
disappointment in the collapse of the negotiations over the 10-
year tax cut deal; that when State Senator Barack Obama was in 
the State senate and subsequently came to the U.S. Senate and 
then to the Presidency of the United States, we entered into in 
this Congress with the expectation in December that nearly 
$858,000,000,000 would be available to sustain these programs. 
The partisanship that you see on this committee and the 
partisanship that you see in trying to challenge some of these 
programs that are worthwhile and solidly proven programs, we 
were counting on that $858,000,000,000 to be here for the 
community health centers, to be here for health professions, to 
help close profound gaps not only in this committee, but in 
committees across this Congress. And I am determined to not let 
anyone in this Congress forget that the negotiations, which did 
not include members of this committee, were terrible 
negotiations on the part of the administration that profoundly 
impacted the budget that you are presenting to this committee.
    I realize that my time, Mr. Chairman, has expired.
    And the ramifications of that, as I close, have 
implications for everything that we fundamentally believe in, 
and there are ramifications for this Congress and beyond.
    And I will save my questions, Mr. Chairman, for the second 
round.

                        COMMUNITY HEALTH CENTERS

    Mr. Rehberg. Thank you, Mr. Jackson.
    And I thank Ranking Member DeLauro for giving my comments 
from prior Congresses about my support for community health 
centers, because I do support community health centers. I have 
always voted for them, and I will continue to support them, and 
I will do anything I possibly can to see that they are fully 
funded to the best of my ability.
    So my question is if, at the end of the day--forget what is 
happening around us. If, at the end of the day, I am successful 
in this subcommittee of getting through the United States 
Congress and signed by the President from appropriated dollars 
and Obamacare dollars $2,176,000,000, are you committed to 
providing grants to the 127 community health centers that were 
either expanded or opened as a result of stimulus dollars?
    Secretary Sebelius. I am sorry, Mr. Chairman, I don't--you 
are asking----
    Mr. Rehberg. I am asking you if we fully fund----
    Secretary Sebelius. The Affordable Care Act?
    Mr. Rehberg. If we fully fund community health centers----
    Secretary Sebelius. Right.
    Mr. Rehberg [continuing]. The $2,176,000,000 total for the 
community health centers from the Congress, will you provide 
grants to the 127 centers that were either expanded or opened 
as a result of using stimulus grants to your grant?
    Secretary Sebelius. Mr. Chairman, I can't answer that 
question. Some of those facilities are already funded; some are 
not. I don't----
    Mr. Rehberg. But that is fully funding.
    Secretary Sebelius. Mr. Chairman, I would be happy to 
answer in writing. I don't want to give an incorrect answer. I 
don't really even know what you are asking.
    Mr. Rehberg. I think you do. I think you do. And the 
question is----
    Secretary Sebelius. Mr. Chairman, I am trying to be 
responsive. I don't know what your question is.
    Mr. Rehberg. In 2008, community health centers from the 
Federal Government received a little over $2,000,000,000 in 
fiscal 2008.
    Secretary Sebelius. I wasn't here.
    Mr. Rehberg. In fiscal 2009, a little over $2,000,000,000; 
in fiscal 2010, a little over $2,000,000,000. If in fiscal 2011 
we are successful in carrying through fully funding a little 
over $2,000,000,000, the question becomes are you going to be 
willing then to provide grants to the 127 centers that opened 
as a result of the stimulus dollar grants that you gave?
    Secretary Sebelius. Mr. Chairman, I think that if you are 
asking will we provide the services out of $1,000,000,000 fewer 
resources, we will have to pick and choose.
    Mr. Rehberg. You are not going to have $1,000,000,000 fewer 
resources.
    Mr. Jackson. Would the chairman yield, because I am lacking 
clarity on your question as well.
    Mr. Rehberg. Sure.
    Mr. Jackson. Now, I understand that this hearing is about 
the 2012 appropriations bill. If your question is about fully 
funding the 2012 appropriations bill, then I assume that the 
Secretary will fund community health centers at the same level 
that she has funded them in the past under that money.
    Mr. Rehberg. Including the--taking my time back.
    Mr. Jackson. Can you offer some clarity to all of us, Mr. 
Chairman, on what moneys you are specifically talking about in 
the stimulus bill that need to be appropriated that have not 
been appropriated, if that is your concern?
    Mr. Rehberg. Reclaiming my time, the question becomes if 
funding is provided in the fiscal 2011 continuing resolution 
and, we can suggest, fiscal 2012, fully funding, whether the 
source is from our appropriated dollars or from Obamacare if we 
are not successful in repealing, and you get the mandatory 
$1,000,000,000, the question becomes will you be able to 
provide the same grants to the 127 that were either expanded or 
opened as a result?
    Ms. DeLauro. Would you yield, Mr. Chairman?
    Mr. Rehberg. No.
    Secretary Sebelius. Again, Mr. Chairman, I don't know--what 
I cannot do off the top of my head--I would be delighted to get 
this answer from HRSA--is to give you a specific answer about 
the same grants. I don't know what that means. I am not quite 
sure. I can tell you that the President's budget requests 
$2,118,000,000 for community health centers. House CR of fiscal 
year 2011 would reduce that number to $1,176,000,000. So there 
is a $1,000,000,000 gap between what the House CR is 
suggesting. Could we fully fund all of the centers that are 
currently----
    Mr. Rehberg. What I am suggesting is, forget the billion. 
We will give it back. All right? You just got it back. You are 
going to get the $1,000,000,000 back.
    Secretary Sebelius. Okay.
    Mr. Rehberg. All right. You get your fiscal 2011 request, 
and you get your fiscal 2012 request. The problem is 127 
centers received 2-year grants under the stimulus, and I am 
asking, are you going to continue to include them in the base 
then so that they are not going to close as a result of a 
continuation of the $2,000,000,000?
    Secretary Sebelius. A number of those centers, Mr. 
Chairman--this is why I would like to get you a very specific 
answer. A number of those centers have added services. They are 
not new centers. They have added mental health centers. They 
have added dental chairs. They have added prenatal services. A 
number of our satellites help existing health centers which now 
provide additional care. There are some new start-ups.
    I would be delighted to answer that very specifically, but 
we intend--I think the $2,118,000,000 would fund the expanded 
footprint and be able to take care of 23 million Americans.
    Mr. Rehberg. Thank you.
    Ms. DeLauro.

                               HEAD START

    Ms. DeLauro. Well, I think we want to get the record that 
shows that, Madam Secretary, that we are going to get the 
$1,000,000,000 back, and that we are going to fund the money in 
the 2012 bill. I think it has been a good day on this 
committee. So I take it to the bank.
    I am glad my colleague from Arizona came back in, because 
with regard to Head Start, Arizona would lose about--about 
3,400 kids would lose services.
    But I understand your point about the concerns about 
quality, and I think the Secretary talked about that as well, 
as we all do. And I am a very strong supporter, as you quoted 
my remarks, of Head Start.
    But I also want to say to you with regard to that study 
that, again, in spite of the ups and downs in achievements, and 
the Secretary talked about how to try to strengthen Head Start 
programs, the long-term studies--I think it is important for 
you to know this--came to a conclusion that there have been 
significant improvements in educational life outcomes for kids 
who go through this process: increased high school graduation, 
fewer grade repetitions, fewer kids going to special ed, higher 
vocabulary, better emotional development, reduced mortality 
rates, long-term outcomes in adults who attended Head Start. 
These are not my words, but the Committee on Economic 
Development.
    This is the business community essentially, about 200 
business leaders and universities presidents. The president, a 
gentleman by the name of Charles Kolb, takes a strong stand 
over the past decade in support of early education development 
programs. Research shows that the programs are investments. 
There is no more effective investment than the focus on high-
quality early learning, both short- and long-term investments 
in relation to economic development. He supports where we are 
going and where the budget is going.
    Ben Bernanke--and I talked about him yesterday in the 
education hearing--says the most important fiscal issue is 
whether the public interest is served by the composition of the 
government's budget. Even though budget balance is important, 
pay-off to the early childhood programs are especially higher 
as a result of the beneficial returns to the overall economy.
    Nobel Prize winner James Heckman: Early interventions 
produce broad-based benefits, reduce social and economic 
inequality. At the same time they promote productivity, 
economic efficiency, so they are both fair and efficient.
    So the issue is, yes, we can correct where the difficulties 
are, and there are all kinds of efforts to do that, but I want 
to ask the Secretary, can you tell us what the 2012 budget 
would do specifically to support this very successful program?
    In addition, I want you to comment on what happens if we 
have what H.R. 1 produced, which is that we cut the 
appropriation by $1,100,000,000 below the 2010 level? We 
haven't heard much in the way of a rationale behind the 
decision apart from the general need to balance the budget. If 
the majority is successful in this massive cut to Head Start, 
what is the effect?
    Secretary Sebelius. Well, Congresswoman, it is our estimate 
that about 218,000 children who are currently served in the 
Head Start program would not have an opportunity to participate 
in those early learning opportunities. We do take the critiques 
very seriously about quality and about school readiness, and I 
think that while Congressman Flake mentioned the Department of 
Education testimony yesterday, I think there has been very 
positive collaboration where Head Start had some, I think, 
great practices in terms of parental involvement and social and 
emotional development, the educators had some considerable 
success in school readiness, and the collaboration around those 
efforts to make sure that not only every parent has some 
confidence that the placement for his or her child will lead 
them to school success, but also beginning to give some value 
rankings so parents have a better way to judge program quality.
    So we are not only eager to have the President's approved 
recommended budget for Head Start, but also continue to work on 
the quality initiatives which I think will pay huge dividends 
in the long term.

                         CMS PROGRAM MANAGEMENT

    Ms. DeLauro. For the second that I have left, probably, 
just cut to the chase. This is about the 13 percent cut in the 
majority's budget in regard to CMS and the Medicare program 
management. I am going to lay out the question, because I think 
it is important to know what that cut would do to CMS. Would it 
basically be forced into just paying whatever bills come in the 
door, or not being able to pay bills and to keep falling behind 
in processing, and what that may mean to the Medicare 
population in terms of that 13 percent cut.
    My time is up, and maybe we are going to do another round.
    Mr. Rehberg. Go ahead.
    Ms. DeLauro. Thank you.
    Secretary Sebelius. I think the Congresswoman is referring 
to a cut that, again, is in H.R. 1, $458,000,000,000 for--below 
the 2010 funding levels for the Medicare Administration, and, 
Mr. Chairman, we see this as very problematic. We anticipate 
between 2010 and 2012, we will--we know we will have the first 
of the baby boomers coming into Medicare this year. We think 
the enrollment will grow from 47 million to 50 million, and 
that basically $500,000,000 cut in the overhead will be at a 
time when the enrollment will have grown by 12 percent. So that 
cut means significant delays in claims processing, significant 
hampering of our ability to work on waste, fraud and abuse, as 
well as other areas.
    Mr. Rehberg. Thank you.
    Mrs. Lummis, welcome.
    Mrs. Lummis. Thank you, Mr. Chairman. May I have 5 minutes?
    Mr. Rehberg. You may.

                           MANDATORY SPENDING

    Mrs. Lummis. Oh, fabulous. Thank you.
    Hi, Secretary.
    I want to focus on some of the mandatory appropriations in 
the new health care law and how they augment the 
administration's request for fiscal year 2012 discretionary 
funds. I see that your request is almost $800,000,000 less than 
fiscal year 2010 funding levels, but I also know that that 
excludes the mandatory spending that is augmenting 
discretionary programs that is in the new health care law.
    So here is my question. In light of the significant amount 
of mandatory spending provided in the new health care law, 
because the budget does not provide a true reflection of the 
costs of discretionary programs since those augment 
discretionary funding, would you be willing to provide an 
addendum to your budget that shows how much by program, an 
actual breakdown, is going to be spent no matter what color the 
money, no matter what the source, so it includes all mandatory 
and discretionary funding sources, whether they came through 
the new health care law or your budget?
    Secretary Sebelius. Well, Congresswoman, first of all, I 
think that is in the budget. The spending amounts that are 
included in the Affordable Care Act are reflected in the 2012 
budget, and they are reflected every year. They will be 
reflected every year beyond that. So that currently is 
captured.
    I would also suggest that the practice of including 
mandatory and discretionary funding in laws is not a practice 
that is unfamiliar to Congress. In fact, the Balanced Budget 
Act and the Deficit Reduction Act and certainly the CHIP 
Expansion Act all included mandatory funding. About 
$50,000,000,000 of the mandatory spending in the Affordable 
Care Act actually deals directly with CHIP, the early retiree 
plan and the high-risk plan, but those dollar amounts are 
currently in our 2012 budget.

                          CMS INNOVATION FUND

    Mrs. Lummis. Madam Secretary, then let us talk about the 
CMS Innovation Fund, the $1,000,000,000 implementation fund. 
Can you provide me a breakdown and some information on that 
specifically?
    Secretary Sebelius. I think it is $10,000,000,000 that is 
the total amount of the innovation fund, and I am sorry--
    Mrs. Lummis. Could you break it down?
    Secretary Sebelius. Well, the innovation fund has not yet 
released dollars for any of the grants. They have put out some 
proposals that States and health systems and others are about 
to come and present proposals on. But if you are asking for 
spending out of the innovation fund, that has not begun. The 
innovation fund just began in March of this year. It just sort 
of launched, but over the course of the 10 years, there will be 
a total of $10,000,000,000 available.

                        FY 2012 BUDGET PROPOSAL

    Mrs. Lummis. Thank you.
    Now can you tell me what the total amount of fiscal year 
2012 spending is and the increase over fiscal year 2010 once 
you account for all the mandatory and discretionary funds on 
these historically discretionary programs?
    Secretary Sebelius. Well, Congresswoman, that is a 
difficult question to answer. I can tell you what the President 
has proposed, and that is what our budget reflects. We don't 
have a 2011 budget. We are operating currently on 2010 spending 
levels, and so it is almost--I can tell you what is proposed, 
and, again, that is what is before you and before this 
committee, and it is all the spending that is recommended in 
those programs. That is what the budget is.
    Mrs. Lummis. Mr. Chairman, I don't think I am making myself 
clear, so what I will do is submit a series of written 
questions.
    Secretary Sebelius. Be delighted to answer those.
    [The information follows:]
    Mrs. Lummis. Thank you very much.
    Mr. Rehberg. Thank you, Mrs. Lummis. As always you have the 
opportunity to submit your questions for the record.
    I understand we are in the grace period. They said between 
11:20 and 11:30 votes would occur, so we will do as many as we 
can, but not miss votes.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman, and I think I will 
take at least a minute to say happy birthday since he has 
brought us all cupcakes. Happy birthday. Did you bring for the 
audience, too?
    Mr. Jackson. I can't quite make it to the audience, but red 
velvet for Democrats and Republicans.
    Mr. Rehberg. You didn't take these from your kids. You gave 
them some as well?
    Secretary Sebelius. I know there is a daughter cupcake 
thing.
    Mr. Rehberg. Can I give one to the Secretary, please?

                          BIOMEDICAL RESEARCH

    Mrs. Lowey. Let me just say we really do wish you a happy 
birthday, and I think I will segue to the NIH.
    I referenced, Mr. Chairman, the NIH before, but we will try 
and follow the guidelines and eat healthily, but every once in 
a while we can have a cupcake. But we really do appreciate the 
important work that the NIH is doing, and I am very concerned, 
I referenced it before, that in H.R. 1, the House-passed 
continuing resolution--I hope we can correct it as the 
negotiations go on--the NIH spending is being cut by 5 percent.
    Now, let me just say when you cut the NIH, it is not only 
putting some of those many proposals on the line that could be 
leading to all kinds of important research, it is loss of more 
than 17,000 jobs. And it includes more than 250 at just 2 New 
York hospitals, Mount Sinai, New York Presbyterian Medical 
Centers. And I am sure we can all say the same thing, because 
these hospitals, these institutions are very devoted to medical 
research.
    Frankly, when President Obama talked about winning the 
future, Madam Secretary, to me there is nothing more important 
than investing in the National Institutes of Health. Not only 
is it the global leader in innovative, lifesaving biomedical 
research, it supports more than 350,000 high-paying research 
positions at more than 3,000 facilities across the country. So 
that is why I voted against the CR, Mr. Chair, because I am 
very concerned that it would cut 5 percent. That 5 percent 
would mean a loss of over, as I look at these numbers, 
$100,000,000 to universities and researchers.
    So maybe you can share with us, what would that cut mean to 
biomedical research? What is the impact?
    Secretary Sebelius. Well, Congresswoman, the NIH-
recommended level in H.R. 1, I think, is particularly 
troubling. It not only reduces overall funding to below the 
2008 level, which is enormously significant, but there also is 
a lot of direction in resolution of how those grants would have 
to be awarded, and it is our best view, based on Dr. Collins' 
analysis and the look by the leadership of NIH, that it would 
really require curtailing most of the large clinical studies 
under way, because we would be directed to put X amount of 
dollars to X amount of programs over the years. So about half 
of the 100 largest clinical studies, including those on cancer 
and Alzheimer's, would probably be cancelled at this point if 
that cut were to be enacted, and as you say, right now the 
average denominator is about a 7 to 1 for every dollar, and in 
research grants there are approximately 7 jobs created in those 
local communities. So this has a huge impact not only on the 
lifesaving science, but a huge job impact on communities 
throughout the country.
    Mrs. Lowey. Thank you.
    Mr. Rehberg. Thank you.

                               HEAD START

    Mr. Flake.
    Mr. Flake. Thank you.
    I just wanted to follow up on the Head Start thing. Just to 
clarify, the only study--and it was rereleased, done earlier, 
but just released by DHS--talking about the fact that the 
studies show that whatever gains are achieved, by and large 
those gains are gone by the end of the first grade. Yes or no, 
have there been any definitive studies, scientific studies, to 
refute those claims since that time, or is the fact that we say 
that programs are changing, we are doing better there now, is 
that just anecdotal?
    Secretary Sebelius. That, I would say, Congressman, is the 
largest comprehensive study that has been done in the last 
decade. As I say, it is almost 5 years old, 6 years old, and 
there have been significant improvements. There hasn't been a 
similar comprehensive study. There have been smaller studies 
which actually show better results outcomes and ones that we 
are--but that study in and of itself does show that there are 
significant cognitive improvements in those children as they 
hit school.
    And again, I know that while that improvement level may 
level out, the notion that we don't start 5-year-olds 
significantly behind their peers, I think, is a major step 
forward for the low-income kids served by Head Start and Early 
Head Start.
    Mr. Flake. You talked about the cost, and it will lead into 
my next question as well. Douglas Besharov of the University of 
Maryland estimates that it costs us $22,500 to keep one child 
in year-round Head Start. Now, typical preschools, that cost is 
about $9,500, so we are double the costs of a typical preschool 
for this very, very, very expensive program that seems to have 
results that, if anything, level off or disappear by the end of 
first grade. So I hope that that is cause for more alarm than 
we are seeing.
    And then it just troubles me that now when we see the 
Department of Education now jumping into early childhood 
education to the tune of $350,000,000 is what they are 
proposing that we appropriate, I can tell you it is falling on 
skeptical ears here.

                            NIH PUBLICATIONS

    But with regard to costs and what your agency is doing, I 
saw the other day that there is a press release, NIH News, 
National Institutes of Health is releasing a cookbook 
encouraging families to eat healthfully, a cookbook that is 
costing the taxpayers an estimated $150,000. What is NIH doing 
releasing a cookbook for $150,000, and why are we funding it?
    Secretary Sebelius. Well, Mr. Chairman, there is a--I am 
sorry, Congressman.
    Mr. Rehberg. He is not chairman yet.
    Secretary Sebelius. Sorry, sorry. There is a directive to 
NIH as a component of a number of their programs to put the 
evidence-based science into the community vernacular and allow 
people to take advantage of it. In this particular incidence, 
it is science based on healthy eating and healthy diet. And so 
the cookbook is a way of translating what they know, the 
science, to produce into a vernacular that hopefully people can 
take advantage of.
    Mr. Flake. I might suggest there are a lot of other people 
putting cookbooks out there. There is a congressional cookbook, 
for crying out loud.
    Secretary Sebelius. Is it based on NIH science? I am not 
sure. If this is an example, I think we have a little problem.
    Mr. Rehberg. Mr. Flake, if I might, we have about 7 minutes 
left in the vote. I would like to ask----
    Mr. Flake. That is fine.
    Mr. Rehberg. It started. And if anybody has a burning 
question you would like to ask, I would certainly grant you 
that opportunity. Otherwise you could submit it for the record.
    Ms. Lee.

                          ADAP FUNDS TRANSFER

    Ms. Lee. Thank you very much. I just wanted to go back to 
the question on HIV and AIDS as it relates to last year. The 
administration transferred about $25,000,000 in fiscal year 
2010 funds for the ADAP program to help shore up the treatment 
programs for people living with AIDS. A number of States now 
have almost abandoned them. So I wanted to see if you had any 
plans to provide an additional transfer of funds during the 
current fiscal year as we work through this budget.
    Secretary Sebelius. Well, Congresswoman, we are working 
very, very closely with States. As you know, it was 
$30,000,000, and it was specifically because State resources 
had dropped so precipitously, and we are monitoring this very 
carefully to make sure that we can adjust resources as we move 
along.
    Ms. Lee. Thank you.
    Mr. Rehberg. Mr. Jackson.
    Mr. Jackson. Mr. Chairman, let me enter, a unanimous 
consent, one letter for the record, if you don't mind, and I 
have two very quick questions.
    Mr. Jackson. Madam Secretary, I understand that the NIH 
Director plans on dismantling the NCRR, the National Center for 
Research Resources, to implement a new IC, institute center, on 
translation research, resulting in several NCRR programs 
needing to be moved to this new IC. Specifically, I am 
concerned about the IDeA, Institutional Development Award, and 
the RCMI, the Research Centers in Minority Institutions, 
programs currently at NCRR. I understand that RCMI will be 
housed at NIMHD, the National Institute for Minority Health and 
Health Disparities, but not at IDeA. If both programs are 
currently being administered by the same staff, and they work 
well together, for me it makes sense to keep both programs 
together.
    Madam Secretary, I wish I could bring this to your 
attention so that you could please try your best, consistent 
with the plan that we have been following at least for the last 
10 years in the committee, to ensure that this program is 
appropriately housed at NIMHD at the NIH--these alphabets are 
killing me.
    And I would ask unanimous consent, Mr. Chairman, to again 
submit that letter for the record and to allow the Secretary an 
opportunity to take a hard look at this issue.
    [The information follows:]



    
    Secretary Sebelius. I will.
    Mr. Jackson. Very quickly, Mr. Chairman, my final question.

                                 LIHEAP

    Secretary Sebelius, this past year the LIHEAP program 
served 460,000 households in Illinois. Illinois is currently 
ranked the third highest recipient of LIHEAP funds, and my 
district continues to be the largest recipient of LIHEAP. Even 
at the current $5,100,000,000 funding level, these funds can 
only provide one in five eligible households in this country 
with heating and cooling assistance.
    Could you explain to us what the cuts in H.R. 1 would do to 
the LIHEAP program for current low-income residents? And I'll 
submit the rest of my questions for the record.
    Mr. Rehberg. Thank you.
    You have 10 seconds, or you have got to give the cupcake 
back.
    Secretary Sebelius. It would be very difficult, and it 
would turn--the budget returns LIHEAP to its historic levels, 
but there is no question it is a very significant cut.
    Mr. Jackson. Madam Secretary, thank you.
    Mr. Rehberg. We thank you for being here today. Sorry for 
allowing you the opportunity to have 20 minutes off. We were 
looking forward to until noon, but thank you for taking the 
time to come up and be with us.
    Secretary Sebelius. I will see you again April 1.
    Mr. Rehberg. Yes you will.
    Meeting is adjourned.



                                           Tuesday, March 15, 2011.

                              PELL GRANTS

                                WITNESS

MARTHA KANTER, UNDER SECRETARY, DEPARTMENT OF EDUCATION

                     Opening Remarks by Mr. Rehberg

    Mr. Rehberg. Good morning and thank you all for coming this 
morning. This begins a series of oversight hearings we will 
have on various issues of interest to the three departments 
that we are responsible for, plus related agencies.
    And you just get to be the first. We welcome you.
    I don't think I need to describe too much the situation we 
find ourselves in. In an attempt to help as many students, 
long-term students and middle-income, fulfill the dream of 
going to college and bettering themselves in the career market, 
a number of changes have been made over the course of the years 
that has made the program more expensive for the Federal 
Government.
    But that is not necessarily always a bad thing, unless of 
course a deficit is run and then decisions have to be made of 
either having to find the difference between what was 
appropriate and what was desired, what was used and what we can 
afford. And unfortunately, we find ourselves in that situation.
    So, in an attempt to at least identify some of the possible 
solutions, we asked Ms. Kanter to come in and give us some 
testimony and discuss and answer our questions. And maybe you 
could enlighten us as to what the Administration is working on, 
how Congress fits into that, and ultimately, we can come to the 
conclusion of how to make up the difference between the 
financial shortfall that seems to be existing in a semi-
mandatory program.
    So, without further ado, I will call upon our ranking 
member, Ms. DeLauro.

                     Opening Remarks by Ms. DeLauro

    Ms. DeLauro. Thank you so much, Mr. Chairman.
    And I want to say thank you to Secretary Kanter, for 
joining with us today. And Mr. Skelly, it is always good to see 
you here at the table.
    Pell Grants are the foundation of our student aid system, 
which seeks to make sure that students with low and moderate 
incomes can afford a college education. And right now, Pell 
Grants are helping more than 9 million people go to college.

INCREASING COST OF THE PELL GRANT PROGRAM AND INCREASE IN THE NUMBER OF 
                          ELIGIBLE RECIPIENTS

    There is no doubt that the cost of the Pell Grant Program 
has been rising rapidly. As I understand it, the single most 
important factor has been growth in the number of eligible 
students. Between 2008 and now the number of students receiving 
Pell Grants has increased by more than 3 million. The Great 
Recession that started in 2008 was a major factor contributing 
to this growth. People who have lost their jobs and incomes are 
going back to college to acquire new skills for the economic 
recovery. That is exactly what we would hope that people would 
do; take advantage of the opportunity to retool their skills 
for the jobs of the 21st century.
    The question for our subcommittee and the Congress is, do 
we say to these new students we cannot afford Pell Grants for 
you? Do we cut Pell Grants for everyone to try to offset the 
growth in the number of students eligible?

                     CUTS TO PELL GRANTS IN H.R. 1

    That is the approach the majority took in H.R. 1, which 
passed the House last month. The legislation cuts the Pell 
Grant by $845 for almost every student in the program. That cut 
is particularly serious because Pell Grants have barely kept up 
with the cost of going to college, even with the increase 
enacted a couple of years ago in the Recovery Act.
    At last Thursday's hearing, I asked Secretary Duncan and 
his budget director what H.R. 1 would mean for the average 
percentage of college costs covered by Pell Grants. They 
replied that the percentage would fall to its lowest level in 
38 years.

              PRESIDENT'S BUDGET PROPOSAL FOR PELL GRANTS

    I hope that the House will change its mind about cutting 
Pell Grants and that we can find ways to keep this commitment 
to students. The President's budget rightly places a high 
priority on maintaining this foundation of college student aid 
but proposes some changes to other student aid programs to 
produce savings that could be applied to Pell. It also proposes 
a change to the Pell program to eliminate the year-round Pell 
option that has turned out to be much more expensive than 
originally expected. And I look forward to learning more about 
the proposals.

                       IMPORTANCE OF PELL GRANTS

    Fundamentally, we need everyone in this country to be able 
to afford to go to college if they have the gumption and the 
talent to do so and if they are willing to work hard at their 
studies. College cannot be just for people whose families have 
enough money to afford the cost. Broad access to college is 
important for raising people's job prospects and income. It is 
vital to the future of our economy since the industries that 
will keep us competitive require people with high knowledge and 
skills. It is crucial for the continuing functioning and 
flourishing of our democracy.
    Remember, it was not that long ago that education was only 
the purview of the rich. We in the Congress have worked hard to 
change this. And that is the fundamental power of this 
institution; to help make opportunity possible for middle class 
and working families. By doing so, we have further expanded the 
middle class in this country.
    According to the U.S. Census, the average college graduate 
makes almost $22,000 more a year than the average worker with 
only a high school degree. Over the course of a lifetime, that 
adds up to close to $1,000,000 in earnings.
    Senator Claiborne Pell understood the importance of 
education to maintaining American prosperity. And as he said, 
and I quote, the strength of the United States is not the gold 
at Fort Knox or the weapons of mass destruction that we have 
but the sum total of the education and the character of our 
people.
    That is what is at stake here, the very strength of our 
Nation. We do not hear China or our other international 
competitors saying, oh, we are spending too much on higher 
education; we need to cut back. Neither should we. We should 
find a way to keep our commitment to Pell strong so that 
millions of students can continue to take their futures in 
their own hands.
    I thank you.
    And I thank you, Mr. Chairman.
    Mr. Rehberg. Thank you.
    Ms. Kanter.

            Opening Remarks by Under Secretary Martha Kanter

    Ms. Kanter. Mr. Chairman and members of the committee, I 
appreciate the opportunity to testify this morning on the Pell 
Grant program.
    To increase our Nation's economic prosperity and security 
we want American workers to out-educate, out-innovate and out-
compete the rest of the world. Today Americans with college 
degrees earn 40 percent more than high school graduates and are 
twice as likely to be employed. Community college graduates 
earn 29 percent more than those with high school diplomas. And 
looking ahead, at the new jobs in our Nation, almost half of 
them are going to require some postsecondary education.
    Given these realities and the administration's commitment 
to a $1,000,000,000,000 deficit reduction over the next decade, 
President Obama has set a national goal for the U.S. to once 
again have the highest proportion of college graduates in the 
world.

        NEED TO INCREASE NUMBER OF WORKERS WITH A COLLEGE DEGREE

    Today only 42 percent of American workers under age 35 have 
a college degree. And that places us ninth in the world in 
terms of college attainment. By contrast, countries such as 
Canada and South Korea, more than 55 percent of young adults 
have degrees, have college degrees. So to get back to first in 
the world, between now and 2020 we need to increase by 50 
percent the number of graduates with degrees. That means 8 
million more students above the expected growth due to 
population in our graduates.
    So, for four decades, the administration and Congress have 
supported expanding higher education opportunity for low-income 
Americans through the Pell Grant Program. In the past 2 years 
alone the number of students, as was said, who received Pell 
Grants, grew from 6.2 million to 9.4 million Americans; a 52 
percent increase. In large part, due to the growing student 
demand and an increase in the maximum Pell Grant award to help 
students pay for college, the cost of the Pell Grant Program 
has grown significantly, as you said.

                  PELL GRANT FUNDING AND MAXIMUM AWARD

    If no changes are made in the program funding would need to 
increase by more than $20,000,000,000 from 2011 to 2012. This 
is for three reasons: First, because costs have been rising as 
notably more students go to college; second, between 2009 and 
2011, funding needs were partially addressed outside of the 
regular appropriations bills; and third, shortfalls 
accumulating to $11,000,000,000 going into 2011 also must be 
addressed in 2012.
    The fiscal year 2011 continuing resolution passed by the 
House, H.R. 1, would address these funding challenges in the 
wrong way, in our opinion. It would cut the maximum grant by 
$845 in 2011. And if these cuts were extended into next year 
with no further action, the maximum award would be cut by more 
than half.
    The administration has proposed a balanced approach that 
makes tough choices needed to protect the $5,550 Pell Grant. We 
have a commitment to several principles: First, as I said, to 
protect the maximum award at $5,550; second, funding Pell 
within the framework of the 5-year freeze on discretionary 
spending and without forcing cuts in other priority 
investments; and third, putting Pell Grants on a sound 
financial footing for future years.
    The President's 2012 budget request for Pell Grants in the 
amount of $28,600,000,000 supports these goals. We urge the 
Appropriations Committee to provide these funds as part of a 
coordinated solution to protect millions of students from large 
cuts in the maximum Pell Grants.

                       PELL GRANT PROTECTION ACT

    We proposed a series of steps in the Pell Grant Protection 
Act which will require involvement by the Committee on 
Education in the Workforce. The single largest step is 
eliminating the ability of students to get two Pell Grants in 
one year, a policy that costs far more than we expected, 
without delivering clear evidence that it is meaningfully 
advancing college completion.
    Because our proposal is effective for the 2011/2012 
academic year and families are planning right now, I urge 
Congress to move quickly. And I hope we will have an 
opportunity to talk more about this policy today. In addition, 
the act would eliminate student loan subsidies for graduate and 
professional students. Today the Federal Government pays the 
interest on these loans while the students are in school. But 
because many students will be able to repay their loans easily, 
we believe that the Pell Grant program is a higher priority.
    These are tough cuts. Moreover, the Income-Based Repayment 
Plan enacted by Congress in 2007 and expanded last year is 
available to help borrowers who struggle to afford their loans, 
who are seeking and receive graduate degrees.
    We have also proposed reforms to the loan programs to give 
students more choices and free up resources for the Pell Grant 
program.

                  COLLEGE COMPLETION INCENTIVE GRANTS

    In addition to helping students and families pay for 
college, our 2012 request includes targeted investments to help 
economically disadvantaged students enroll in and complete 
college, which helps to meet the 2020 goal. This includes the 
College Completion Incentive Grants, which is a program that 
would reward States and colleges that increase their number of 
graduates with a college degree or certificate.

                      FEDERAL ROLE IN STUDENT AID

    By requesting both authorizing and appropriation 
legislation, the administration recognizes that there is a 
shared responsibility for protecting the $5,550 Pell Grant.
    More than ever, our Nation's students depend on Federal aid 
to enroll in and complete higher education. Just 5 years ago, 
two out of five full-time students had a Pell Grant, a loan or 
both. Today it is nearly four out of five. Protecting the 
$5,550 Pell Grant for all students will require a coordinated 
effort, as I said, and we look forward to working with the 
Appropriations Committee and the authorizing committees on this 
important issue.
    In closing, let me just add that this administration is 
deeply committed to deficit reduction, but not at the expense 
of education. To accomplish our goals, we are cutting where we 
can so that we can invest where we must. I am available to 
answer any questions you will have.
    And thank you for the opportunity to prepare this overview.
    [Prepared statement of Under Secretary Martha Kantor 
follows:]



                         PELL GRANT ELIGIBILITY

    Mr. Rehberg. Thank you, Ms. Kanter.
    One of the things I learned as I was getting to know Pell 
Grant authorizing legislation and the appropriation shortfall 
better, both for this hearing and in preparation for chairing 
this subcommittee, was that an individual can go to school for 
as long as 9 years on Pell Grants without the necessity to 
complete a degree. Has there been conversation within the 
Administration of trying to address that issue?
    Because the taxpayer, the hardworking middle class taxpayer 
who is out there but didn't get a chance to go to college and 
perhaps didn't want to go to college, became a productive 
member of society and is out paying taxes to fund this program. 
And when they find this out--and I have asked the question in 
town hall meetings all over Montana--I say, do you realize 
that, up until July 1st of 2008, there was no limit to the 
number of Pell Grants one could get. And first of all, my 
question is, can those people that were on Pell Grants that are 
still on Pell Grants prior to July 1 of 2008 remain on Pell 
Grants indefinitely for life, even without the requirement of 
getting a degree.
    Ms. Kanter. Well, first, Congress authorized the Pell Grant 
to be available for 18 semesters, so that equates to 9 years, 
as you said.
    Mr. Rehberg. Without necessity of getting a degree? You 
don't have to get a degree during the 9 years?
    Mr. Skelly. You have to be enrolled in a degree program to 
get Pell in the first place.
    Mr. Rehberg. Right. But there is no completion requirement; 
you don't actually have to get a college degree. You can be 
getting Pell Grants for a period of 9 years without getting a 
degree.
    Ms. Kanter. You could. But frankly, 99 percent of students 
are getting Pell Grants for 6 years; 75 percent of the students 
are getting Pell Grants for the first 2 years. So less than 1 
percent of students, it trails out to a very small number of 
students.
    Mr. Rehberg. My first question was about those that were on 
Pell Grants prior to July 1 of 2008, there is no lifetime cap?
    Mr. Skelly. No. The cap was implemented starting in 2008. 
We looked it up, and there were only 700 some students we 
thought were getting a Pell Grant for more than 18 semesters 
back then, so it is not a huge number. It is less than 1/10th 
of 1 percent.
    Mr. Rehberg. In our discussions then with the 
Administration to try to make changes to save Pell Grants, 
which is what the authorizing changes that you are suggesting, 
would it behoove us to set either a yearly limit to try and 
move students through quicker and/or require a degree, and if 
not, then after a period of time--not ding them the minute they 
quit college, but after a period of time--have a loan repayment 
on the grant because they did not complete the work with the 
funds they used and availed themselves of?

                   PROPOSED PELL GRANT PROTECTION ACT

    Ms. Kanter. I think you will see in the President's 
proposal two performance-based opportunities. One is called 
First in the World, which would make grants specifically to 
institutions of higher education to increase college completion 
and productivity. So those would be, the focus on graduation, 
completing college, maintaining quality, is a focus there.
    Mr. Rehberg. Is that in addition to a Pell?
    Ms. Kanter. Yes.
    Mr. Rehberg. In addition. So why not make it----
    Ms. Kanter. This is for all students.
    And the second one is grants to States to improve 
completion.
    Mr. Rehberg. Okay. Then I am not following you. I thought 
that was an additional program. You are not suggesting----
    Ms. Kanter. Those are within the Pell Grant Protection Act.
    Mr. Rehberg. No, within the Pell Grant----
    Ms. Kanter. Right, right. You get a Pell Grant, but 
institutions will be incentivized.
    Mr. Rehberg. I guess that is my problem with the program, 
is now you are telling colleges what they are supposed to be 
doing, and that is graduating students. I am looking at it from 
a different perspective. I am looking at the 9.6 million 
students that are going to be on Pell Grants, that are availing 
themselves of the opportunity for funds but then not completing 
the work.
    Ms. Kanter. Well, many of them are leaving because of 
financial hardship. So many of them are part time. They are 
raising families. They are working a job. In community 
colleges, over two-thirds of the students have jobs.
    Mr. Rehberg. So the Administration is not seriously 
considering any kind of an authorization change to require some 
kind of repayment if they do not complete the work?
    Ms. Kanter. We are looking at all performance-based 
mechanisms, but we have proposed several that we think will 
dramatically increase college completion, maintain quality and 
allow the Pell Grant program to be available for part-time 
students.
    Mr. Rehberg. So you would seriously consider some kind of a 
recommendation to require a grant repayment through a loan if 
they do not complete the work after 9 years?
    Ms. Kanter. We are really not looking at that opportunity 
right now. It is something that we could look at in the future. 
But we think that our proposals are going to incentivize States 
and institutions to increase the number of students completing 
college.
    We don't want to shut out the part-time students. And those 
students are predominantly, if you look at the numbers, are the 
ones that have to go part time because they have got many 
responsibilities. Texas did a study of students who left 
college, and their goal was to bring those students back. And 
they found that the students who left predominantly left 
because of financial reasons.
    Mr. Rehberg. Ms. DeLauro. 

                CHARACTERISTICS OF PELL GRANT RECIPIENTS

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Just a couple of points. So for a full time 4-year program, 
6 years could be the longest maximum time frame a school could 
use, is that right, for the Pell Grant?
    Mr. Skelly. Eighteen semesters.
    Ms. DeLauro. Right. But the part-time folks are what you 
are talking about. And let me just ask you, because of your own 
community school background. The youngsters who are going to 
our community schools--or that are not youngsters, they are 
older, the average age is--I have talked to folks in community 
colleges--from 19 years old to 58 years old. Now, are they 
mostly part time?
    Ms. Kanter. Many are part time returning to college for a 
second career. Actually, almost half of the Pell Grant 
recipients are age 23 or higher. And many have been displaced 
by the economic downturn, as you know; 84 percent of the 
students of that group have incomes less than $30,000.
    Ms. DeLauro. And so was that the rationale in terms of 
allowing for this part-time population, if you will, when 
Congress talked about the number of semesters involved, to 
allow folks to be able to complete it under this kind of a 
basis, was a consideration the part-time nature?
    Ms. Kanter. Yes.

         RAPID INCREASE IN THE NUMBER OF PELL GRANT RECIPIENTS

    Ms. DeLauro. Okay. I want to get to a bunch of questions 
about the number; why the rapid increase in Pell recipients? 
Why is it increasing so rapidly? Do you have estimates of how 
much of the increase is due to unemployed people? Do we have 
numbers that say people are going back for new skills? How much 
is due to reduced incomes and assets as a result of the 
financial crisis, the resulting recession? Is the growth 
largest in particular kinds of institutions, such as community 
colleges? How about for a particular group of students: older 
students, part time students, students with families of their 
own? What are the kind of demographics here, if you will?
    Ms. Kanter. The growth in the number of eligible students 
has been 40 percent. The weak economy has driven more students 
with financial need back to college. And I think the focus on 
the fact that we are not first in the world anymore, the fact 
that the new jobs, about half of them are going to require 
postsecondary education or training, is drawing lots of people 
back to college. These are older students. I went to Warren, 
Michigan. I saw people laid off from the assembly line. They 
were training for a health career. So people are having to go 
back and choose a second career or even to move up in the 
career they have or change jobs completely. So these are some 
of the reasons that students are coming back in droves.
    Ms. DeLauro. I think it is important to reiterate again 
that today the average earnings of a college-educated person is 
$43,000 while someone with just a high school diploma averages 
about $27,000. So the need for the skills and the training to 
be able to move forward I think is pressing.

                RISING COSTS OF POSTSECONDARY EDUCATION

    In tuition and fees at colleges and universities, I would 
expect that we would be seeing significant increases, 
especially at public colleges and universities as State budget 
shortfalls lead to less State support. Has that been the case?
    Ms. Kanter. Tuition has gone up, but I think there is a lot 
of confusion about tuition. And the total cost of attending 
college varies greatly. There is a sticker price. So, for a 
private 4-year institution, a sticker price averages $27,000. 
The net price actually is $11,320. Room and board is $9,700. So 
the total net for a private 4-year is $21,000. A public 4-year 
is $10,080. And a public 2-year school is $6,590.
    A lot of people confuse the cost, the total cost of 
education with tuition. Tuition is often used as a shorthand 
for the total cost of attendance. So three-quarters of students 
attend public colleges where the tuitions are, as I said, and 
after financial aid, net tuition at a public college is 
affordable. But room and board cost more. So the Pell Grant 
allows students to pay for the full cost of college, and it 
really is essential.
    Ms. DeLauro. How have Pell Grants been doing keeping up 
with college costs? And we know that Pell Grant amounts do not 
increase automatically. The amount is set in the annual 
appropriations bill. It has been increased from time to time. 
But how have the Pell Grants been keeping up with college 
costs? Where do we stand now in terms of the percentage of 
costs of college attendance covered by Pell Grants relative to 
where it was 10 or 20 years ago?
    Ms. Kanter. I looked at the cost of Pell Grant escalation 
over 32 years, and 38 years since the program started. Three 
decades ago, Pell Grants covered two-thirds of the cost of 
college education at a public institution. Today it is covering 
one-third.
    Ms. DeLauro. So we would go back 38 years if we implemented 
this?
    Ms. Kanter. Yes.
    Ms. DeLauro. Thank you.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Mr. Flake.
    Mr. Flake. Thank you, Mr. Chairman.

                          PELL GRANT PROPOSAL

    I apologize for missing the first part, so if the question 
has been asked, forgive me. Your budget, the Pell Grant, 
assumes that the authorizing committees are going to make 
certain changes. As the chairman has pointed out before, that 
may not happen. If it doesn't, what are the plans? Where is the 
administration going to go here? It could mean that taxpayers 
are on the hook for an additional $8 billion beyond the budget 
proposal. What are your plans if the cuts aren't made to the 
programs as the administration has advocated?
    Mr. Skelly. The budget does propose legislative changes, 
and we hope they will be made by Congress. It would be the 
Appropriations Committee and the authorizers. It has to be a 
collective effort. The process from Congress is up to the 
Congress to do.
    If you don't enact the kinds of changes, such as the 
elimination of the two Pell this year, you are going to have a 
shortfall. We suspect, by 2012, you actually have a shortfall 
of about $20 billion. The President has requested additional 
funds for Pell of $5.4 billion. He is hoping to have changes, 
such as the two Pell elimination, that will save about $7.6 
billion, and the other changes in mandatory programs that 
offset these proposals save another roughly $7.7 billion. If 
you don't make those kinds of changes, all you have is the same 
amount of money that we have in the current continuing 
resolution, $23.2 billion; you would have to have a very 
drastic cut of over half the Pell Grant in 2012.
    Ms. Kanter. Let me just add that all 9 million students 
will see a reduction in their grant. And as Mr. Skelly said, 
next year the Pell Grant would be cut in half. So it would 
devastate the ability of these students who are financially 
needy to go to college. If Pell Grants are funded at the $17.5 
billion that the House proposes and reduced to a $4,705 maximum 
grant in 2011, at that funding level the maximum grant is going 
to plunge to $2,220 in 2012, which is an unprecedented 60 
percent reduction. That is why we are so concerned about this.
    We are taking steps on our own to look at the expenditures 
and save a projected $4 billion over 10 years. We will improve 
the accuracy of the student aid award. So we have a whole menu 
of things that we are accomplishing in our budget proposal for 
the Pell Grant Protection Act.

       STUDIES RE IMPACT OF PELL GRANTS ON HIGHER EDUCATION COSTS

    Mr. Flake. Shifting gears for a second.
    Under Secretary, there are some studies, the Cato Institute 
has done a few, which seem to indicate that Pell Grants aren't 
necessarily responding to the cost in higher education; they 
are driving it. Do you put stock in such reports? To what 
extent is the increase in Pell Grants and Federal assistance in 
general, what kind of a driver is that for the cost of higher 
education rather than a response to it?
    Ms. Kanter. We had a 2001 report from the National Center 
for Education Statistics, NCES, which found that there is no 
association between Federal student aid and changes in tuition. 
This is particularly true with Pell, which, unlike student 
loans, are not award to all students. Moreover, the size of an 
individual's Pell Grant is a function of the maximum grant size 
and the out-of-pocket ability to pay for college, how much the 
family has or the student has, not the cost of attendance.
    Mr. Flake. 2001, 10 years ago, we have seen a significant 
increase in Federal assistance since that time. Would the same 
hold true today, do you suppose, if a study were to be done 
today?
    Ms. Kanter. I have no reason to think that wouldn't be 
accurate today. In fact, I talked with Mike McPherson from the 
Spencer Foundation about this, and I am sure there is other 
data to say that tuition and Pell Grants really are not related 
or not driving up the cost.
    Mr. Flake. Thank you.
    Mr. Rehberg. Ms. Lee.
    Ms. Lee. Thank you, Mr. Chairman.
    Good morning. Let me first commend yourself, Secretary 
Duncan, and President Obama, for the work that you are doing to 
ensure that higher ed opportunities for students of all ages 
and all backgrounds are affordable.

                           SECOND PELL GRANTS

    The funding made available through the Pell Grant Program 
continues to provide a real cornerstone of opportunity for many 
students who might not otherwise be able to afford to go to 
college, technical institution or community college.
    In my district, for example, student populations are older; 
they are year-round students. The maximum Pell Grant was 
$5,550. The provision though in H.R. 1 will reduce it by $850, 
which would be extremely detrimental.
    Also, in the budget request, the provision that limits Pell 
Grants to one award per year, this, again, is going to present 
a unique hardship for nontraditional students, older students, 
persons seeking to fast-track completion of their degree work, 
and they may not be able any longer as a result of this to 
obtain two grants in a year. So what is your perspective on 
that in terms of the potential adverse impact of these 
subpopulations of students, as it relates to their studies, say 
during the spring or summer sessions? That is one question.
    The second one is I understand, and I wanted to see what 
your perspective is and if this is accurate, that low-income 
and minority students, especially at 2-year and technical 
skills preparing institutions, fail to apply for Pell Grants. I 
don't know if this problem is prevalent. What are the 
implications for this if that is the case?
    Ms. Kanter. Let me take the first one. We don't have all 
the data we need yet on the characteristics of students who 
receive a second Pell Grant. But we do know that they are less 
likely to attend public 2-year schools; 27 percent of second 
Pell aid versus 34 percent overall. And we know that students 
for whom the policy was intended to benefit, that is who we 
tried to benefit for the second Pell. We know that the summer 
enrollment grew only 1 percent. So the whole idea was to 
accelerate the time to degree, to shorten the time to degree, 
accelerate graduation, and we weren't seeing that in the 
initial data set that we looked at.
    We made some really tough choices. And our highest priority 
was to protect the $5,550 Pell for everyone. The other thing I 
would probably add is that the second Pell Grant, while great, 
escalated costs so much more than we had originally estimated, 
which was $300 million; now it is in the billions, and we 
couldn't afford that. We didn't see that it was accelerating 
for school.
    The other thing that I think is important to is that part-
time students can go and use their Pell Grant to go to summer 
school. That was not clear from a lot of the media reports. So 
if you are a part-time student and you are on your Pell Grant, 
you can go in the summer. That was another factor that we 
looked at.

                      GRANTS FOR MINORITY STUDENTS

    Ms. Lee. Let me ask the second question as it relates to 
minority students. Is that accurate, do you know if in fact 
low-income and minority students fail in larger percentages to 
apply for Pell Grants?
    Ms. Kanter. Well, we have a huge outreach effort for low-
income minority students. We know that about 40--when I looked 
at the Pell numbers--about 49 percent of all Pell recipients 
are Caucasian students and about 45 percent are Hispanic or 
African-American students. However, there are more students 
that are eligible for Pell that are not yet in the pipeline. So 
we have several things that we are doing.
    One is the college access challenge grants that were made 
available to every State. It was $150,000,000 every year for 5 
years to increase opportunity and outreach for low-income 
students. States have sent us lots of creative ways that they 
are looking at doing that outreach.
    The other big program we have is the GEAR UP program, which 
is focused specifically on middle school and high school 
students to get that pipeline ready for college.
    Ms. Lee. Thank you very much.
    Mr. Rehberg. Thank you.
    Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.
    First, I would like to say, Dr. Kanter, it is so nice to 
see a community college gal here in Washington. And in my home 
State of Wyoming, the community college system is so augmenting 
to the single University of Wyoming, our only a 4-year degree 
granting institution. And without our community colleges, we 
wouldn't have that full complement of education opportunities 
for a broad spectrum of people. And so I am just delighted to 
see a community college person at the helm.

             TEACH GRANTS VS. PRESIDENTIAL TEACHING FELLOWS

    A few questions, could you walk me through, I don't quite 
think I am there, in understanding the discrepancy in the 
budget authority between the old and the new programs, meaning 
the TEACH grant versus the Presidential Teaching Fellows? As I 
look at it, the new program would cost $185 million; the old 
program, fiscal year 2010, $27 million; fiscal year 2011, $22 
million. It looks like a huge increase to me, but I understand 
there is some scoring issue that I may not be completely aware 
of.
    Ms. Kanter. Right. Our intent was to convert the existing 
program to a new program that would incentivize students in 
their senior year who were far more likely to actually enter 
the teaching profession than incentivizing them in the freshman 
and sophomore years, where students are just being introduced 
to whether they really are committed to a teaching job, and 
then to give back over 3 years after graduation in the teaching 
profession and to reward high-performing institutions that 
States would designate as high-performing to get those TEACH 
grants.
    So I think the whole effort was to take existing funds and 
refocus them in this new way to reward the high performers to 
actually help the not-as-high-performing institutions move 
toward that level of excellence and then to shut down the poor 
performers. Actually, historically, when you look at the 
program today, only certain States designated only 38 
institutions as poor performers. And that was a concern in the 
breadth of the numbers. We have 1 million teachers to get those 
million teaching jobs over the next 5 to 10 years. So we have 
got to incentivize the full range of students to be competitive 
for those jobs.
    And this program rewards high performers, and it was taking 
existing funds and moving them into this new method.
    Do you want to add anything, Tom?
    Mr. Skelly. I would just add the one technicality was that 
the TEACH grant program is one where if students don't persist 
in teaching, that the grant becomes a loan. And under the 
Credit Reform Act, loans sometimes have savings to the Federal 
Government. So, for example, in 2010, there was a $153,000 
downward adjustment to the cost of the program. If you take 
into account that downward sort of adjustment, the receipts 
that we get under the Credit Reform Act, the cost of the new 
program is about the same as the cost of the existing TEACH 
grant program.
    Mrs. Lummis. It would be helpful if you could put something 
in writing that explains that to me. I didn't quite--that 
didn't quite connect with me when I read this. And in spite of 
the merits of that proposal and the goals of it, why is that 
not a State function? Why is that a Federal function?
    [The information follows:]

                  Costs Under the Teach Grant Program

    The TEACH program awards annual ``grants'' of up to $4,000 
to eligible undergraduate and graduate students who agree to 
serve as a full-time mathematics, science, foreign language, 
bilingual education, special education, or reading teacher at a 
high-need school for not less than 4 years within 8 years of 
graduation. For students who fail to fulfill this service 
requirement, grants are converted to Direct Unsubsidized 
Stafford Loans with interest accrued from the date the grants 
were awarded. It is currently estimated up to 75 percent of 
recipients will not complete their service requirement, and 
thus see their grants converted to loans.
    Because of this provision--where grants are converted to 
loans--TEACH is operated as a loan program and uses the rules 
established in the Credit Reform Act of 1990. Budget authority 
reflects the estimated net present value of all future non-
administrative Federal costs associated with awards made in a 
given fiscal year. The estimated costs of outstanding loans are 
evaluated annually, through the re-estimate process, to reflect 
updated assumptions and actual experience. The total change in 
costs for all outstanding loans in the TEACH program at the end 
of FY2010 is depicted in the 2011 re-estimate. The net re-
estimate (the aggregate of the upward and downward adjustments) 
is $5.5 million. This means the estimated Federal cost of prior 
loan cohorts (2008 through 2010) is now lower by $5.5 million.

    Ms. Kanter. Well, the idea is to use precious Federal 
resources to identify models of high-performing programs. So we 
are giving money to States to do the rewards for designating 
the excellent performers, but it takes existing funds and we 
think uses them far more effectively and efficiently.
    Mrs. Lummis. More effectively and efficiently than State 
funds or than just the way the Federal funds are being----
    Ms. Kanter. No, no, no. The existing funds. In other words, 
we are spending a lot of time reforming the existing Federal 
dollars that we have to be put toward performance-oriented 
programs like you see in the TEACH grant. That is what we are 
trying to do, is take existing funds and use them in better 
ways.
    Mrs. Lummis. I am looking at the fact that your budget 
increase request is 12 percent, and it is actually even a 34 
percent increase if you don't get the authorizing committee 
changes that are proposed. That is a whopping increase at a 
time when we are spending money we don't have. So I am just 
curious about why the emphasis on spending more at the Federal 
level when education is really a State responsibility.
    Ms. Kanter. Well, we see it as a partnership between 
States, local institutions and K-12 schools and the Federal 
Government. So this is our portion, our effort to really 
incentivize excellence, to reward the high performers and to 
invest in education, as the President has said, so that we can 
really create the kind of American prosperity and security that 
we all want for this country.
    Mr. Rehberg. Ms. Roybal-Allard.
    We are completing our first round, so you came in under the 
wire.

                INCOME-BASED REPAYMENT PROGRAM OUTREACH

    Ms. Roybal-Allard. Well, I apologize for being late, but I 
had another hearing at the same time. I would like to talk a 
little bit about the income-based repayment program, which was 
created to ensure that students who invest in their college 
education do not find themselves in insurmountable debt. And 
since last fall, only 200,000 students have enrolled in the 
program. Since we know that there are millions of students that 
can benefit from this affordable loan payment, what is the 
department doing to reach out to borrowers to increase 
participation?
    Ms. Kanter. Well, we have a number of outreach efforts, not 
only through Federal student aid, and you will see us 
displaying a lot of information about the income-based 
repayment plan on our Federal aid Web site. But as I mentioned 
before, the college access challenge grants are given to every 
State to really do the kind of outreach for students, not only 
who are coming up into the pipeline of college but who are in 
the college pipeline. So our largest program, TRIO, is focusing 
on students who are in college and ways to help them over the 4 
years to however long that they are in if they are a part-time 
student get the education they need and use the availability of 
the income-based repayment (IBR) to plan their future. Whether 
they are going to finish college or go on to graduate school, 
the IBR is available to them.
    So we have to do a lot more outreach. We have a lot of 
plans under way in Federal aid to continue to do that. And 
frankly, the outreach happens at the institutions. The outreach 
happens because the Federal aid staff are reaching out to 
students when they are converting. We have servicers, many 
contractors, private contractors that we are using to actually 
provide guarantees on the back end and do the education of 
students who are actually taking loans, they are consolidating 
loans, they are figuring out how to pay for college. And so, in 
those programs, we are incentivizing those contractors to make 
sure that IBR is something that they can discuss with students 
on the back end.
    Ms. Roybal-Allard. And if you have the written information, 
don't forget Members of Congress. We are out there talking to 
students, going to our universities and our schools, and we 
could also be a resource and be able to distribute some of that 
information as well.
    Ms. Kanter. We would be glad to get that information to 
you.

                           SECOND PELL GRANT

    Ms. Roybal-Allard. I would like to ask you another 
question. I know that you have already touched on the year-
round program, but the popularity of this program indicates it 
is filling a real need, especially among older and 
nontraditional students who are trying to complete their degree 
faster.
    And the Administration has said that the year-round Pell 
program has not accelerated graduation rates. And it seems to 
me that this evaluation is really premature given that the 
program has been in place for only 18 months. Last week 
Secretary Arne Duncan told this committee that there were about 
2 million jobs waiting for skilled American workers to fill 
them. And wouldn't it serve our economy better to encourage 
students to finish their degrees than to enter the work force 
as soon as possible?
    Ms. Kanter. This is an example of where we had to make a 
really tough choice. And because the cost escalated so much and 
because we knew that part-time students could continue their 
education in the summer, we chose to propose that the reduction 
in the summer Pell, suspending it or eliminating it at this 
point, is a choice that we had to make. It would be fantastic 
if we could continue it, but we just didn't feel we could 
afford it. Our highest priority was to maintain the $5,550 
maximum award for students and to help the full-time students, 
who wouldn't have a second Pell, be able to continue their 
education if they decided to go to summer school. We did only 
find a 1 percent increase in summer school enrollment. So that 
was also part of our consideration.
    Ms. Roybal-Allard. Okay. So if this program is being 
eliminated; have you explored other options to help students 
who are making good-faith efforts to graduate ahead of schedule 
and to accelerate their studies? Are there other avenues that 
you are looking at?

                 EFFORTS TO INCREASE COLLEGE COMPLETION

    Ms. Kanter. The two proposals that we have made for the 
College Completion Incentive Grants to States on the one hand 
and reforming of the FIPSE program, and on the other hand, to 
give money directly to institutions to accelerate degree 
completion and increase productivity; those are sort of the two 
centerpieces of that fund, would actually be producing higher 
levels of completion, which means they would have reforms in 
place to do better outreach internally for existing students to 
keep them on track. We looked, and we are going to be issuing 
some information to you hopefully very soon, on college 
completion strategies that we have studied across the country.
    But I was saying earlier, Texas went after every student 
that went to college but didn't finish their degree, had an 
outreach plan for every institution of higher education over 
several years, and actually, half of the students returned and 
graduated. So it is models like that that we have looked at 
across the country to see what can we do with a small amount of 
incentive funding to actually increase those completion rates.
    Mr. Rehberg. Thank you.

                       STIMULUS SPENDING FOR PELL

    It is no secret in this committee that I am particularly 
critical of the stimulus because it didn't stimulate the 
economy, which is what it was intended to do. That is what it 
was advertised as. It was going to be timely. It was going to 
be targeted, and it was going to be temporary. And one of the 
temporary issues, even though I think that many of the things 
that money was spent on the stimulus are good programs, good 
social programs and are worthy of our consideration in the 
Appropriations Committee for spending, it didn't stimulate the 
economy. It was spending, not building an asset for the 
immediate jump starting of the economy.
    Your area is one of those areas, because while I can 
justify perhaps backfilling money to fulfill a shortfall in 
Pell funding because of unanticipated costs because of new 
eligible students, the difficulty is in my mind that then 
somehow this becomes permanent. What kind of a policy decision 
was made within the Department to suggest that $619 increase in 
Pell Grants as a result of the stimulus dollars would then 
become the de facto base to be built then into an ongoing grant 
expenditure, thereby exacerbating our problem of trying to find 
a way to pay for it? Because two other programs I support--
Title I and IDEA--were specifically told, don't make this 
permanent. IDEA was specifically told, don't make this 
permanent; spend it on things that are a one-time expenditure. 
But somehow, in the Pell Grants, we made a determination that 
the new base as a result of the stimulus becomes the new de 
facto maximum grant.
    Ms. Kanter. I think in general our goal is to educate as 
many students as we can so that they can get the jobs and, as I 
mentioned, they will earn 40 percent more if they graduate from 
college. So it was a stimulus going forward to actually have 
the Pell Grant keep pace with inflation and move the country 
forward in the larger sense.
    Mr. Rehberg. So, in fact, then, it was not temporary. It 
became then in the minds and the eyes of the Administration the 
new de facto base?
    Mr. Skelly. It also became the base in the appropriations 
statute that the Appropriations Committee each year sets as the 
maximum level for discretionary funding.
    Mr. Rehberg. The last Congress, the last majority.
    Mr. Skelly. The only Congress we had last year.
    Mr. Rehberg. Which also made the promise that this was 
temporary; it was going to be stimulative; the economy was 
going to turn around. And again, where are the jobs? So it was 
spending and not stimulative.
    And then the Administration made the determination it is 
more important to increase the base in Pell than continue the 
ongoing expense of the same temporary spending for IDEA in 
Title I. So you have decided that college kids are more 
important than our disabled and our low-income Title I 
students, is that correct?
    Ms. Kanter. I don't think so. I think we look at every 
program and what we need for the country, so that when I look 
at the people who are 23 years and older who are earning less 
than $30,000, who receive Pell Grants, 84 percent have less 
than an annual income of $30,000, that $619 means that they 
could take one to three classes. That is what it translates 
down to, or it means $619. When I was a community college 
president, it was $400 for the people to become emergency 
medical technicians, paramedics.
    Mr. Rehberg. Which then, unfortunately, creates an 
additional problem for us because of the higher grant level and 
the changes in eligibility.
    And going back to Ms. DeLauro's comment about one of the 
problems is the higher number of eligible students, we are 
probably, if we do not get the authorization legislation 
through, going to have to come up with an additional $20 
billion that can't be spent then on Title I and IDEA. We have 
created a problem where we are pitting groups against each 
other.
    And it doesn't seem fair at a time where that was the 
second highest increase, I think in the history of Pell, a one-
time shot. I think the last one was back in the 1970s when I 
might have been able to take advantage of the Pell. It was the 
second highest level. It became the new floor. And 
unfortunately, then it is pitting group against group within 
the Labor/HHS/ED budget. And somehow we are going to have to 
come up with an additional $20 billion because of our desire to 
use temporary money to then create a new floor.

                   PELL GRANT PROTECTION ACT PROPOSAL

    Ms. Kanter. Well, as I said in my remarks, we have prepared 
a set of solutions that when taken together would close the $20 
billion shortfall and allow us to fund the Pell program; you 
know, the direct lending, putting that in place saved the 
government--$6.8 billion a year going forward. This set of 
solutions, suspending the second Pell Grant and the other 
proposals that we are making in the Pell Grant Protection Act, 
would actually cover that $20 billion shortfall and not affect 
the lives of more than 9 million people to not be able to 
continue their education and get into the workforce to become 
taxpayers.
    I mean, that is our dream; that we can get every American 
getting as much education as they can to be able to get into 
the economy and move the country forward.
    Mr. Rehberg. Ms. DeLauro. 
    Ms. DeLauro. Thank you, Mr. Chairman.
    Let me also, Mr. Chairman, welcome, a number of students 
who are in the audience here. I think they may be Pell Grant 
recipients and probably SEOG recipients, et cetera, and are 
counting on, are truly as they should, counting on the 
opportunity to be able to access funds in order to be able to 
complete their education so that in fact they are not 
unemployed and have to collect an unemployment check, but 
rather that they can go to school, they can get a degree, and 
they become, you know, a taxpayer. So listen carefully to the 
debate, listen very carefully, I might add, to know where your 
fate lies in this instance.

                           ECONOMIC STIMULUS

    Let me also just say in terms of the $619 increase, there 
is a question of stimulus; what stimulates the economy? Getting 
kids and older adults to school so that they can make a living, 
spend the money and continue that multiplier effect that access 
to education has. It is extraordinarily stimulative. If you 
talk to any economist about what stimulates the economy, it 
isn't the tax cuts for the richest 2 percent of the people in 
this Nation that stimulates the economy--and those who have 
constructed these cuts in these various areas are the same 
group of people who would like to see those tax cuts continued 
permanently. And what do people at that level do with their 
money? They take it and they put it in the bank and they 
collect interest on it, rather than allowing young people to be 
able to go to school to take that $619 and to be able to 
usefully apply it to their future education, and it stimulates 
everything after that.

                     IMPACT OF H.R. 1 ON EDUCATION

    I will just make one more comment. If we are talking about 
education and pitting groups against one another, just take a 
look at H.R. 1 with the full-scale assault on education. As to 
whether or not it is preschool and Head Start, special ed, 
whether it is K-through-12 education or whether it is higher 
education, we seem to be dealing with planned obsolescence 
coming out of H.R. 1 and what the future of education is in 
this Nation. And it is only a goal in recent years that 
education for middle class families like the one that I came 
from have an opportunity to send their kids to school so that 
they can realize their dreams and aspirations and, yes, become 
economically viable.

                SAFEGUARDS TO PREVENT STUDENT AID ABUSE

    Let me move to the issue of strengthening the rules and the 
safeguards to keep proprietary schools from abusing student aid 
programs with their students. Can you provide us with an update 
on those efforts and what you are trying to accomplish with 
them?
    I am going to deal with a follow-up as well so you have a 
chance to answer it. H.R. 1, passed by the House last month, 
includes a rider that would prohibit the Department from 
finalizing the rules it is still working on and from 
implementing some of the rules it has completed.
    What precisely would that rider prevent you from doing? Am 
I correct that it would completely shut down all efforts to 
establish a process for excluding from Pell Grants and other 
student aid those institutions with the worst records in terms 
of loan repayment rates and debt-to-income ratios? Not only 
could you not implement the rule you are working on, but you 
couldn't develop or propose alternative rules on the subject?
    I don't know if I am correct that the rider would prevent 
the Department from enforcing a new rule that requires certain 
schools to give prospective students information on tuition 
charges, completion and placement rates, median levels of 
student debt for the program the student is considering 
entering. I always thought disclosure would be something that 
we would all want to see in these areas. We need to deal with 
reducing fraud and abuse in Federal programs, which is part of 
the content of this hearing. And wouldn't I be right in saying 
that the Department is trying to do this in the area of student 
aid and proprietary colleges? Yet the majority responds with a 
rider to shut down these efforts.
    Ms. Kanter. Our priority in proposing the gainful 
employment rule is doing the right thing for students and 
taxpayers. Consumer protection is driving our rulemaking. The 
current law includes the gainful employment provision, which 
has never been defined. We are now defining this provision so 
that students and taxpayers would have a minimum standard of 
expectation, especially in these difficult economic times. You 
will see us already publishing the 3-year default rate and the 
graduation rates. And if you go out to the Federal aid website 
and you are a student and you want to go to different colleges, 
you can, in the interest of open government and transparency, 
you can put in the school you want to go to and see how much it 
cost, what the graduation rates are, what the default rates are 
and so forth. So there is a whole list of information about 
every single institution that is helpful.
    It is unacceptable, we believe, to burden students with a 
debt that they can't afford in exchange for degrees that they 
won't be able to use in the labor market. That is the sort of 
principle. It is especially problematic when we impose this 
kind of burden on low-income students who overwhelmingly have 
taken part in these programs and can least afford the debt.
    We have received over 90,000 comments. We have read every 
single comment. We have listened very carefully. And we think 
when we propose the rule, we will have incorporated the 
meaningful feedback and the improvements from all people that 
we have heard from, and it has been many. We think we are 
proposing a reasonable rule, and we look forward to that.
    Ms. DeLauro. So we need your rule in order to cut back on 
waste, fraud and abuse in this system.
    Thank you.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. Thank you.
    And I apologize. There are three hearings going on at the 
same time, maybe more.
    And I appreciate your appearing before our committee.

                            IMPACT OF H.R. 1

    Let me make it clear that in my view the deeply flawed 
House-passed 7-month continuing resolution would slash Pell 
Grants by more than $3,000,000,000, which would cause more than 
9 million students to face a reduction in the amount of 
assistance they receive. I am very pleased that the 
administration proposed to increase funding for Pell. This is a 
perfect example of contrasting priorities.
    While one side is seeking to slash the most important 
student financial aid program, the other is prioritizing 
initiatives to further educate students.
    Now, I want to also make it very clear, we all agree on the 
need for fiscal restraint, but we cannot win the next century 
by slashing the programs that matter most. I am particularly 
concerned of the impact of reducing Pell when the cost of a 
college education keeps going up. Tuition at 4-year public 
schools has risen 40 percent since 2001. Borrowers typically 
graduate with more than $17,500 in debt. So the students and 
families in my district and throughout the country desperately 
need help.
    So if you could share with us whether the Department of 
Education has an estimate on the number of Pell recipients who 
could not attend college without financial aid?
    Ms. Kanter. Our numbers are, if this H.R. 1 were to go 
through, that 10,000 students would be shut out completely. But 
all 9-plus million students would be dramatically affected. And 
our concern is, as I said in the beginning, if nothing is done, 
next year all of the Pell Grants would be cut in half. I did 
look State by State at each one of your States and each one of 
your districts to see how many thousands of students would be 
affected. We hope that you will consider this in a conversation 
with the other committees, so that we can come to a solution 
that would make sense.
    In terms of tuition rising, the number one driver is the 
stagnation of State funding for higher education. So what we 
hope to do is really incentivize States and use our Federal 
funding wisely to bring back support in States for higher 
education and K-12. The demand for public and private post-
secondary education is at an all-time high, as I said. And I 
talked about higher graduation rates and higher employment 
rates once students come out. And we need those students in 
Pell. We have got 49 percent of students are Caucasian, as I 
said, and 45 percent are Hispanic or black. So we have got 
driving huge numbers of students who are going to be the future 
of California receiving those Pell Grants, and we want to do, 
as we said before, more outreach and more support so that we 
can have those graduates reflect the country's population going 
forward.
    Mrs. Lowey. I really appreciate your comments.
    And Mr. Chairman, I do hope we can work in a bipartisan way 
to resolve this. I know I have visited a school like 
Westchester Community College. Many of these kids are first 
generation going to school. And if they get less than $845, 
that can make the difference for them.
    And what was interesting to me at both Westchester 
Community or Manhattanville College or many--I have many 
colleges in the district--these kids are working two or three 
jobs. They are just struggling.
    And I remember talking to Joe Hankin at Westchester 
Community College, they can't even pay for the books. So 
getting them books, helping them pay tuition. They can't go 
back and say, hey mom, hey dad, can you help me?
    So I thank you, Mr. Chairman, for giving me some time. And 
I do look forward to working together on a budget that cuts out 
unnecessary spending. I think we all want to do that. But we 
have got to help our young people get that education they need 
and go to college. I worry that, because they are all working, 
they don't even have enough time to study.
    So, thank you, Mr. Chairman.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.

           COLLEGE COMPLETION RATE FOR PELL GRANT RECIPIENTS

    Sort of continuing along the lines of that discussion, an 
adjunct question about Pell Grants. Do you have any data 
demonstrating that college completion rates for Pell Grant 
recipients have increased as Pell Grants have increased?
    Ms. Kanter. Nationally we have been stagnant, as Secretary 
Duncan has said, for decades. So, right now, about half of the 
students who are enrolled are graduating from college. And for 
Pell Grants, it is close to that. Pell-eligible students are in 
college somewhere around 45 percent, rather than 50 percent, so 
that we don't have this huge gap. The country itself, all of 
our higher education institutions, in partnership with States, 
in partnership with the Federal Government, have got to 
increase college completion while continuing to maintain 
quality. We want students to get a first-class education. 
Everyone in this room, more than everyone in this room, is 
probably getting or got a first-class education, and we want 
those students to have that available to them.
    Now, I mean, what is difficult is that college completion 
has remained stagnant, and we have got to find those incentives 
that are going to get us the result that we want.
    Mrs. Lummis. And I have an adjunct question there, since 
you brought up that point. Have you looked at alternative ways 
to incentivize college completion for Pell Grant recipients 
besides the amount of the grant?

                     COLLEGE COMPLETION INCENTIVES

    Ms. Kanter. Yes. We have two proposals that would be paid 
for within the Pell Grant Protection Act. As I mentioned 
before, I don't want to be repetitive, but one is the College 
Completion Incentive Grants that would be given to States to 
give to institutions that are high performers in terms of 
completion and have the productivity results and the 
innovation, which is what we want, to drive more students to 
completion and jobs.
    The other grant fund is called First in the World; we can 
get you more information on that. But those are grants directly 
that would be competitive nationally directly to colleges and 
universities to showcase what they can do to increase 
dramatically the number of students getting a college degree at 
a 2-year or 4-year institution.
    Mr. Rehberg. Will the gentlewoman yield for a moment?
    Mrs. Lummis. Yes, Mr. Chairman.
    Mr. Rehberg. The point was made earlier, while that is 
interesting, those two new programs, money going to the States 
and the colleges, it is paying colleges to do what they are 
supposed to be doing already. I think your question was, is 
there incentives for the individual to finish their college 
degree, as opposed to paying colleges more money to do what 
they are supposed to be doing in the first place?
    Mrs. Lummis. A great point, Mr. Chairman.
    I am curious about whether there are nonfinancial 
incentives, mostly out of my concern that since we are spending 
money we don't have, we have to be more creative than we used 
to be, instead of just trying to use financial incentives. It 
seems to me that when you don't have any money, you find other 
means than money to incentivize. And so that was really the 
nature of my question.
    Ms. Kanter. I mean, we have some programs in place that 
include mentoring and tutoring. The TRIO program is a great 
example, or GEAR UP for younger people to be able to stay on 
track to actually get into college. So those are programs where 
students are getting mentors. They are working in communities. 
We have got a lot of those incentives.
    But financial reasons are the greatest hardship and the 
greatest reason why students leave college. And so we know that 
the Pell Grant has been an incentive to keep them in and keep 
them moving toward their degrees.
    Mrs. Lummis. Do we know if TRIO participants have a higher 
graduation rate than non-TRIO?
    Ms. Kanter. I don't have that research, but I would have to 
come back to you with that information.
    [The information follows:]

            Studies Showing the Results of the Trio Programs

    Numerous studies have been performed examining the outcomes of TRIO 
program participants. These studies have shown a consistent association 
between participation in TRIO programs and improved outcomes for these 
participants. For instance, a January 2009 study of a random sample of 
Upward Bound participants found while Upward Bound had no detectable 
effect on the rate of overall postsecondary enrollment, the type of 
postsecondary institution attended, or the likelihood of earning a 
bachelor's or associate's degree, it did increase the likelihood of 
earning a postsecondary certificate or license. Additionally, it showed 
the longer a student participated in the program the more likely they 
were to enroll in and graduate from a postsecondary institution. This 
applied particularly to certain subgroups of students, including those 
who did not expect to complete a bachelor's degree program. Upward 
Bound was able to increase the rate of postsecondary enrollment by 6% 
and completion by 12 percent. A separate study, released in February 
2009, studied Upward Bound Math-Science program, and found an 
association between students that participated and an increase in 
enrollment in more selective four-year institutions, and in degree 
completion overall.
    Studies examining other programs within TRIO have found similar 
results. For instance, a study released just this month showed, when 
measured with analytic models that account for differences in the level 
of services and type of supplemental services offered to students, 
positive and statistically significant impacts on persistence in higher 
education and degree completion were produced by the Student Support 
Services program. Finally, in the Ronald E. McNair Postbaccalaureate 
Achievement program, a study from March 2008 displayed for every 100 
participants, 98 completed a bachelor's degree program, 44 received an 
M.A. as their highest degree, 14.4 earned a doctorate, and 12.1 earned 
their first professional degree.

                  FEDERAL EDUCATION BUDGET PRIORITIES

    Mrs. Lummis. Another question if I might, Mr. Chairman.
    Does the Department of Education prioritize within the 
Department of Education budget on expenditures? You know, my 
personal bias at the Federal level is for higher-ed spending 
than for K-through-12 because I see K-through-12 spending as 
being a State responsibility. Do you make those kinds of 
determinations, whether they are different from my conclusions? 
Do you make those kinds of judgment calls within the 
Department?
    Ms. Kanter. We have gone through every single program, 
which ones we can reform, which ones we have eliminated, 
proposing consolidating 38 programs. We have made some really 
tough decisions to suspend the second Pell Grant. We have the 
financials behind each one of those decisions that we can share 
with you at a later time if you would like to see the process 
we are going through.
    But somebody said, everything is on the table. And for us, 
we are scrutinizing program by program, can we get more out of 
it? Someone said, can you get more orange juice out of the 
orange? And so how much productivity can we get? How much do we 
have to invest? I think the overall message is invest in 
education and make the cuts that we have to make that we wish 
we didn't to move things forward.
    Mrs. Lummis. Thank you, Dr. Kanter.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Ms. Lee.
    Ms. Lee. Thank you very much.

              MINORITY ACCESS AND OUTREACH TO PELL GRANTS

    Following up on what I had asked with regard to low-income 
students, minority students, applying for Pell Grants, looking 
at this ``Apply to Succeed'' by the Advisory Committee on 
Student Financial Assistance, one point they made is that it 
says the problem is disadvantaged students often do not use the 
Web, especially of the Latino population having difficulty with 
the Web, and that is a growing population. There is still a 
digital divide, I know, in communities of color. And are Pell 
Grant applications, are they only Web-based, or can people 
apply for them in a variety of ways?
    Ms. Kanter. You can fill out a paper copy. It is really 
much easier to facilitate Web-enabled delivery. But that is 
available. Federal student aid offices, I ran one for 16 years 
as a community college president, it was open all the time. So 
students who couldn't get into the Web, they had the Web right 
there, so they could help the students get that assistance.
    But frankly, we need a lot more outreach, and so the GEAR 
UP program has been one where we have actually demonstrated--
Secretary Arne Duncan and I went to one of the high schools 
here to look at how Web-enabled were they and how many students 
could actually get in and understand that this was going to 
apply.
    One of the things we have done is in the Web-enabled FAFSA, 
we have not only cut out many questions that the government 
already had the information for, but we also made it easier to 
port in, in our relationship with Social Security and the 
Treasury and the IRS, tax information from the prior year. So 
we are trying to simplify what is done. We are actually going 
to have a pilot where we are looking at a really limited number 
of questions. You know, how to make it really easy for students 
to get that application finished, and that is a high priority 
for us.

                        PROPRIETARY INSTITUTIONS

    Ms. Lee. Let me ask you about these proprietary 
institutions, because oftentimes they paint very rosy pictures 
as relates to training in the culinary arts, health sciences, 
technology. Oftentimes, though, they promise employment after 
graduation or certification, but what we found, and I think you 
know this, is that, in many instances, students are securing 
Pell Grants and loans without even obtaining a degree or 
certificate, that sometimes they are very misleading in terms 
of the types of programs leading to a job, finding now that 
many for-profit institutions, I think it has grown by 160 
percent in the past, but only 10 percent of students consume 25 
percent of Pell Grants and 21 percent of all Federal loan 
dollars.
    So what is going on with these proprietary institutions, 
also for the for-profit institutions, given that their 
graduation rate--what is it 20 percent for a bachelor's degree 
and 60 percent for programs of 2 years or less and 40 percent 
of these loans go into default--so can you kind of give us an 
understanding of what is taking place with the for-profit 
institutions, the proprietary institutions and Pell Grants and 
students getting a job at the end of the program?
    Ms. Kanter. Well, I think when you look at the entire 
sector of higher education, for-profits are educating about 10 
percent of students in higher education. We have 6,000 
institutions across the country. They have dramatically grown 
over the last decade. They specifically have had a spike in the 
number of 4-year baccalaureate programs. That has grown 
dramatically. And our agenda is to do the right thing for 
students and for taxpayers.
    So we are proposing a gainful employment rule to define a 
provision so that we would have a minimum standard of 
expectation that, on the one hand, would serve over time to 
reduce the high default rates and, on the other hand, like we 
are doing for all of higher education, increase the number of 
graduates that are getting through with high quality programs. 
So that is pretty much all I would say.
    Ms. Lee. Do you require these programs to have a 
correlation or a match with, say, Department of Labor 
statistics showing which sectors are employing people or can 
they provide any type of training they so desire just to get 
the money in?
    Ms. Kanter. Well, I think all of higher education is 
providing programs to meet the needs of industry. So we look at 
health care, we look at the IT sector, or we look at any number 
of fast-growing sectors, bioscience, you know, half of all new 
jobs will require some or more postsecondary education. We will 
have program data to show how these programs are doing. And it 
is helpful that over time, those programs will be targeting the 
high-performing students that will be graduating and getting 
the jobs that are available, but we have a lot more to do on 
the basis of protecting taxpayers and students from waste, 
fraud and abuse.
    Mr. Rehberg. Mr. Kingston.
    Mr. Kingston. Thank you, Mr. Chairman.

                 IMPACT OF PELL GRANTS ON COLLEGE COSTS

    Madam Under Secretary, one of the things that I have seen 
as the son of a college professor raised or reared in Athens, 
Georgia, that when the HOPE scholarship came along, there was a 
lot of tuition inflation. And it was a great thing for those 
students that had the HOPE scholarship, but for those who did 
not, their tuition went up, and universities in general spend 
more money. And I was wondering if you studied that effect in 
terms of Pell scholarships on campuses where a substantial 
portion of the student population is on Pell?
    Ms. Kanter. I gave a little while before you came a 
description of the cost of tuition, and I cited a study from 
the College Board that showed there was no correlation between 
the Pell Grant and college tuition. I can tell you that I think 
a lot of confusion is because of the sticker price of college. 
And I will just use another example. I used private before. I 
will use public 4-year institutions this time. The sticker 
price is $7,610. The net with the Pell Grant is $1,540. Room 
and board is $8,540. The total net is $10,080. So, you know, we 
have a big escalation; people talk about a cost of college 
being $50,000 a year. That really is not the case. When you 
remove the sticker price, you look at the Federal and State aid 
and then you look at also the opportunity for many of the 
students who receive Pell to have work study as well to help 
offset.
    One of the biggest factors is the growth in the price of 
books. I know this from my personal experience. I was mentoring 
a student. I always mentored a student when I was college 
president, and one student didn't come back, and it was because 
he couldn't afford the books. He was too ashamed to tell me. So 
we have a whole spectrum of cost of college, and we don't see 
any correlation. We know that there are some other studies 
maybe done some years back. And I was asked a question, is 
there a more recent study? And we will try to ask the experts 
to get as many of the recent studies as we can to look at the 
effect.
    Mr. Kingston. How old was your study?
    Ms. Kanter. This study was in 2001, and it was done by 
NCES, the National Center for Education Statistics. It was a 
large Federal study.

                 FREE APPLICATION FOR STUDENT AND FORM

    Mr. Kingston. I want to get to Ms. Lee's question a little 
bit in terms of the student forms. I know that you are--I 
believe you are looking at making changes to the Free 
Application For Student Aid Form. What are you doing to that?
    Ms. Kanter. My dream is no form at all. My dream is, could 
we do for everyone in this country what we do for people who 
receive Social Security? You qualify or you don't. So that is 
kind of driving the philosophy. We want to simplify the Pell 
form. We want to simplify the access for students. Technology 
is a digital divide still in this country. That is why the 
broadband going to the rural areas in the country, I have been 
at a lot of broadband meetings about 6 months to a year ago to 
see, can we get this technology to everyone? Can we get the 
application available that is easy to fill out?
    In the first year, we cut half the questions, almost half 
the questions, out of the form. We already had the information 
reporting over with the IRS prior-year tax information to help, 
again, further simplify. We want to make it easier for students 
to get in. And then the focus there is, once they are in, we 
want them to finish.
    Mr. Kingston. I am not sure that philosophy is something I 
would accept and embrace readily. I am not sure it is wrong 
either. But I do like the idea that you have to do something to 
earn somebody else's hard-earned tax dollars going for your 
tuition. And filling out an application isn't that bad.
    But my interest in it is, I can't stand some of these 
repetitive questions on applications, and I think they can be 
very helpful. But I think there is a certain amount of 
screening that, you know, listen, you are getting a tax, 
somebody else's hard-earned tax dollars paying your way to go 
to college, and filling out a form isn't that bad. It kind of 
removes some sense of entitlement on it.
    But will it save some money doing this, save some 
administrative costs.
    Ms. Kanter. We have an income verification program that we 
have proposed as one of our parts of the Pell Grant Protection 
Act, so that we would be there doing a much better job in 
verifying eligibility using the technology that is available to 
us with the IRS to identify people that qualify and people who 
don't. So there are cost savings there.
    Mr. Skelly. Several hundred million dollars. We do have 
some overpayments and underpayments actually in the Pell Grant 
program. By allowing students to pre-populate their form with 
IRS information, we think it will actually save us quite a bit 
of money.
    Mr. Kingston. Thank you.
    I yield back.
    Mr. Rehberg. Thank you.
    Ms. Roybal-Allard.

                         YEAR-ROUND PELL GRANTS

    Ms. Roybal-Allard. I just want to go back for just one 
second to the year-round Pell Grants and just make one point, 
because it is very difficult for me to understand how the 
elimination of this program is really going to make a 
difference to the bottom line, because you mention that the 
cost of the program escalated at a greater rate than had been 
expected. And while I understand that cost is a concern, the 
fact is that, as I understand it, all students are restricted 
to a total number of nine, restricted to nine total number of 
Pell Grants. So, over the course of the student's education, 
the cost remains the same. I mean, it becomes neutral.
    So given the importance and the number of people that want 
to expedite their education, the importance of getting people 
into the workforce that are educated that can take jobs, it 
just doesn't make sense that this program is being eliminated.
    But let me just go on to, first of all, to associate myself 
with the comments that have been made by my Democratic 
colleagues about the importance of Pell Grants and how they 
truly are the cornerstone of financial aid that make college 
available and the completion of college a reality for so many 
students, in the millions.
    And again, I think we also need to look at the broader 
picture. This isn't just about students being able to fulfill 
their dream; this is also about the future of our country. 
Expert after expert, economists are telling us, and we know 
that we fall far behind the rest of the world in STEM programs, 
that we don't have enough engineers. Businesses are telling us 
that we need to graduate more people. They are asking us to 
bring in foreign students to take high-paying American jobs 
because they can't find Americans who have the qualifications 
and can fill those jobs.

                     HISPANIC SERVING INSTITUTIONS

    So the last place we should be looking to cut would be in 
education, which brings me to H.R. 1 and the $100,000,000 
proposed cuts in funding to Hispanic institutions. Now, this 
money is used again to enhance the academic quality and fiscal 
stability of these institutions, which are already underfunded. 
And this is a very important component of our efforts to 
increase access and improve academic outcomes for our Nation's 
largest minority, the Hispanic community.
    So like Pell Grants and other Federal financial aid 
programs, these universities are important to giving that 
access to college for minority students. So, in your opinion, 
what impact will this $100,000,000 cut to Hispanic-serving 
institutions have on students?
    Ms. Kanter. Well, I actually did some research on the 
growth of Hispanic-serving institutions in the Nation. And I 
went back to in the year 2000, we had 230 institutions; in 
2008, we had 281; and we have 176 emerging Hispanic-serving 
institutions on the horizon. So I did a quick calculation; it 
has been a 22 percent increase since 2000 in the number of 
institutions that are serving predominantly Hispanic students. 
So it is the fastest-growing population in the country.
    These grant funds, obviously, are directed to college 
completion, ways that we can get students into the pipeline and 
actually using those grant funds to showcase what works so that 
as these predominantly Hispanic-serving institutions become 
fully Hispanic-serving institutions, they can apply those 
strategies and ways to increase student success.
    I mean, it is all about, how can we have these fast-growing 
populations be the leaders in the future as we go forward in 
this country? And what can we do now with Pell Grants, with 
college completion, with these access grants and success grants 
to really allow that to happen? So this is about innovation. 
And I think my first remark was, we have got to out-educate to 
out-innovate to really out-build so the Nation will be strong 
going forward. And it really is about our economic prosperity 
and our national security.
    Mr. Rehberg. I think we probably have time for one more 
round, if that is okay with the committee. Those of you that 
want to stick around, I will stay here until everybody has had 
an opportunity.

                            REMEDIAL COURSES

    I sometimes suggest that I made the top half of the class 
possible. If it hadn't been for me, there would have been no 
top half. So I know what bonehead math is.
    Ms. Kanter. You graduated.
    Mr. Rehberg. I did graduate. I know what bonehead math is 
in college. They have now come up with the term remedial, 
because I took it, it was 001. Can you get a Pell Grant for 
remedial coursework in college?
    Ms. Kanter. Yes, you can. And what is very exciting is we 
see a lot of innovation in the country. I will point to CUNY, 
the City University of New York, just established a new 
community college. It is focused on having students go full 
time and do their remedial in an accelerated amount of time to 
get a jump start. Now, we know many students can't go full 
time.
    Mr. Rehberg. How many do you think, what is the percentage 
in the number of students that are taking a remedial course 
under a Pell Grant?
    Ms. Kanter. Well, nationally we have got about 40 percent 
of students come into higher education needing one or more 
remedial courses. It is mostly math or English and some 
science, and that is what they need. So Pell Grants are 
comparable. It is not predominantly more. It is about the same 
number. Students are lower-income. They might have gone to not 
as good schools as students coming from high-performing middle 
class communities. We have got to take that into account.
    But frankly, what we want is all students to get their 
remediation done as quickly as possible. We have a lot of 
partnerships with K-12. It starts in early learning, frankly; 
30 percent of children aren't ready for kindergarten.

          COLLEGE COMPLETION AND GAINFUL EMPLOYMENT STANDARDS

    Mr. Rehberg. Let me ask you a question, and I spoke on the 
House floor about the gainful employment issue. If this were 
applied university-wide, not just for proprietary schools, 
would the administration support legislation that suggests the 
same standards of gainful employment for all universities, not 
just proprietary?
    Ms. Kanter. Some elements we have already done for all 
institutions. We are actually publishing graduation rates and 
default rates.
    Mr. Rehberg. I am suggesting anything that is applied to a 
proprietary school is applied to every other school equally. 
There is no difference between a proprietary and a 
nonproprietary school in my mind. If we truly want to solve the 
issue of gainful employment, it needs to be across the board. 
We can't pick and choose segments of our society who we want to 
apply the standard of gainful employment to without applying it 
across the board. So the Administration would support that kind 
of legislation?
    Ms. Kanter. No.
    Mr. Rehberg. Across the board.
    Ms. Kanter. No, we would not.
    Mr. Rehberg. Why not?
    Ms. Kanter. I think we need more study, obviously, about 
this. But there are differences in the foundation of why these 
schools were created.
    Mr. Rehberg. But the problem is if they are not turning out 
the kind of student we are asking them to turn out; somehow 
because they are for-profit or nonprofit, there is a 
difference? I thought it was about the kids. I thought it was 
about the education. I thought it was about putting out a 
productive member of society. And all of a sudden, we are 
making the determination it doesn't matter how they get there.
    Ms. Kanter. Congress focused on proprietary schools.
    Mr. Rehberg. The new Congress has made a change in the 
appropriation bill, H.R. 1, saying, wait a minute, slow down, 
if it is good for one, shouldn't it be good for all.
    Ms. Kanter. Right. If all institutions did not have profit 
motives as the mission, some schools----
    Mr. Rehberg. So profit is what determines whether somebody 
gets an education or not correctly or appropriately? Where have 
we made the determination that the institution of the 
university is different or better if it doesn't turn out the 
same product or a good product?
    Ms. Kanter. Some schools are predominantly focused on 
training students, proprietary schools, training students for 
specific careers. That really is the gainful employment 
legislation. That was one of the 14 program integrity rules 
that we looked at. So we are focusing narrowly on that rule. 
And we looked at the spikes, as I said before, in default rates 
and low graduation rates, and we think we are going to be 
proposing a rule that is reasonable.
    Mr. Rehberg. But if you are going to make a determination 
that it is the degree that counts or the education that counts, 
then there shouldn't be any difference whether it is for-profit 
or nonprofit. Frankly, it is appalling that anybody would 
consider there to be a difference or a problem that ultimately 
it is about the kids or the adults or the education, not 
necessarily how they get there. So you are now creating a wedge 
of how they get there without necessarily looking at the other 
side and saying, maybe an institution that is nonprofit is not 
producing what we want in our society, and that is an educated 
workforce.
    Ms. Kanter. Well, we have programs in place, as I said, and 
I think the two new ones that are part of the Pell Grant 
Protection Act to look at college completion and graduation in 
the macro sense. We are publishing graduation rates and default 
rates for all institutions of higher education. This particular 
sector focused on proprietary schools to graduate students in 
specific careers with especially high default rates and lower 
graduation rates has been the focus of our rulemaking.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.
    Mr. Rehberg. I am sorry, no.
    Ms. DeLauro.
    Mr. Rehberg. I am sorry, I apologize.

                 GAO REPORT ON FOR PROFIT INSTITUTIONS

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    I just would add a point on this that I think it is 
important to note, that reports are that the for-profit 
institutions represent 11 percent of higher education students, 
26 percent of the student loans, and 43 percent of loan 
defaulters, which is probably why we are taking a hard look at 
that.
    But I don't want to go into detail, but I will just 
commend, and maybe we should have a copy of this for everyone, 
that for-profit colleges, GAO's, and we support the GAO efforts 
here and their testimony, undercover testing finds colleges 
encouraged fraud and engaged in deceptive and questionable 
marketing practices. I suspect that is one of the reasons why 
we are taking a very hard look at what they do and what those 
outcomes are, which makes enormous sense if we are going to be 
investigatory and have oversight as to where some of our 
Federal dollars are going and how it is being used.

                FINANCIAL IMPACT OF CUTS TO PELL GRANTS

    If Pell Grants are cut, the result is students and families 
will borrow more. I have been told that Pell Grant recipients 
already take out loans. They have higher levels of debt than 
other college graduates; is that correct?
    Ms. Kanter. Yes.
    Ms. DeLauro. And what would be the consequence of more 
borrowing to compensate for less Pell Grant assistance?
    Ms. Kanter. Well, we don't want--we want students to borrow 
as little money as they have to. So one of the things that we 
want, I saw a number of reports that 50 percent of students are 
borrowing, undergraduates, are borrowing from high-cost service 
providers and also using credit cards. So one of the things we 
are doing is making Perkins Federal loans available to more 
students in this proposal that we are offering so that students 
would have lower interest rates so that they wouldn't be 
hopefully having the high cost at the back end to follow. We 
are not requiring them, but it would be made on a voluntary 
basis.
    The bottom line is we have got to educate students not to 
use credit cards in community colleges. The report I saw was 
over 90 percent of students are using credit cards and high-
cost loans that they could have used their Stafford capability. 
So we have a high priority to really look at this and get 
better outreach to students, better financial literacy. We have 
a contract with the State of Tennessee now to get us a good 
curriculum that can be used all over the country on financial 
literacy. We are looking forward to that.

                  IMPACT OF H.R. 1 CUTS TO PELL GRANTS

    Ms. DeLauro. Because my time is running out, I have a 
couple of things I want to try to cover. The disruption caused 
by a cut in Pell Grants for the upcoming academic year: what 
would happen if Congress was to enact the cut in Pell Grants 
made in H.R. 1, because the Higher Education Act requires that 
we publish by February 1st information on Federal student aid 
amounts for the upcoming academic year? So with that, 
information has gone out with regard to the financial aid 
packages for the fall semester so that students and families 
can make their plans. What would happen if that cut would take 
effect for the fall semester? Wouldn't that----
    Ms. Kanter. I mean, 9.4 million students would be affected. 
It creates tremendous uncertainty on the part of individual 
students who are independent and the dependent ones, their 
families, on what they can count on. So can they go full time? 
Can't they go full time? Is that Pell Grant going to be there 
for them or not? And we know that when things are unstable, 
students walk away, and we don't want that to happen.
    Ms. DeLauro. The point I want to make is that cutting the 
Pell Grant funding, and I have the citation here, will reduce 
the number of low-income students receiving bachelors degrees 
each year by about 61,000. What would be the effect of H.R. 1 
on the mandatory supplement to the Pell, what would happen in 
the mandatory part of the Pell Grant in 2014 if the cut 
proposed by H.R. 1 were to be enacted and left in place for the 
following 2 years? Would we end up cutting the maximum Pell 
Grant not just by $845 but by more than $1,500 when the effect 
of the mandatory piece is considered?
    Mr. Skelly. Yes, you would. That is the way the formula, 
the law works.
    Ms. DeLauro. That is the way the formula works. So, in 
essence, we could almost be eliminating the funding or actually 
the mandatory piece would get primarily eliminated.
    Mr. Skelly. If you maintain funding at $17 billion in 2011 
into 2012 and actually into 2014, there is a rippling effect on 
the mandatory contribution that comes from the SAFRA or 
legislation, and it would also be cut.
    Ms. DeLauro. Just if I can, Mr. Chairman, this is Evamarie 
Trimachi, a 41-year-old single mother and third-generation 
welfare recipient, earning an associate's degree at Gateway 
Community College, moved onto a bachelor's and is eyeing a 
master's. Federal education grants were essential for her move 
from a tax burden--these are her words--to a taxpayer. And that 
is what she said at Gateway Community College not three weeks 
ago. That is what the value of this program is all about. Thank 
you.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.

                      EDUCATION BUDGET PRIORITIES

    Dr. Kanter, I know you are here to defend the Department's 
budget and the President's budget, and I am here to say that I 
come from the point of view that we can't afford the 
President's budget. So as a member of the Appropriations 
Committee, part of my job is to find where to reduce the 
President's proposed budget. And if I want to look at the silo 
of the Department of Education, in other words not pit 
education, the education budget against other budgets, do you 
prioritize the full funding of the Pell Grants as the highest 
priority in the Department of Education budget? Is full funding 
of the Pell Grants the number one request of the Department of 
Education?
    Ms. Kanter. Well, because it is such a large portion of our 
revenue and our budgetary authority, without the full funding 
of the Pell Grant, we would see massive cuts, not only to 
students but in the Department of Education. Our goal is to 
maintain Pell at $5,550. That is our top priority for higher 
education. But again, we have proposals that Secretary Duncan 
talked about for K-12. We have an early learning proposal, and 
we look at this as a pipeline. We can't look at one part 
without looking at the other parts of our program.
    And with Pell, we have proposed a way to cover the $20 
billion shortfall for the next decade. So we think we have been 
reasonable. We have made some really tough choices. The second 
Pell is a very tough choice for us. We didn't have all the 
data. We would rather have not cut that second Pell as a 
request. We are working with servicers on the back end in the 
Direct Loan program so that students can be provided the kind 
of loan counseling that we talked about. We have a variety of 
ways that we have reduced spending. And for overall, within 
Pell, we figured out a proposal to pay for it, do our best, and 
hopefully, it can be part of the other proposals.
    Mrs. Lummis. Excuse me, Dr. Kanter.
    It is unclear whether the administration's proposals will 
pass, that will initiate the cost savings that you want to put 
into the Pell. So if the administration's legislative proposals 
don't pass, then maintaining a maximum Pell Grant will cost 
$44,000,000,000. Do you have a fallback position in case the 
President's proposals for changes in other programs don't pass?
    Ms. Kanter. Well, we look at this as a coordinated program 
that you would be working with the other committees to really 
come up with a solution, because we think within the Pell 
proposal, we have come up with a series of proposals in the 
Pell Grant Protection Act that are going to maintain Pell 
availability.
    Mrs. Lummis. So that is your way to saying we don't have a 
fallback position, right, no fallback.
    Ms. Kanter. Well, we will deal with reality, but we hope to 
make our case today that this is a top priority of the 
administration and that we don't want to see 9.4 million 
students coming away from college at the time when we need them 
to get into the economy through higher education.
    Mrs. Lummis. Thank you, Mr. Chairman.
    I yield back.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.
    And I want to thank you again for your presentation and the 
leadership.
    I am not sure about Wyoming or Montana, Mr. Chairman, but I 
know how critical this program is. And meeting with these kids, 
visiting the colleges, as I often do, I said it before, but I 
want to say it again, that these kids are not, they don't have 
a hand out. I mean they are working two, three jobs. And I meet 
with them on a regular basis.
    And if you look historically, I was just reviewing the 
chart, there was only one time that the Pell Grant was ever 
reduced, and it was only reduced $100. So, again, if you meet 
with these youngsters, the $845 cut will prevent many of them 
from getting that opportunity. Now, I don't know that every one 
of them is going to be a Member of Congress or a lawyer or a 
doctor or engineer, but if we want to create jobs, if we 
believe that education has some role in creating jobs, which I 
do, then I would not want to be the Congress, again only one 
other Congress went down $100. But for us to reduce it by $845 
is really a shame and embarrassment.
    We can think of many other places, I am sure you can, many 
other subsidies, many other places where we can find the money. 
And I am with you on finding the money and reducing the budget. 
Just look at the oil industry. I filled up my car this week, 
$62, and they are getting, what is it, $40,000,000,000 in 
subsidies, help from this Congress and from past Congresses. 
And yet the average worker is filling up a car, $62. The 
agricultural sector. We can keep looking.
    So I just want to appeal again that, maybe you can share 
with us, when was the last time the maximum award was under 
$3,000, and how have tuition and other fees changed since that 
time? While you are looking--oh, you have the answer, okay.
    Mr. Skelly. The last time the maximum grant was under 
$3,000 was 1997.
    Mrs. Lowey. And how has tuition increased and other fees 
decreased since that time?
    Mr. Skelly. Well, they have gone up. In 1997, that maximum 
grant paid approximately 37 percent of the cost of attending a 
4-year public school. The $5,550, that is in the President's 
budget this year would provide about 31 percent of the cost.
    Mrs. Lowey. Well, I would just say to my colleagues that to 
me, the most important thing is helping our young people get 
that education. And many of our kids have been very fortunate. 
My district is very diverse. There are some that can pay for it 
very easily, and others, frankly, would be dropping out without 
that $845. So, again, I think we can repeat, since we are still 
on the green light, for the average Pell recipient and her 
family, maybe you can tell us the average income of the Pell 
recipient?
    Ms. Kanter. Well, I can tell you that for students 23 or 
over, which represents almost half of the Pell recipients, 
their income is $30,000 or less.
    Mrs. Lowey. Or less. And where would they get the 
financing? If we want them to stay in school, and my colleagues 
respectfully asked the questions, what else should they turn 
to, where would they get the financing? We know they are 
working. They are working two or three jobs. They have parents 
who are struggling; they can't get the money from their 
parents. Where would they go? Who would they turn to if we 
signed off on these cuts?
    Ms. Kanter. A lot of them will leave, especially next year, 
if the Pell were to be reduced to below $3,000, which would 
take us back decades. But absent that, their only other hope is 
to get more loans. And we are trying to not burden people so 
that they can go into the economy with the least amount of debt 
possible.
    Mrs. Lowey. So I don't know how we can achieve the goal of 
leading the world in college completion by 2020, and my time is 
up so I won't ask the question, if the cuts to the Pell program 
in H.R. 1 were to become law.
    And I thank you, Mr. Chairman.
    Ms. DeLauro. Mr. Chairman, if I might just ask for 
unanimous consent to enter into the record the testimonies of 
these youngsters who were at this forum on the value of Pell.
    [The information follows:]



    Mr. Rehberg. Without objection.
    We are going to then go to Ms. Lee. And if there are any 
additional questions that the committee would like to have 
submitted for the record, we will entertain that as well.
    Ms. Lee.

                   PELL GRANT ELIGIBILITY FOR FELONS

    Ms. Lee. Thank you very much. Could you explain this 
lifetime ban as it relates to formerly incarcerated 
individuals? I know for drug felonies, there is a lifetime ban. 
Is that for all formerly incarcerated individuals convicted of 
a felony? What is the status of that at this point? I know we 
have to go back to the drawing board in terms of the law. 
Chairman Frank and others, we have worked on this for years. 
But can you kind of clarify and explain where we are on this?
    Ms. Kanter. At this point, I would have to get back to you 
on that. I am really sorry, but I don't have all that data 
available.
    Do you have that, Tom?
    Mr. Skelly. Some of the laws have changed on drug 
convictions. You have to be engaged in selling or doing 
business in dealing drugs.
    Ms. Lee. Right. But I mean, after you get out, once you 
have done your time and paid the price and coming back out to 
become gainfully employed to become a productive member of this 
society, what do you do?
    Mr. Skelly. You certainly can get education and hopefully 
be rehabilitated, but we will have to get back to you.
    Ms. Lee. But can you get a Pell Grant now?
    Mr. Skelly. I don't think you can qualify.
    Ms. Lee. That is still a lifetime ban. Is it a lifetime ban 
for only those convictions relating to drugs, selling?
    Ms. Kanter. We would have to get back to you, and we will.
    Ms. Lee. Okay. Could you kind of get back to us and explain 
the entire policy, the entire law, what the bans are, what 
convictions this applies to, if it is for all formerly 
incarcerated individuals, for all convictions, or what it is?
    Mr. Skelly. Students who are in jail in either a Federal or 
State institution are ineligible.
    Ms. Lee. I know that. I am talking about when you complete 
your time, you do your time, you get out, just like with food 
stamps. I have worked with the ranking member for years on 
this. You know, there is a lifetime ban in terms of eligibility 
for food stamps for those who had been convicted of a drug 
felony. If it were armed robbery, you could apply for food 
stamps, but a drug felony, you can't. And just so everyone 
knows, this disproportionately affects African-American men, 
and it really is a barrier to moving forward in terms of 
becoming productive members of society, and many end up back in 
jail because they just don't have that pathway out.
    Ms. Kanter. Right. We have a group in the Office of 
Vocational and Adult Education working on corrections with 
several agencies. So we will bring you the latest status of the 
report. We can give it to all members of the committee if you 
would like.
    Ms. Lee. Okay. Thank you very much.
    Mr. Rehberg. Thank you, Dr. Kanter.
    We appreciate your being here.
    Mr. Skelly, once again, we will probably see you again and 
again and again, but we thank you for your time today.
    Meeting adjourned.
    [The following questions were submitted to be answered for 
the record:]




                                        0Wednesday, March 16, 2011.

             FY 2012 BUDGET REQUEST FOR DEPARTMENT OF LABOR

                                WITNESS

HON. HILDA SOLIS, SECRETARY OF LABOR

                        Introduction of Witness

    Mr. Rehberg. [Presiding] Good morning. Welcome. It is nice 
to have you.
    This is the third in our series of hearings. We try to keep 
it as much as we possibly can to the fiscal year 2012 
discussion, although we seem to leak out to other issues. But 
we will do the best we can do keep it to the topic at hand.
    And Secretary, we welcome you. I normally don't give an 
opening statement unless I feel compelled, and today, I don't. 
So I will turn it over to Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    And good morning, Madam Secretary. I want to welcome you 
here and say thank you to you, and that I am looking forward to 
having you testify in support of your budget this morning.
    Let me begin by saying how much I support the good work 
that you are doing at the Department of Labor. And I would just 
say, on a personal note, I am excited for your being at the 
Department of Labor, but I think I would speak for my 
colleagues on both sides of the aisle that we miss you here in 
this august body. But it is great to see you in this position.
    And I am delighted to see that America has a Secretary of 
Labor who clearly believes in her mission, whose stewardship 
clearly supports the goal of good jobs for everyone.
    I want to thank you for what you and the President have put 
forward in this proposal. I know that this budget represents 
very difficult choices. And in some cases, I may have made 
different calls, but the budget stands in a sharp contrast to 
the plan outlined by the majority in H.R. 1, which includes 
radical spending cuts that will cost Americans jobs and 
jeopardize our prospects for economic recovery.
    To cut the deficit, the majority could have ended 
$40,000,000,000 in subsidies to oil companies, $8,000,000,000 
in agricultural subsidies to big businesses, $8,000,000,000 in 
giveaways to multinational corporations who send their jobs 
overseas, but instead, the majority wants to eviscerate 
spending for Workforce Investment Act programs.
    This effectively terminates the Federal Government's role 
in the workforce development, something that did not occur 
under President Reagan's administration, not even under 
President Nixon. Eight million people could lose this vital job 
aid entirely.
    In the past, members of both parties have understood the 
crucial role of Government in helping Americans help themselves 
through workforce development. They knew that unemployed and 
underemployed citizens rely on these services to find a job and 
to retrain.


                        workforce investment act


    In fact, the Workforce Investment Act supports job training 
programs all across the country with proven results. WIA 
programs have seen a 233 percent increase in participation in 
recent years from 3.4 million workers served in 2008 to just 
over 8 million in 2010. And even in this tough economy, over 
half of the people seeking help, 4.3 million Americans 
nationwide, have found jobs with the help of these services, 
despite four job seekers for every available job.
    I have visited several career centers in my district in 
recent weeks, have seen firsthand the difference that WIA 
makes. Case in point, Stratford, Connecticut. Ray Barbaresi, 31 
years working for Sikorsky Aircraft, laid off. He used the good 
offices of the One-Stop center and is now reemployed in 
Milford, Connecticut, doing similar kinds of work that he was 
doing in the past.
    There are 3,000 One-Stops in this country. And if the 
majority's budget gets enacted into law, millions of Americans 
will find a sign on these centers that reads ``gone out of 
business.'' This is a huge loss to many of them who found 
employment through the One-Stops.
    To take just one example, Elizabeth Strader of eastern 
Connecticut was able to move from bussing tables in a 
restaurant to working on a submarine project at Electric Boat, 
thanks to WIA-supported technical training. Stories like these 
happen all across America.
    In Montana, Gina, a 31-year-old woman who had been laid off 
from her commercial door sales company, managed to pursue nurse 
training through WIA. She now works as a charge nurse and makes 
much more than she ever did before.
    In Rock Springs, Wyoming, a dislocated worker named Justin 
was able through WIA training to get his CDL, his commercial 
driver's license. He now has a job as a truck driver and can 
support his family once again.
    The jobless are not the only ones to benefit. Businesses 
also rely on these job training programs to fill vacant 
positions with qualified and skilled workers. These cuts will 
hurt them, too.
    If they cannot find the workers right here, they will go 
elsewhere. We cannot allow that, not when we are trying to 
create and retain more good jobs in America.


                       workforce innovation fund


    So I am glad to see that, unlike the spending plan outlined 
by the majority, this budget maintains funding for employment 
and training programs while promoting reform. It proposes a 
Workforce Innovation Fund to test new ideas and to replicate 
proven strategies for delivering both employment and education 
programs at a lower cost per worker. And there are efforts to 
pursue in the innovation fund making a reform of the system.
    Last year, we recommended new funding for this proposal. 
This year, I see that you suggest that we redirect funding from 
some of the slower spending accounts within WIA to finance the 
proposal. In doing this, I am glad to see that the local 
resources used in One-Stop career centers are maintained.
    This budget also maintains a commitment to the most 
vulnerable among us, including small increases for employment 
and training programs that target Native American communities, 
migrants, and seasonal farm workers, disadvantaged youth, and 
our veterans.
    The majority claims they have walled off veterans services 
from cuts, but their budget does not include the additional 
resources that the Secretary had requested for returning 
military personnel and for homeless veterans. And it totally 
ignores the fact that 130,000 veterans get employment and 
training services through WIA.
    I am also glad to see that, unlike the majority's proposal, 
this budget works to ensure that workplaces are safe. H.R. 1 
would cut OSHA funding by 20 percent, meaning 800 less health 
and safety inspections. This budget, on the other hand, 
includes $6,000,000 to improve regulatory standards to protect 
workers, $6,000,000 for additional whistleblower 
investigations, and will enforce laws that protect those who 
face reprisal for reporting unsafe or illegal activities.
    I hope that whatever differences that we have, we can all 
agree that workers who show up at their jobs every day, who 
perform the tasks that are assigned to them, should expect to 
get the wages and benefits they have earned. The increases here 
for worker protection agencies, such as the Wage and Hour 
Division or the Employee Benefits Security Administration, will 
ensure this happens.
    There is so much I support in this budget request, 
particularly in contrast to the approach adopted by the 
majority. I look forward to discussing it in more detail.
    No investment is more critical than investment in our human 
capital, and it is programs like this that are the essence of 
good government. They work to make opportunity real and 
benefit, above all, the families of working people who need 
help.
    These are people who have played by the rules. I hope we 
will do what we can to see that we have the resources to 
continue putting America back to work.
    I thank you, Madam Secretary.
    And I thank you, Mr. Chairman.
    Secretary Solis. Thank you.
    Mr. Rehberg. Thank you.
    And we must continue to remind ourselves that one of the 
reasons that we passed H.R. 1, which is no longer in effect 
because it was voted down in the Senate, is because the 
Democrats did not complete their work in 2011.
    I apologize for that because it would have been nice if we 
could have just focused on fiscal year 2012. But since they did 
not get their work done, we continually find ourselves having 
to deal with continuing resolutions.
    So, hopefully, under new management, we will have an 
opportunity to work together with you. Once we complete their 
work on fiscal year 2011, we will continue on with the work of 
fiscal year 2012. And I look forward to hearing your testimony.

                           Opening Statement

    Secretary Solis. Thank you very much.
    Well, first of all, thank you very much for inviting me to 
present today, Chairman Rehberg and also Ranking Member DeLauro 
and Members of the subcommittee. It is a delight to be here 
and, I think, a good opportunity to be before you to testify 
today.
    Since I came before you last year, there have been a lot of 
changes. But what has not changed is the desire of the American 
people for us to work together, and I think that is something 
that we all remember and know that we have to keep working on.
    Undoubtedly, we will not agree on every issue or every 
investment, but I hope that we can agree on many and that we 
can also agree on the end goal. And that is to continue to 
bring our country out of this recession with a stronger 
economy, better opportunities for all working Americans.
    In the President's 2012 budget, it reflects difficult 
choices that we have had to make, striking a balance that will 
put our Nation on a sustainable fiscal path while also 
investing in programs and activities that will fuel economic 
growth and prepare our Nation to succeed in the 21st century. 
For the Department of Labor, that means ensuring that everyone 
has or can compete for a good and a safe job.
    As the President has said, to win the future, we must out-
educate, out-innovate, and out-build our global competitors. I 
am proud that our employment and training programs are 
preparing our workers for jobs in growing industries, and I am 
also proud that our budget reflects our commitment to 
innovation.
    For example, the Workforce Innovation Fund, which we will 
administer jointly with the Department of Education, is 
designed to support efforts to make the public workforce 
investment system efficient, streamlined, and targeted to serve 
our growing customer base. But it is also an example of where 
we made tough choices in the budget.
    Last year, our workforce innovation proposal largely 
consisted of new money. But recognizing the need to reduce 
spending, the current budget redirects funding from the slower 
spending State-wide set-aside to create this competitive grant 
fund.

                               GREEN JOBS

    We take the President's goal of deficit reduction very 
seriously. We are working very hard at the Department of Labor 
to strike the right balance between reducing spending and 
making strategic investments that will support American workers 
and businesses in our economy.
    A critical piece of the 21st century economy will be 
renewable energy. We can't cede this playing field to our 
competitors abroad, and American businesses get this. That is 
why we have had an incredible demand by employers for resources 
to help support more training in green job sectors, especially 
during the Recovery Act grant competitions.
    In response to the demand, the budget requests $60.0 
million for the Green Jobs Innovation Fund to provide 
opportunities for nearly 10,000 workers to gain industry-
recognized skills through training programs which partner with 
local employers. And I have to underscore that because, many 
times, people do not understand what these partnerships do 
require, I would say, on almost 100 percent basis, that they 
are coupled with an employer.
    Our budget maintains our commitment to helping vulnerable 
communities and our veterans to be productive members of our 
Nation's labor force. We included targeted investments in the 
workforce programs that serve Native Americans, migrant farm 
workers, and, of course, our Nation's veterans, including $2.0 
million additional to help veterans successfully transition to 
civilian employment and an additional $3.0 million for homeless 
veterans. In each case, we have also targeted women veterans 
and their military families.
    The ability of our young people to qualify for jobs of the 
future is threatened by the challenges that they face today, 
including high levels of unemployment, and that also reflects 
the fact that many of our veterans are finding it very 
difficult to obtain employment.

                               JOB CORPS

    To help them compete in the 21st century, we need to get 
them into good jobs now. Therefore, the President's budget 
requests additional funds for the YouthBuild program and for 
Job Corps operations.
    But again, we make this request in a responsible manner. We 
made a tough choice by reducing Job Corps construction funds by 
$27 million to cover higher costs for operating the Job Corps 
centers. As you will hear tomorrow, I know you will be hearing 
more about proposals to strengthen the integrity of the 
Unemployment Insurance program, and we look forward to working 
with the Congress on these initiatives.
    At the Department of Labor, we also take seriously our 
obligation to both protect workers and to protect those 
businesses that play by the rules and provide their workers 
with safe and fair workplaces. No worker should have to worry 
about whether they are going to come home safely at the end of 
a shift or to get paid for the work that they do.
    And no employer should have to compete against companies 
that cut corners on safety or evade the law. In fiscal year 
2012, the budget builds on recent gains for worker protection 
agencies by proposing increases of $132.0 million over the 
fiscal year 2010 appropriation.

             OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION

    Some of the highlights of our worker protection request 
include the following: the Occupational Safety and Health 
Administration, which must ensure that all employers live up to 
their obligation to provide a safe workplace. And the 2012 
budget provides resources we believe are necessary to help us 
meet that challenge.
    The request includes additional resources for OSHA staff to 
ensure that everyone is playing by the rules. It maintains and 
expands our commitment to compliance assistance programs, 
including the Voluntary Protection Program and the free On-Site 
Consultation Program that focuses exclusively on small 
businesses.
    It includes an increase of $6.4 million to expand the 
agency's regulatory program to meet the complex safety and 
health threats in today's workplaces and respond to the 
President's executive order that we review, revise, and update 
our regulations that are already on the books.
    Lastly, the Congress has greatly expanded whistleblower 
protections throughout new industries. So our request is a $6.0 
million increase for OSHA to meet that challenge.
    Last April you may recall the Upper Big Branch mine 
disaster, resulted in the needless loss of 29 miners, and that 
was the worst mining disaster since the creation of the Mine 
Safety and Health Administration, MSHA. In light of the 
tragedy, the budget request includes additional resources to 
ensure that MSHA has the tools that are necessary to protect 
our miners.
    This request is detailed in my testimony, but I wanted to 
point out that it includes funding to continue to reduce the 
backlog of contested citations at the Federal Mine Safety and 
Health Review Commission. We must tackle the backlog to ensure 
that we are holding accountable mine operators who fail to meet 
their legal and moral responsibility to operate safe mines.

               EMPLOYEE BENEFITS SECURITY ADMINISTRATION

    I also wanted to highlight a few other priority areas at 
DOL. The budget request also contains a program increase of 
$41.4 million for the Employee Benefits Security 
Administration, known as EBSA, which protects employee benefits 
for more than 149 million people by safeguarding integrity of 
718,000 pension plans and 2.6 million health plans.
    Our request for the Wage and Hour Division includes a new 
multi-agency initiative to prevent misclassification, which is 
when an employer treats workers as independent contractors in 
order to avoid their legal obligation to pay taxes or to follow 
employment laws. We support the use of legitimate independent 
contractors, but we do not support denying workers the 
protections they are entitled to, denying taxpayers the revenue 
they are entitled to, or employers who do not play by the 
rules.
    Before closing, I want to emphasize that we strongly 
support evaluation and efficiency at the Department of Labor. 
We are constantly scrutinizing ourselves and looking for 
opportunities to work better and smarter.
    We have adopted a rigorous self-evaluation program----
    Mr. Rehberg. We have to move on quickly here.
    Secretary Solis. Okay. Well, with that, I will conclude my 
oral testimony. More details can be found in my written 
statement submitted for the record.
    [The information follows:]



    Mr. Rehberg. Great. We will put it in the record.
    Thank you very much.

                     GREEN JOBS UNALLOCATED BALANCE

    Madam Secretary, I would like to dwell a little bit on the 
green jobs for a minute because we see in your fiscal year 2012 
request, you have asked for $20,000,000 in addition to the 
$40,000,000 that was in the fiscal year 2010, bringing it up to 
a grand total of $60,000,000.
    And I guess one of the issues I would like to bring up is 
the $500,000,000 that was allotted or allocated for green jobs 
in the stimulus--a failed stimulus, by the way, according to 
your own figures. But you have quite an unspent balance within 
that account already. Why is it necessary to ask for an 
additional $20,000,000 when there is already money in the 
account, unless, of course, it is going to be spent by the end 
of this accounting period, which I believe is somewhere in 
June?
    The second question I would like to ask then is what do you 
have to show for it within the green jobs? Is industry showing 
any interest at all? How many have you trained, and how many 
have you placed?
    Secretary Solis. Thank you, Mr. Chairman.
    Yes, our request is to--again, as I said in my statement, 
is to actually draw down other funds to help provide for this 
innovation fund. And what we are doing is actually asking--
looking at, in fact, programs that we can help establish that 
would be more competitive, that will actually give us better 
feedback, that will help us to ascertain where the actual 
positive results need to be placed.
    Mr. Rehberg. So you have no mechanism now, I understand, 
under the workforce investment----
    Secretary Solis. No. We do.
    Mr. Rehberg. You do?
    Secretary Solis. Yes, we do. We do have internal mechanisms 
now, and we have----
    Mr. Rehberg. And then tell me how many have been trained 
under the green jobs, and how many have been placed?
    Secretary Solis. Okay. What I would tell you is, the $500.0 
million that was given out for job training, covers a slew of 
areas. So, when we talk about green jobs, we are also talking 
about apprenticeship programs; partnerships with utility 
companies; partnerships with different industries; and 
providing training to, I would say, at least 38 percent of the 
participants that were included in the----
    Mr. Rehberg. But that doesn't change the fact that 88 
percent of the money has not been spent to this point, at least 
in the most recent data that I have received. So I guess the 
question is, it should be pretty easy to give me a number. How 
many have been trained under the green jobs concept, and how 
many have been placed?
    Secretary Solis. Well, because these programs started up 
initially--as soon as a grantee receives a grant, you don't 
begin immediately--you have to set up an infrastructure. You 
also have to do recruitment. You also have to put all those 
tools in place and gather the appropriate infrastructure 
needed.
    So it takes time to do that. And we are now----
    Mr. Rehberg. Except that it was stimulus dollars.
    Secretary Solis [continuing]. In the second half of the 
program. We are in the second part of the program where, we are 
now getting that feedback now from our grantees. So I can't 
tell you the full effect of these programs just as a result of 
them starting up. Maybe later in the year, because that is 
typically what happens.
    Mr. Rehberg. But, Madam Secretary, they were stimulus 
dollars, and so they were supposed to be timely and targeted.
    Secretary Solis. And I will tell you----
    Mr. Rehberg. And we are over 2 years into this, and you 
have got 88 percent of the money is still not spent?
    Secretary Solis. Well, I would tell you that much of the 
funding levels go out somewhat scattered over a couple of 
years.
    Mr. Rehberg. Okay. So you can't tell me how many have been 
trained and how many have been placed?
    Secretary Solis. The fact is that the funds are available 
over an 18-month period. So it isn't as though you can get them 
all out in the front because we had to stagger some of these 
grants.
    Mr. Rehberg. Okay. I will ask then in writing for you to 
give me how many have been trained and how many have been 
placed. I also noticed that there was----
    Secretary Solis. We actually--Mr. Chairman, we actually had 
a good demonstration project in your State.
    Mr. Rehberg. I am asking for totals.
    Secretary Solis. And we actually served 2,400 people in 
Montana, in a unique program that we did, and they got one of 
the biggest grants, $5.0 million to work with utility 
companies, to put people into the trades and construction. And 
I can tell you that the progress that I am seeing there was 
very positive. I will provide that information to give you a 
more complete outlook of what took place.
    Mr. Rehberg. Okay.
    Secretary Solis. But the partnership there, I think, is an 
excellent opportunity for people to understand that it isn't 
just about training for the sake of training. It is actually 
combining resources with those individuals in the trades.
    [The information follows:]

                      Green Jobs Training Program

    ARRA green jobs training grants were awarded in January 2010 and 
include: Energy Training Partnership (ETP), Pathways Out of Poverty 
(Pathways), and State Energy Sector Partnership (SESP) grants. ETP and 
Pathways grant have a period of performance through January 2012 and 
SESP grants through January 2013. Data reported reflects grant start-up 
and implementation activities and subsequent training outcomes achieved 
during the first year of grant performance.
    As of December 31, 2010 (most recent data available), the ARRA 
green jobs training grantees have achieved the following performance 
outcomes:
     23,009 individuals have been served through the grants
     18,271 individuals have begun education/training 
activities
     The number of individuals that have received services 
is higher than the number that have begun education and training for 
several reasons: many individuals have received critical services to 
address barriers to training and employment, such as assessment and 
case management, but have not yet enrolled in training activities; 
grantees reported activities through a set point in time (December 31, 
2010), so some participants had just started receiving services but new 
training classes had not started when grantee reports had to be 
submitted; and natural attrition as occurs with all workforce 
development programs.
     Of these 18,271 individuals, 8,649 individuals have 
completed education/training activities:
     Of these, records suggest that 4,925 were unemployed 
upon beginning training.
     Of these, 1,700--approximately 35 percent--had entered 
or obtained a new position of unsubsidized employment as of December 
31, 2010. Note, entered employment is reported for participants that 
successfully completed education/training activities prior to entering 
or obtaining a new position of employment. Many trainees have been 
incumbent workers (workers who were already employed upon entering 
training) who undertook training in order to retain their jobs or 
upgrade their skills. These outcomes are not counted as ``entered 
employment''.
     Additionally, 7,505 credentials have been awarded to 
training participants.
    In addition to these grants, there were two additional green jobs 
competitions under the authority of the Recovery Act--Green Capacity 
Building, and State Labor Market Information Improvement Grants. These 
grants had purposes other than direct training. The total amount for 
the five grant competitions, after set-asides for administration and 
technical assistance, was $490 million. As of the December 31, 2010 
financial reports, 19.4 percent of this total was expended and 41.8 
percent was obligated. Training-focused discretionary grants generally 
have an initial start up period that lasts approximately 6-9 months. 
During this time grantees are receiving training on grant requirements, 
preparing to offer training activities to workers, and completing other 
critical, required start-up and preparation activities. Expenditure 
rates are lower during this start-up period, while obligation rates are 
higher. For this reason, obligation rates are the more appropriate 
indicator of these grantees' activities, and obligation rates for all 
of the grants are appropriate for where grantees are in their period of 
performance.

    Mr. Rehberg. Okay. Excuse me. I understand that with the 
workforce investment, it was amended to include labor 
organizations. Your Under Secretary last year said that the 
administration would be willing to amend that to suggest that 
it doesn't need to require that component. It could be part of 
the----
    Secretary Solis. It can be either/or.
    Mr. Rehberg. Well, in the authorizing legislation, it was 
``must.'' And so, the administration would be okay with----
    Secretary Solis. I can tell you, Mr. Chairman, that many of 
the grants that we have given out include a variety of people 
and not all exclusively one group over the other. I mean, that 
is just a fact. So I want to be clear on that.
    Mr. Rehberg. Okay. So you would support then if we needed 
to change the authorizing legislation so that it did not 
necessarily----
    Secretary Solis. I am not saying to change it right now, we 
are looking at funding the best proposals. And we get some of 
the best proposals have both--we have some with union and some 
non-union. We are not excluding anyone.
    Mr. Rehberg. All right. My time has expired.
    Ms. DeLauro.
    Ms. DeLauro. Let me just mention the information I have 
about this program, which started in January of 2010. There is 
a 3- to 9-month startup period in terms of getting off the 
ground, which means that many of the grants are just now 
beginning to match individuals with employment opportunities.
    I know that the Secretary will provide some of this 
information, but as I understand it, as of the quarter ending 
September 30, 2010, which is the most recent data available, 
nearly 10,400 participants have been served through these 
grants. And of the participants served, close to 8,400 have 
received education and training, including 313 in on-the-job 
training activities.
    Approximately 3,600 participants have completed education 
and training programs. After 8 months of the grant awards, 500 
participants completed job training, entered a new position or 
employment.
    I had a direct experience with a One-Stop center, where I 
went to talk specifically about the green jobs program, and 
this gentleman, actually the day that I was there, had just had 
an interview and was hired with the green jobs training that he 
had received under the program.
    Let me move to another area because you did talk about 
businesses, Madam Secretary. I had the opportunity to see the 
letters that were sent to the Education and Workforce Committee 
by the Boeing Corporation in advance of your testimony last 
month. They wanted the committee to know of the partnership 
that they have forged with the workforce system in Washington 
State; St. Louis, Missouri; South Carolina.
    And I know that this parallels what I hear from Connecticut 
employers, who work with our workforce areas on a variety of 
partnerships involving recruitment and training to meet the 
workforce needs. And I actually have a copy of the Boeing 
letter, which I would like to, with unanimous consent, submit 
for the record.
    Mr. Rehberg. Without objection.
    [The information follows:]



    
    Ms. DeLauro. Thank you.
    But also ask you, Madam Secretary, can you discuss some 
other examples of this type of partnership, including the 
partnerships with small businesses?
    Secretary Solis. Yes. Thank you very much for the question, 
as well.
    I know that there is a lot of debate about who partners 
with us, and we have made a big attempt, to really include many 
business partners in these grants. And in fact, we have several 
success stories.
    For example, in Arizona, Maricopa Workforce, working with 
the connection business service team to help perfect sales 
persons' abilities there. We know that we have actually been 
able to provide assistance there; and as a result, a qualified 
veteran who went into the program, was able to get a job right 
away.
    I know in the Chairman's State, in Montana, in the Butte-
Silver Bow area, which is served by a WIA grantee known as 
Career Futures, Inc., we recently got testimonial from a 
personnel director at Butte-Silver Bow government, who told us 
that the department notifies Career Futures for all employment 
opportunities and relies on them to refer trained and work-
ready applicants.
    So we know that there is a good effort working with local 
businesses including in Dallas-Fort Worth, where I believe 
Representative Granger has been very uniquely involved. They 
are helping to revive the aerospace industry by making sure 
that that high-talented workforce has the ability, if there are 
layoffs, to quickly get into other upscale jobs so that talent 
would not be lost.
    And I think that is very noteworthy, and I appreciate the 
work that has been going on in Dallas-Fort Worth with our big 
partners. Some of them are Lockheed Martin, Bell Helicopter, 
Textron, and Vought Aircraft, and they work very closely in 
Dallas with the Tarrant County workforce development board.
    So I think there are some very positive stories that can be 
told.

                               JOB CORPS

    Ms. DeLauro. Thank you. Thank you.
    Let me move to a Job Corps question, near and dear to my 
heart. Job Corps is the most effective Federal program aimed at 
recovering the roughly $469,000 each high school dropout costs 
our economy and the Government over the course of their 
lifetime. In addition, economists show that investments in Job 
Corps yield a significant multiplier effect, $2 for every $1 
spent.
    My counterparts on the other side of the aisle proposed to 
virtually eliminate Job Corps in H.R. 1 by reducing its budget 
by 80 percent. Slashing the Nation's most cost-effective, 
accountable, and market-driven solution for the millions of 
youth who leave our schools unprepared for the workplace, in my 
view, is a wrong move at the wrong time.

                      IMPACT OF JOB CORPS CLOSINGS

    What impact would these cuts have on States and districts 
like Kentucky and Montana that have multiple Job Corps centers? 
What impact would it have on States like mine, in Connecticut?
    It is my understanding that the average-size Job Corps 
center supports 228 local jobs, which equates to approximately 
600 jobs in Montana alone and an estimated $47,000,000 in local 
economic activity.
    Mr. Rehberg. I am going to allow the Secretary a short 
answer. We have a little workforce training issue up here. He 
forgot to reset the clock, and your time has expired. But if 
you would like to answer briefly?
    Secretary Solis. Yes, thank you.
    Ms. DeLauro. Do it briefly now, and then you can come back 
around and have some extra time and complete the answer.
    Secretary Solis. Well, according to our data, if H.R. 1 
were to pass, we would first see a rescission of about 300.0 
million. That, in fact, will have a definite impact. In program 
year 2011, that runs past September 30, 2011, another program 
cut could possibly have a dramatic impact on our programs here 
and would actually result in perhaps half of our Job Corps 
programs folding.
    Mr. Rehberg. Okay.
    Secretary Solis. And others that would also be----
    Mr. Rehberg. Thank you. And I am sure Job Corps will 
probably come up again.
    Ms. DeLauro. Thank you, Madam Secretary.
    Mr. Rehberg. Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.

                 UNEMPLOYMENT RATE OF GULF WAR VETERANS

    Madam Secretary, you touched on it in your opening 
comments, but I would like to expand on it a little more. On 
Friday, March 11th, the Bureau of Labor Statistics released new 
data that put the unemployment rate of the Gulf War II era 
veterans at 11.5 percent, well above the national unemployment 
rate.
    Those Gulf War veterans between 18 and 24 have an 
unemployment rate of about 21.9 percent. While this percentage 
is not significantly higher than nonveterans in the same age 
group, it is still troubling that over 1 in 5 of our young 
service members are returning home and entering the 
unemployment lines rather than the workforce.
    I also note that your statistics show that the veterans are 
likely to work in the public sector, in comparison with the 
nonveterans, like 30 percent to 15 percent. Much of this, of 
course, can likely be attributed to the veteran hiring 
initiatives in the Federal Government, as well as the desire 
for service members to continue public service.
    My question is, in addition to the current programs, what 
more can the Department of Labor do to have veterans 
reintegrated into the civilian workforce and particularly in 
the private sector?
    Secretary Solis. Thank you for your question, Congressman 
Alexander.
    I am very proud of our Veterans' Employment and Training 
Service VETS programs. In fact, our Assistant Secretary there, 
Ray Jefferson, is a West Point graduate who is also disabled. 
He has done a tremendous job working with the U.S. Chamber of 
Commerce to create liaisons so that we can make sure that the 
employers have information about available incentives for them 
to hire many of our veterans around the country.
    And we are embarking on this with other agencies. So it is 
not just us. It is VA. It is also DoD, and it is all our 
partners that work on this. But we are also looking at 
increasing our TAP program, which is the Transition Assistance 
Program, that will actually provide more support before the 
veteran exits, for those that are getting ready to exit, and 
keep them in the loop for a longer, 6-month period after they 
depart from the military, to help them with the kind of 
coaching, resume writing, and training that is available for 
them that many of them are not aware of. In addition, for their 
families because we are finding that that is also a hardship, 
We are also boosting our efforts to relay information and 
enforce the compliance with Uniformed Services Employment and 
Reemployment Rights Act, which is USERRA, which you probably 
know about, that employers need to have the ability to hire 
back veterans as they come back from their tours.
    We are doing everything we can. I spent time also in Camp 
Pendleton about a month ago and visited with our Helmets to 
Hardhat program, where we actually have an apprenticeship 
program there that is training veterans for jobs in 
construction, welding, and pipe trades all very good-paying 
jobs. And once they leave Pendleton and they go back to their 
community, they will continue to get training, if they want to 
continue in that trade, up to a journeyman. And those salaries, 
as you know, pay very well.
    So we are doing everything we can. But if you have 
suggestions or things that perhaps we are not looking at that 
we might take note of, I would be more than happy to talk to 
you about that.
    Mr. Alexander. Thank you, Mr. Chairman. I will wait until 
the next round.
    Mr. Rehberg. Mrs. Lowey.

                 BUREAU OF INTERNATIONAL LABOR AFFAIRS

    Mrs. Lowey. Thank you, Mr. Chairman.
    And welcome, Madam Secretary. I want to thank you for your 
service, and I would like to highlight your request for an 
increase of $8,800,000 for the Bureau of International Labor 
Affairs efforts on behalf of worker rights.
    We have to ensure that our trading partners enforce the 
labor rights provisions of their own laws, as well as our trade 
agreements, to protect our workforce. We cannot allow our trade 
partners to undercut American workers by exploiting their 
workers overseas, including exploiting child labor, to undercut 
wages.
    How will the request build international relationships that 
improve global working conditions and strengthen labor 
standards around the world? Because again, unless we really 
focus on this, we are not focusing with a laser beam on 
creating jobs here at home when we can lose them to employers 
overseas.
    Thank you.
    Secretary Solis. Thank you. Thank you for your question, 
Congresswoman Lowey.
    The Bureau of International Labor Affairs, ILAB program, as 
you know, traditionally had a major focus in child labor, and 
we work with several countries, 60 countries, to be exact, in 
about 50 projects that we fund, helping to initiate projects 
that will help to combat trafficking of children and using 
child labor in those countries. We have actually been able to 
help 1.4 million children as a result.
    But taking this a step further in ILAB now, we are also 
promoting better labor and worker protection rights in 
different countries, which I think will help complement what 
the President and what some of the Members of Congress would 
like to see in our trade agreements. So by working at that 
level, I think we also help to bring up the standards of 
workers in other countries, their wages, so that--number one, 
we can defray that magnet that attracts people to want to come 
to this country, and more importantly, create an incentive for 
people to have better-paying jobs in their own country.
    And as an example, I will give you one, say, in Cambodia, 
where this practice has been going on now through the Better 
Work program for the past 10 years, what they do there is have 
a system of working with the government, with big international 
corporations, as well as with the International Labour 
Organization.
    And what they do is help to regulate how work is done, 
making sure that women and children are not abused. And then, 
for consumers, kind of provide a seal of approval from the work 
product so people will know that those products were not made 
because of bad labor practices. It is something that works, and 
I think it can help us also, as I said earlier, in our U.S. 
trade agreements.

                   FUNDING FOR TRAINING IN HEALTHCARE

    Mrs. Lowey. Thank you.
    Healthcare systems in the United States, both private and 
public, are facing a widening gap between the number of 
positions and the number of qualified applicants to fill them. 
Nowhere is this more evident than the shortage of nurses and 
nurse faculty.
    In fact, in 2008, almost 50,000 students were denied 
admissions to schools of nursing primarily due to an 
insufficient number of faculty. In my district, there are a 
number of excellent community college programs to help train 
nurses and other healthcare professionals. But it is still 
insufficient to meet the demand for these services.
    We have to train our workforce for growing fields, 
especially in this economy in which people are losing jobs late 
in their careers and fear that they don't have the training or 
skills to find new employment. If you can comment on the 
department's strategy for increasing training opportunities in 
healthcare-related fields and what role can the community 
colleges play in expanding career opportunities in the health 
field?
    Secretary Solis. Thank you.
    We had received under the American Recovery and 
Reinvestment Act, ARRA, funding of approximately $250 million, 
which was spent on job training programs that would help 
provide assistance for people that wanted to get into 
healthcare, and it really starts with many community colleges. 
Many of the projects that we funded included community colleges 
to help expand their nursing programs, but also they're what we 
call ambulatory care programs. That is really where people can 
get into the healthcare industry and then move up the ladder.
    And while visiting one of the programs out in Congresswoman 
Matsui's district in Sacramento, I saw a wonderful display of 
what was happening there collectively with a health association 
of hospitals. So that there was an entry line for not just the 
job training on the job, but also the job. And it was very, 
very competitive.
    I also know that we provide assistance for people who want 
to get in, for young people even, into pharmacist assistants 
positions. I saw that at one of our Job Corps programs, where 
we are actually incentivizing young people, especially 
disadvantaged youth, to get into these careers.
    That is the only sector that has grown in the recovery over 
the last two years consecutively, the healthcare industry. And 
we are adding more and more jobs there.
    Mrs. Lowey. Thank you.
    I think--do I have a minute left, or is the clock working? 
I shouldn't ask that. [Laughter.]
    I guess it is done.
    Mr. Rehberg. Ms. Granger.
    Ms. Granger. Thank you.
    The program that you mentioned a minute ago about from 
Tarrant County, I am very familiar with. It is excellent 
training. The people that graduate oftentimes have jobs before 
they finish the program. And if not, they go straight into 
good-paying jobs. So I hope that continues.

          EMPLOYEE RETIREMENT INCOME SECURITY ACT (``ERISA'')

    In this financial crisis we are in, people are looking at 
their retirement and planning for retirement, sometimes having 
to re-plan. Some people have raised concerns with me that the 
new proposed rule from the Department of Labor on ERISA 
fiduciary investment advice might actually restrict investor 
access to much-needed investment--their education, their 
guidance. And we certainly want them to know that they are 
doing.
    How can we ensure that Labor's fiduciary rule and the 
ongoing efforts at the Securities and Exchange Commission are 
aligned and help offer investors more, not less education and 
guidance?
    Secretary Solis. Thank you for your question, 
Congresswoman.
    And I do want to say that this question also came up at one 
of my last hearings. And I do want to reassure the committee 
that we are working very closely with the Securities and 
Exchange Commission, SEC, and the Commodity Futures Trading 
Commission, CFTC, and they meet on a regular basis.
    In fact, this has come up quite a bit, and my understanding 
is that we are working together on developing that standard. My 
concern is making sure that we set up a good system that is 
transparent, so that this consumer really does get the benefit 
of the best information and is not being gouged, so to speak, 
or that there is a conflict of interest.
    That is really what we are trying to do with this 
particular regulation. Fiduciary responsibility means that we 
have to be responsible. We want to make sure that the public, 
our consumers, are aware, and that is really the basis for this 
rule.
    And if there are any questions, I would further ask that my 
Assistant Secretary Phyllis Borzai come in and meet with you to 
give you a thorough briefing on what it is we have been doing. 
But I can tell you right now people have been misinforming 
folks that we have not been collaborating with SEC, and that is 
not the truth.

                            OLDER AMERICANS

    Ms. Granger. Good. I have one more question.
    The fiscal year 2012 budget proposes moving the Senior 
Community Service Employment Program out of DOL and over to the 
Department of Health and Human Services. I hear positive things 
about the program from older workers in my district. So can you 
tell me why you want to move the program to another agency, and 
can you alleviate their concerns that the move would have a 
negative impact on the program?
    Secretary Solis. It is a transfer of the program. This is 
how I see it. Most of the older American or aging programs are 
housed in HHS, and this is the only one that is housed at DOL.
    And it just makes more sense, as we are looking to try to 
streamline and make programs more effective, that seniors would 
actually get more robust help if they were placed in HHS 
because then they would be able to get counseling. They would 
be able to get other services that they could be entitled to. 
So that is what the change is about.
    We have met with Secretary Sebelius, and they are very open 
and accepting of this proposal. And I, of course, am very 
concerned about making sure that seniors are not left behind 
and that they do continue to get this help.
    I have seen it work in my own district when I was a former 
Member of the House. And it is quite telling to see how people 
are energized again, to be able to share their expertise in a 
work setting and also feel self-worth, but also get a little 
stipend because they are providing that work.
    So I don't think that is going to go away, but I will tell 
you that that is what the purpose of moving the program over to 
HHS was about.
    Ms. Granger. Makes sense. Thank you very much.
    Thanks, Mr. Chairman.
    Mr. Rehberg. You bet.
    Ms. Lee.
    Ms. Lee. I think Mr. Jackson got here before me.
    Mr. Rehberg. Okay. Mr. Jackson. I am sorry.
    Ms. Lee. Thank you.
    Mr. Jackson. Thank you.
    Mr. Rehberg. That is two, Kevin. [Laughter.]
    Ms. DeLauro. The right will protect you. The right side 
will protect you.
    Mr. Jackson. Thank you, Mr. Chairman. Mr. Chairman, thanks 
for yielding me the time.
    And Secretary Solis, thank you for your testimony. Two very 
quick questions, and then we can get very quickly to Ms. Lee.

                    EFFECT OF H.R. 1 ON UNEMPLOYMENT

    And I think I will ask my questions first. In this level of 
unprecedented unemployment, can you explain to the committee 
what the effects of H.R. 1 will have on your ability to reduce 
unemployment? That is my first question.
    And secondly, Madam Secretary, I am concerned with the 
President's budget proposal to reduce the State and local 
program funding through the Workforce Investment Act by nearly 
50 percent. My State has used these funds to address nursing 
shortages in underserved areas, support a high school academy 
for healthcare careers, and expand access to services through 
online technology.
    Early last week, I received a letter from Warren Ribley, 
Director of the Illinois Department of Commerce and Economic 
Opportunity. In his letter, he states that the proposed cuts 
made to State and local programs would ``effectively halt 
Illinois's track record at shoring up high-growth sectors that 
lead to good new jobs for our citizens.''
    Mr. Chairman, I ask unanimous consent to insert Director 
Ribley's letter into the record.
    Mr. Rehberg. Without objection.
    [The information follows:]



    
    Mr. Jackson. Madam Secretary, while I understand tough 
choices must be made when it comes to cutting the budget, I 
wonder what led the administration's decision to cut funding to 
the WIA State and local program funding over other programs 
under consideration?
    Thank you, Mr. Chairman.
    Madam Secretary, just those two questions.
    Secretary Solis. Thank you.
    The potential cuts that have been talked about by Members 
here on the panel, would actually affect our 3,000 One-Stop 
Centers. And I would say to you that it would have, in my 
opinion, a very negative effect at this time when people are 
seeking employment and still seeking services.
    What that means is that local veterans, disabled, women, 
dislocated workers, many of whom are men in this particular 
market, will be severely affected, as well as our youth. You 
will see a slowdown in terms of those offices closing. They may 
not all close at one time, but I think gradually you will see a 
good maybe 50 percent go right away, and then the rest.
    That will have an impact because we service anywhere from 
30 million people that come through our doors. And when people 
do go through our programs, whether it is the dislocated worker 
program or any of the training programs, their success rate is 
much higher than someone who never made it to a One-Stop.
    In addition, I would say to you that we also couple other 
services within One-Stop Centers. For instance, right now, we 
have made help available to people to do their tax returns 
there. We are also providing what we call ``VITA services''' to 
help people with that. Not only Unemployment Insurance, UI, 
services, but we also serve in some places as incubators for 
small businesses. So people who want to start up their 
businesses also have that opportunity to do that.
    I am also very concerned for returning vets. One-Stop 
Centers may be the only lifeline available to them in, say, a 
rural community where you have maybe a post office and a One-
Stop. One-Stops have computers, Internet access, and other 
things which many rural areas do not have.
    So it would have an effect, I would think, in a very 
dramatic way for people who are seeking services. That is not 
where you cut services in a time of recession. We are still 
seeing very high, high rates of unemployment with disparate 
groups, with minority groups, with veterans, and with people 
who, and I have to tell you in all frankness, people that are 
over the age of, say, 50. It is very hard to place some of 
these people.
    Also, for half of the unemployed, 7 million, have been 
unemployed for more than 6 months we are hearing stories where 
business people are saying that they will not hire individuals 
that have been unemployed that long. And that, to me, is 
discriminatory and should not be an allowed practice.

                          LONG TERM UNEMPLOYED

    Mr. Jackson. I appreciate your raising the question. I do 
want to hear an answer to the WIA question.
    But Congressman John Lewis and I are contemplating filing 
an amendment to the 1964 Civil Rights Act that would raise the 
idea of employment status. That is those employers who are 
asking job applicants how long they have been unemployed as 
fundamentally discriminatory.
    Is that something that the Labor Department, from your 
perspective, will consider, and what are you doing with respect 
to that?
    Secretary Solis. Well, we are aware that there have been 
statements made, and we obviously want to curtail that and want 
to make sure that businesses know that just by someone being 
unemployed that long does not mean that they are not qualified. 
Some, in fact, do not have to utilize a lot of our training 
because they are highly trained.
    You have a lot of people with B.A.s and Ph.D.s. You have 
people that are highly technically trained. What is happening 
is you still continue to see four out of five people competing 
for one job. That is the problem, the job creation.
    It is not about just the training. It is about making sure 
that businesses have the confidence to hopefully speed up the 
process to hire people up. And we are also working on that, 
too, to give them incentives.
    With respect to the State funding and the innovation fund, 
if I might, Mr. Chairman?

                     WORKFORCE INNOVATION ACCOUNTS

    Mr. Rehberg. Quickly.
    Secretary Solis. I would just tell you that our innovation 
fund does not take any money from the State, local governments. 
It is from the programs that we administer, and it is a way of 
helping us look at how we can be more competitive and actually 
streamline and make our programs more effective.
    So it is not going to hinder that at all, and I will have 
my ETA Administrator follow up with you.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.
    And welcome, Secretary Solis. Nice to see you again this 
week.

                       GOLD STANDARD EVALUATIONS

    As you know, we are spending thousands of billions of 
dollars in this country that we don't have. We are borrowing it 
from China, from Japan, from our own people, from the Fed. So 
this committee has an obligation, this Congress has an 
obligation to make sure that the money that we are spending, 
the money that we don't have that we are spending has a 
measurable impact on our economy.
    And when it comes to your agency especially when we want to 
know that it has a measurable impact on economic mobility and 
on employment and on the economy as a whole. That is how we 
recover. So my focus is going to be on measurement, on how we 
know we are getting the bang for our buck.
    How do I know that the employee in Rock Springs, Wyoming, 
my home State, that was mentioned earlier, came at a reasonable 
cost to the taxpayers who put up the money and are borrowing 
the money to make sure that this one individual in Rock 
Springs, Wyoming, has a job? And so, that is my focus in my 
questions.
    Now here is where I am going with this for my first 
question. Could you explain how this gold standard evaluation, 
which is underway at the Department for Adult and Dislocated 
Worker Programs, is going to work? I want to know how it will 
be conducted and when we might see results and whether or not 
it will give us a sense of the cost and benefit of programs 
under your auspices?
    Secretary Solis. We are looking at a thorough evaluation of 
many of our programs at the Department of Labor. In fact, we 
have hired a principal evaluator to help us do this because, in 
past years, we realized that this has not taken place, and we 
know that there have been a lot of questions about the types of 
programs that are being offered and what have you.
    When we look at the gold standard, we are looking at 
setting up a form of analysis that would look at a control 
group for a certain portion of time to make those evaluations 
to see how successful, in fact, these programs are or are not 
and how we can make improvements.
    Mrs. Lummis. Thank you.
    Another case in point. I want to focus on a youth program. 
The stimulus bill provided $1,250,000,000 for youth summer job 
programs. It also received $1,000,000,000 in regular 
appropriations for fiscal year 2010. So we are looking at about 
$2,300,000,000, $2,400,000,000 available for these programs 
through fiscal year 2010. And the goal was to help young people 
gain long-term employment beyond the summer months.
    We checked out this Web site that the State of Wisconsin's 
Department of Workforce Development posted. It said they 
received $11,700,000 from stimulus. It served 4,000 
participants, according to the stimulus data. But then it also 
said that one of the goals--of course, allowing people to have 
ongoing employment--only 3 percent of the program's 
participants stayed beyond the summer. And so, that cost 
taxpayers nearly $91,000 per job.
    So my question is since that is just one example of a cost 
per job, do you think that is an adequate return on taxpayer 
dollars when you look at the whole unemployment situation, and 
how can we adequately go on with programs that have that sort 
of a cost to the taxpayers when they can't find a job that 
produces $91,000 in income for their family in a year?
    Secretary Solis. Well, I don't have that data in front of 
me, but I will certainly come back to you on that amount. But I 
will tell you that in our American Recovery and Reinvestment 
Act ARRA monies that we gave out for summer youth employment, 
we actually were able to see well over 300,000 students 
employed during the summer.
    Now what tends to happen, even though you have these 
programs that are set for summer youth, sometimes the local WIA 
boards are able to extract the money and carry it into the 
year. Not all students will stay that long because they go back 
to school, and that is also something that happens.
    But it doesn't mean that the program has failed. And again, 
I will come back to you on that because I have not seen that 
amount in any form presented to me.
    But I would just say that what is happening right now is we 
have a terrible problem with unemployment of our youth overall. 
It goes anywhere from 25 to 26 percent, and in communities of 
color, it is even higher. And on Native American reservations, 
it is about 80 percent, and it is a disgrace.
    So we need to do more. I don't think the time is right now, 
but we can probably better target and do something more 
systematically there. But I will take a look at it. That is why 
we need to also reauthorize the Workforce Investment Act, which 
I think will help us streamline and really get a handle on what 
the local, regional folks need and not a top-down decision.
    [The information follows:]

                        Summer Youth Employment

    As a follow up to the Secretary's hearings on the FY 2012 budget, 
the Department is providing data on summer employment under the 
Recovery Act. Through January 31, 2011, 420,286 youth have been served 
with Recovery Act Youth funds. Of those participants, 368,747 
participated in summer employment, well above the Departmental goal of 
x. The Recovery Act provided $1,200,000,000 in funds for WIA Youth 
activities, not $1,250,000,000. Because the Recovery Act allowed the 
Department to retain one percent (1 percent) of the funds for program 
administration and oversight, the actual allotment to the States and 
outlying areas and Indian and Native American grantees was 
$1,188,000,000. Additionally, PY 2010 WIA Youth Formula funds totaled 
$924,069,000, not $1,000,000,000. Based on the WIA Youth Recovery Act 
allotment of $1,188,000,000 to states, outlying areas, and Native 
American programs the cost per participant served through 1/31/11 is 
$2,827 and the cost per summer employment participant is $3,222.
    In addition, specific to Wisconsin which was discussed in the 
hearing, the WIA Youth Recovery Act allotment for Wisconsin was 
$13,808,812 and their number of youth that participated in summer 
employment under the Recovery Act was 4,386, for a cost per summer 
employment participant of $3,148 or slightly below the national 
average.
    As stated in the Recovery Act (and Congressional explanatory 
statement), the funds for WIA Youth activities were focused on summer 
employment, which is a subsidized work experience, not full-time or 
part-time employment. The goal as stated in the Recovery Act reads 
``the work readiness indicator of the WIA shall be the only measure of 
performance used to assess the effectiveness of summer employment.'' 
The data indicates that 79% of the youth who participated in summer 
employment increased their work readiness skills.

                              YOUTH BUILD

    Mr. Rehberg. Ms. Lee.
    Ms. Lee. Thank you very much, Mr. Chairman.
    Good to see you, Madam Secretary, and thank you for your 
leadership.
    First of all, let me just say on the summer jobs, you know, 
we worked last year to try to increase it to a couple billion 
dollars. That would have been maybe 500,000 to 800,000 of our 
young people. We need more money in YouthBuild, and we don't 
need these cuts, as I think H.R. 1 zeroed out funding for the 
program.
    So I look forward to getting more information. But I think 
that we need to look at how to hire more of our young people, 
especially during the summer, because it helps them with their 
resume building, but also it helps bring food into their 
families. Given this economic downturn, it is extremely 
important.

                          UNEMPLOYMENT CRISIS

    We are just beginning to emerge from the worst unemployment 
crisis in the last 70 years, with 14 million people still 
unemployed. More than 40 percent have been jobless for over 6 
months. Now we know that the unemployment rate is, what, 8.9 
percent?
    Secretary Solis. Yes.
    Ms. Lee. Communities of color, minority unemployment still 
15.3 percent for African Americans and 11.6 percent for 
Latinos. And this is what your department, I believe, reports, 
although many of us know it is more than that.
    Workforce area, we are seeing record numbers of unemployed 
individuals coming into One-Stop centers across the country, 
looking to find work, preparing resumes, preparing for the jobs 
that the economy is beginning to create.
    Now let me ask you because so many people have been 
unemployed for so long that now we have a crisis where there 
are about 4.7 unemployed workers for every available job 
opening. We have people, and we call them ``99ers''' who are in 
the category of being unemployed for more than 99 weeks now, 
who have hit a wall. No more unemployment benefits.
    We have been trying over and over again--Congressman Scott, 
myself, and others, Congresswoman DeLauro, Congresswomen 
Roybal-Allard, Lowey, and many--to try to figure out how to 
extend those benefits for the 99ers so that at least 14 
additional weeks will be provided to make sure that they don't 
fall through the cracks.
    Now we have had a difficult time because, of course, under 
PAYGO we know we have to find a pay-for. We are trying to 
identify where we take the money to provide for the extension 
of unemployment benefits. But what we also recognize is under 
the pay-as-you-go rules, there is a designation for an economic 
emergency. And this is an economic emergency for those 
individuals, I think a couple of million people.
    And so, I want to know from you, have you looked at this 
from your department? We are working with the White House now, 
and we are working with our leadership here. But we are trying 
to figure out a way to find, and we can't get a CBO score yet 
because we haven't been able to get that far. But our office 
estimates $14,000,000,000 to $16,000,000,000.
    But this money will be put right back into the economy. It 
is an economic boost. You know, 99ers are consumers. But in 
addition to that, I think it is our moral obligation to really 
help those who are falling through the cracks and have nowhere 
to go now.
    Ms. DeLauro. Would the gentlelady yield for one second 
before the Secretary responds?
    Ms. Lee. Yes.
    Ms. DeLauro. I met with a group of 99ers in my community 
just about a week ago. I asked each one of them what they were 
doing before unemployment. One young man was a graphic 
designer, was 12 years at a place. Bank teller, accountant, 
social services director.
    So as you pointed out earlier, people who were qualified, 
trained, and who had skills in order to be able to get jobs. So 
I just wanted to add that to what the----
    Ms. Lee. Right. These are people who are looking for jobs, 
but because there are only 4.7 unemployed persons for one job, 
they need help. They need just a safety net.
    So can you kind of explain what your department is doing, 
if anything, or how you think we need to move forward to ensure 
that they receive these benefits?
    Secretary Solis. Well, yes, it is a great concern, and you 
heard me earlier talk about that. And it is something that we 
are focused on. And we will work with you, and we will work 
with the White House and those that agree that this is a matter 
that we need to prioritize.
    But it is difficult because I know that even in the 
Congress, as we try to get an extension for unemployment 
benefits, the last time it was difficult to arrive at that. So 
I know that that is something that folks here have to also have 
the political will to move forward on.
    And I know that, and you are right. It is absolutely right 
that every dollar that is expended generates another $2. It 
keeps another small business open. It keeps that gas tank full. 
And these 99ers, in many cases, through no fault of their own 
lost their job because an industry went down. And that is why 
there is a need to extend, TAA, Trade Adjustment Assistance, 
extension for people that are going to be losing their jobs or 
have lost their jobs and also to help continue to provide 
assistance for more training.
    Because I know that some people do have to make a career 
change because perhaps that area that they were focused on is 
no longer there, and it just behooves them to get involved in 
our training programs. We have put out a Solicitation for Grant 
Applications, SGA, for TAA community college so that we could 
start looking at ramping up programs where we know are going to 
have a positive outcome, in nursing and different places where 
we know there is going to be jobs or renewable energy.
    Mr. Rehberg. Ms. Roybal-Allard.
    Secretary Solis. We can talk more about that.
    Ms. Lee. I look forward to talking to you.
    Ms. Roybal-Allard. Thank you.

                            JOB CORPS WORKS

    Welcome, Madam Secretary. I just want to make one point 
about Job Corps because it is an example of a Federal program 
that works and really does deserve a strong investment.
    The fact is that at a time when unemployment is very, very 
high, 83 percent of Job Corps graduates are still able to find 
a job and go on to higher education or enlist in the military. 
So it really is a program that works that we need to preserve.

                   H.R. 1'S EFFECT ON OSHA'S PROGRAMS

    I would like to change focus now and talk a little bit 
about OSHA and what H.R. 1 is doing or proposing to do with 
OSHA in terms of its cuts, which I believe are very reckless 
and irresponsible because they endanger the lives and health of 
millions of American workers while also penalizing responsible 
businesses.
    It is my understanding is that OSHA would be forced to lay 
off 20 percent of its inspection staff and virtually halt the 
development of new safeguards to protect American workers. 
These layoffs will likely fall disproportionately on the 
bilingual inspectors hired over the past 2 years by this 
administration in recognition of the changing nature of our 
workforce.
    And the cut to State plans, which protect 40 percent of the 
Nation's workers, would be devastating in an already critical 
State budget environment. States would be forced to conduct 
10,000 fewer inspections, leaving workers in those States with 
significantly less protection.
    In California, the estimate is that OSHA would lose over 
$5,000,000 in funding and would be forced to conduct nearly 
1,500 fewer inspections. I am sure, Madam Secretary, that you 
know that every day in this country more than a dozen workers 
lose their lives in preventable workplace accidents. That is 
close to 100 lives that are lost a week.
    It is obvious to me that we should be increasing workplace 
safety enforcement and oversight, not cutting it. Would you 
explain the differences between the cuts being proposed by 
Republican colleagues and the President's budget's request and 
how they will impact the health and safety of American workers?
    And also if H.R. 1 would eliminate OSHA safety and health 
statistics funding, what impact would this have on workers and 
their employers--employees?
    Secretary Solis. Thank you, Congresswoman.
    Yes, as you said earlier, we are projecting that if H.R. 1 
were to be implemented, we would lose about 20 percent of our 
ability to provide safe protection in the workplace. And what 
that means in terms of staff, we are looking at possibly well 
over 400 investigators.
    And in particular, of course, because we recently hired in 
the last 2 years individuals who now serve the populations that 
have not been served adequately in the past, they would 
probably be naturally the first ones to go, and it would, I 
think, again create a crisis where you are going to see more 
fatalities or injuries in the workplace.
    And you are right that we need to work closely with our 
State plans because those in the line of enforcement are very 
valuable players out there, and I know States are undergoing 
tremendous preserve having to deal with their deficit spending 
as well. And in many cases, this is the first thing that will 
go, and that also is something that people need to be mindful 
of.
    That is why it is important that we are asking for the 
support that we are for our OSHA enforcement. We believe we 
have really been able to streamline and use our ability to be 
more targeted in our approaches.
    So we can't go out and police everywhere. No, we know that. 
But what we can do is look at places where we know that the 
hazards are higher--in construction, in some of the service 
industries, in the hotel area, for example, or people that are 
dealing, say, in refineries or in places where chemicals 
abound.
    Those are places where we are strategically looking at--for 
example, in farming, because we know that there have been many, 
many abuses with farm workers and their children. So that is 
something also that we are mindful of.
    We would see a reduction in terms of fewer workplace 
inspections, about 19,000 total between the Federal and State 
programs. That is a lot of people that are not going to have 
assurances that we are going to have boots on the ground, so to 
speak. And I would tell you that we have done a tremendous 
effort in the past few years under previous administrations to 
have a Web page available so businesses could go online and 
understand exactly what kinds of compliance assistance is 
available, what they can do to help remedy and prevent 
workplace injuries.
    If that goes down, you are going to see hundreds of 
thousands of businesses that are not going to have access to 
that information, which is probably the second most highly used 
U.S. Federal agency Web site right now that businesses go to.

                   EFFECTIVENESS OF JOB CORPS PROGRAM

    Mr. Rehberg. Madam Secretary, the sky is green. In fact, 
Rodney told me just the other day the sky is green. I heard it 
out in the hall. The sky is green.
    Unfortunately, just because we all said it does not make it 
true. Job Corps's nearly $2,000,000,000 education and 
professional training program that also provides living and 
housing expenses, clothing, childcare assistance. It even pays 
participants to receive driver's licenses. These social 
services, just like the job training, seem to be wholly 
duplicative of other Federal subsidies.
    But Job Corps is different. It is a residential program, 
and it provides education and/or job training for economically 
disadvantaged youth. And here is the problem, Madam Secretary.
    If we don't rubber-stamp and fully fund Job Corps, we are 
told that we are abandoning the children that need us most. We 
must get beyond the rhetoric and divest ourselves of the overly 
passionate personal attachment to programs that have been 
proven to be ineffective.
    The $1,700,000,000 request would fund 45,000 positions. 
That is nearly $38,000 per person, more than the annual cost of 
most public colleges. This is the most expensive cost per 
participant program in the department, if not the entire 
Government.
    According to the Bureau of Labor Statistics, there are 15.5 
million 16- to 24-year-olds that are not enrolled in school. 
Job Corps serves just 45,000, or 0.4 percent of 1 percent of 
this population each year. For nearly $2,000,000,000, we are 
serving 0.4 of 1 percent of school dropouts.
    A 2007 Office of Management and Budget assessment found 
that the program cost exceeds the benefits. Yet we continue to 
rubber-stamp this budget because it is for the kids.
    A 2006 longitudinal study found that a Job Corps graduate 
earns just 22 cents more than their non-Job Corps peers. The 
study concluded by stating, ``Because overall earnings gains do 
not persist, the benefits to society of Job Corps are smaller 
than the substantial program costs.'' This is not a political 
statement. This is a fact.
    Lastly, the Department of Education's Institution of 
Education Sciences conducted its own assessment of Job Corps' 
educational component in April of 2008. It found that there 
were no discernible effects when it came to progressing in 
schools and only potentially positive effects of completing 
school.
    So, Madam Secretary, 0.4 of 1 percent of 15.5 million 
eligible young adults, earning just 22 cents more than their 
peers, and no discernible effect at progressing in school. How 
do you justify the budget?
    Secretary Solis. Mr. Chairman, I would tell you that I am 
very proud of our Job Corps programs. In fact, I don't know if 
you have ever visited any of our Job Corps programs.
    Mr. Rehberg. Absolutely. I have got three in my State, and 
I visit them----
    Secretary Solis. They are very, I believe, constructive and 
very appropriate for individuals that need a second chance. Not 
all of them have bad backgrounds. Some of them just were plain 
out of luck or they felt that after completing high school, and 
many of them do have a high school degree----
    Mr. Rehberg. Madam Secretary, I am not discouraging helping 
anybody that is in need. I am not discouraging any program 
within the Federal Government that lifts people up and helps 
them.
    Secretary Solis. Well----
    Mr. Rehberg. I am just suggesting that the facts show that 
there is no discernible improvement in education or employment 
for a $38,000 cost per person.
    Secretary Solis. Well, I know that is not accurate, and I 
will be happy to give you information and our data. Because 
many of the students that come in with no GED do complete a 
GED. That is a major requirement. We also encourage them to 
continue on and get into one of our certificate programs, and 
many do get job offers while they are still at our Job Corps 
program.
    And I would tell you we have some remarkable programs that 
work with big industry. I saw this, as an example, in New 
Mexico, where we had a big corporation that was actually 
helping to provide scholarships to incentivize those students 
to continue on and to further their higher education and 
actually promised them a job after they completed their 
programs.
    Mr. Rehberg. So you disagree then with the OMB and the 
Department of Education study? Because I can come up with 
examples in Butte, Montana, and Rock Springs, Wyoming. We can 
always come up with the success stories. The problem is OMB and 
the Department of Education do not agree with you.
    Secretary Solis. Well, I would tell you that we do have 
strong support from this administration for the Job Corps 
program, and we have made many changes in the last 2 years----
    Mr. Rehberg. I don't deny that you have support from the--
--
    Secretary Solis [continuing]. Since I have been the Cabinet 
member overseeing these programs. We have a new Administrator 
there. We have done everything to do our checks and balances 
and to make sure that we are expending our money in an 
expeditious manner.
    We are even beginning to service and allowing for Iraqi 
vets who come back from overseas, who qualify in the age 
bracket of 16 through 24. So we are doing everything we can to 
address many of the issues that we are seeing.
    We talked about veterans also having high unemployment. 
This is a bridge for them, and I think that the program does 
work.
    [The information follows:]



    
                     FUNDING FOR PROGRAM EVALUATION

    Mr. Rehberg. Ms. DeLauro.
    Ms. DeLauro. Thank you. Thank you, Mr. Chairman.
    Madam Secretary, I'd like to just clear up a couple of 
things. You have been asked a number of questions about 
evaluating programs, seeing how they work. We want to make sure 
we are getting the best bang for the buck and all of that 
effort.
    So it is important to note that H.R. 1 zeroes out funding 
for evaluation. So if we are going to try to evaluate programs 
and see whether or not they are effective or not, it would seem 
to me that we would want to put some money in there to actually 
do so.

            COMMUNITY SERVICE EMPLOYMENT FOR OLDER AMERICANS

    The other piece is on the Community Service Employment for 
Older Americans, which is a good program. I wish Ms. Granger 
were here now, but I will speak to her personally. It is a good 
program which has been cut in half by H.R. 1--from $825,000,000 
down to $400,000,000. So, again, the Republican budget looks to 
cut in half programs that work.

                          JOB CORPS STATISTICS

    A quick point on Job Corps. I have a different set of 
statistics. Everybody has got their own set, I suppose. But Job 
Corps successfully prepares 60,000 economically disadvantaged 
youth for jobs, military, higher education, with an astounding 
80 percent success rate. It is one of the most effective 
Federal programs. Each high school dropout costs our economy 
and the Government $469 thousand over the course of their 
lifetime. So it is an enormous return on the investment.

                           YOUTH UNEMPLOYMENT

    Let me move to a different subject. I want to come back at 
some point on youth unemployment. Because as I see, every 
effort with regard to youth unemployment, whether it is 
YouthBuild, Job Corps, the formula grants to States for youth 
unemployment, that every opportunity is being eliminated 
through H.R. 1, in effect. Is that accurate?
    Secretary Solis. That is correct.
    Ms. DeLauro. That is correct. So every opportunity is gone 
as a result of H.R. 1.

                    BACKLOG OF MINE SAFETY CITATIONS

    Mine safety, let me talk about that, if I can, for a 
moment. You mentioned the explosion at the Upper Big Branch 
mine last year, which was a tragic explosion. One of the 
problems that came to light is a huge growing backlog of mine 
safety citations on appeal to the Mine Safety and Health Review 
Commission, and they are waiting adjudication.
    The backlog grew from about 4,000 in 2007 to more than 
19,000 this year. That happened after MSHA increased penalties 
for mine safety violations, following a series of serious mine 
accidents like the Sago mine disaster in 2006. In response, 
mine operators began appealing a much higher percentage of the 
citations that they receive.
    As long as the citations remain pending on appeal, the 
operator does not have to pay the penalty. The Government may 
be prompted to reduce the amount to get the case settled. 
Perhaps most important, citations that are on appeal do not 
count toward determining a pattern of violation that triggers 
enhanced enforcement authorities.
    To bring down the backlog, we saw that the Congress 
provided in the supplemental appropriations bill last year 
additional judges, law clerks at the review commission, for 
additional staff at the Labor Department in order to be able to 
bring these cases to conclusion.
    The funds are available for only 1 year. They expire at the 
end of this July. What would happen to the effort to reduce the 
mine safety citation backlog if the supplemental funds are 
allowed to expire with no replacement? What does your fiscal 
year 2012 budget propose in order to continue to bring the 
backlog under control?
    Secretary Solis. Thank you, Congresswoman.
    Yes, you point out very clearly that the backlog was 
something that needed to be addressed. And we have, from 
October through the end of 2010, been able to close about 1,300 
backlog cases involving almost 4,800 citations or violations.
    We project that funding for addressing the backlog will 
only be available through July of 2011, this year. You are 
accurate in that. Our original estimate was that it would take 
2.9 years to clear up the backlog of cases in the pipeline when 
this project actually began a while ago.
    We did get additional lawyers and judges, but also realized 
that we have to do much more. And because of the result of us 
being more vigorous and having many more of the operators now 
dispute these citations, there is more backlog.
    Ms. DeLauro. Backlog. Right.
    Secretary Solis. Because we are doing our job. And I think 
the Congress needs to be aware that we need to continue to keep 
a handle on that.
    If the money goes away, it will also impede our progress in 
terms of the Upper Big Branch investigation because we didn't 
have initial resources to begin focusing on this investigation, 
which is so critical. It is the worst disaster we have had in 
decades.
    Ms. DeLauro. We lost 48 coalminers who were killed on that 
job. Is that right?
    Mr. Rehberg. Mr. Alexander.
    Ms. DeLauro. Thank you, Madam Secretary.
    Mr. Alexander. Thank you.

                          FY 2012 OSHA REQUEST

    Madam Secretary, OSHA is requesting almost $25,000,000 more 
in comparison to the FY 2011 budget. The requests for safety 
and health standards, Federal enforcement, whistleblower 
program, State programs, compliance assistance, Federal 
compliance assistance, State consolidations, and compliance 
assistance training programs have all increased over previous 
requests. And the remaining programs under OSHA are requesting 
their funding remain the same.
    The safety and health standards program alone is requesting 
an additional $6,500,000 million. According to the Department 
of Labor's budget justification, the increase includes 
$4,000,000 to enhance the agency's contract support for 
regulatory activities and $2,400,000 to provide resources to 
continue the development of the agency's new Injury and Illness 
Prevention Program, a standard which would significantly 
enhance worker safety by adding yet another burden to the 
employers by requiring them to develop and implement a 
comprehensive safety and health plan to find and fix 
recognizable hazards.
    Given the agenda of both Congress and the administration to 
target excess spending, why, of all things, would OSHA not be 
satisfied with a standstill budget? Why would they ask for an 
increase of $25,000,000?
    Secretary Solis. Congressman Alexander, when I took over as 
Cabinet member for the agency, we had not seen increases in 
many agencies, one of which was OSHA. In the past 10 years, we 
have seen a tremendous growth in businesses, and we requested 
additional enforcement staff and investigators so that we could 
begin to handle more appropriately these types of injuries and 
cases.
    But one of the things that I want to make clear also is 
that we are taking seriously our job to undertake strategic 
enforcement because, again, we can't police the entire business 
community across this country. But we can do a better job in 
helping to prepare our businesses.
    And that is why we have continued our funding for the 
Voluntary Protection Program, VPP, program, and that is a 
program that many businesses in particular find very helpful in 
terms of helping to set out their compliance. We have boots on 
the ground, so to speak, where we have staff that will go out 
and help businesses, in particular small businesses, that might 
be having a difficult time in meeting our regulations.
    So we do our very best that we can, and I think that is a 
big change in what we have seen in the past few years because 
our level of funding was not adequate. And I think that is what 
our mission is, to try to make sure that we protect workers, 
but that we also create a good incentive for those businesses 
that do play by the rules so that they are not unevenly 
disadvantaged by other people who tend not to abide by the 
rules.
    And I think we are doing everything we can to make sure 
that small businesses are aware that we are also on their side. 
We certainly don't want to be a burden by cutting off jobs.
    Mr. Alexander. You don't find that somewhat puzzling that 
we are requesting more money so we can help business understand 
clearly the rules and regulations that we are imposing on them?
    Secretary Solis. You would be surprised that many 
businesses and many employees are not aware of what their roles 
and responsibilities should be. I find that all the time when I 
go out across the country and meet with workers and meet with 
businesses that are not even aware that we have these tools 
available for them.
    So I think, because of the past few years and the funding 
that was not provided, we barely, in the last 2 years, were 
able to bring up our funding to about 2001 levels. So it really 
has not kept up the pace in terms of what other agencies have 
been able to do in this area.
    Mr. Alexander. Thank you.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.

                       EFFECTIVENESS OF PROGRAMS

    And I just want to say at the outset that we all believe in 
the need for fiscal restraint and that the deficit is out of 
control. And in fact, in the last month, I voted for two 
continuing resolutions, and I wasn't happy with some of the 
cuts. But overall, I felt we had to start and try and work in a 
bipartisan way, and I do want to work together with my 
colleagues on both sides of the aisle.
    And I also agree we should be evaluating every program, but 
we cannot expect to grow our economy by taking away the 
services that our constituents use to get back to work. And I 
couldn't help but thinking, Mr. Chairman, as I reviewed some 
numbers, of Members who live in various States. And I go back 
to Senator Moynihan's constant complaint.
    In Connecticut, Connecticut gets back 69 cents for every $1 
in taxes. In New York, we get back 79 cents for every $1 we pay 
in taxes. Wyoming, they get back $1.11 for every $1 they pay in 
taxes. Montana gets $1.47 back for every $1 paid in taxes, and 
Louisiana gets $1.78 for every $1 that is given in taxes.
    Ms. DeLauro. I only get 69 cents?
    Mrs. Lowey. Yes. I only get 79 cents. So we should have 
this discussion about some of the programs. But we can deal 
with that another time.
    I also want to say in response to the question about 
businesses that need some instructions, I was looking at a 
report that the GAO did, and investigators found recipients of 
farm payments who resided outside of the United States in Hong 
Kong, Saudi Arabia, the United Kingdom, for example.
    And a former executive of a technology company received 
approximately $20,000 each year for 4 years that were covered 
by the income limits. This individual also received more than 
$900,000 in farm program payments that were not subject to 
those limitations.

                    CARRYOVER FUNDS OF WIA PROGRAMS

    So I am sure many of my good friends and colleagues 
wouldn't want to eliminate all the farm programs because some 
of these executives made a mistake and took money that they 
shouldn't have gotten. But let me get back to another point, 
which I really want to discuss again, the Workforce Investment 
Act, because I think it is so important.
    And in Montana, as the gentleman, my friend said, 3,647 
residents receive WIA intensive service or training last year. 
Ninety-one percent of those dislocated workers gained 
employment. And I could go on to our other States.
    So one of the complaints--and again, I think we have to 
review all these programs, making sure they are effective, and 
I want to give you the opportunity to respond to the carryover 
issue because I have heard that those who support the workforce 
cuts in H.R. 1 argue that there were a large amount of unspent 
carryover funds in DOL accounts, justifying the cuts.
    So if you could explain why H.R. 1 does not simply 
eliminate unnecessary funds, but instead essentially eliminates 
workforce programs? I think it is important for us to 
understand this because since these programs are in Montana, 
Wyoming, other of our colleagues' States, we really need an 
explanation as we evaluate these programs. How does the 
carryover program work? Could you explain it?
    Secretary Solis. Well, I think what, first of all, we have 
to understand is how different programs have different 
criteria. For instance, you have funding streams that, for 
example, are formula driven, and disbursements that don't all 
go by our Federal calendar either. So that is some of the 
discrepancy here because you have got States disbursing the 
money that they receive from us, using a different calendar 
year.
    Ours starts in October. Theirs starts in June. So you have 
kind of this gap. But that has been going on for many years. So 
it isn't something new that just got identified. It has been in 
existence for a long time.
    What tends to happen is that many of the funds that we do 
put out--if it is a 3-year program, and typically, it is--we 
find that the second year is when that money is actually 
expended at a higher rate because that is typically when the 
recipients start to get everything going. They also have to, 
for lack of a better word, encumber some of the money because 
they know they still have other contracts that they have to 
fulfil from that appropriation so they put that money aside.
    You don't pay up-front on a contract without the services 
being delivered. So that is kind of the theory behind this.
    Mrs. Lowey. Thank you. I think the red light is working 
again.
    Mr. Rehberg. It is, indeed. It is, indeed.
    Let me help my urban friend out to better understand the 
money that is coming back to the State of Montana because we 
would love to give you some of that back. The number that 
always seems to escape the discussion is the fact that one-
third of my State, which is 49,000 square miles--and frankly, 
Mrs. Lowey, I have pastures bigger than your district on my 
ranch. [Laughter].
    Forty-nine thousand square miles managed by the Bureau of 
Land Management, the Forest Service, the U.S. Fish and Wildlife 
Service, and the National Park Service. And guess what? All 
that money coming in for the personnel to pay their salaries 
and all their budget is considered money back to the State of 
Montana. So we get more Government than we want in Montana.
    And if you would want to sign legislation with me to 
eliminate those employees, we would be a lot happier with a lot 
more deeded land. We wouldn't have to deal with the wolves and 
the grizzly bears and the Endangered Species Act and all of the 
other things we have to.
    Mrs. Lowey. Will the gentleman yield for a minute?
    Mr. Rehberg. I would yield.
    Mrs. Lowey. I am just curious because I have been looking 
at these numbers. And according to these numbers, 44 percent of 
Montana farmers received subsidies from '95 to '09. You want to 
get rid of those?
    Mr. Rehberg. No. Not necessarily. We are talking about 
vouchers. We are talking about a lot of different kinds of 
ideas of income support, and I might remind the ranking member 
of her support for those very issues, the income support, on 
the Ag Appropriations Committee.
    Yes, we will talk. Let's talk about the 27,000 square miles 
of missiles that we are carrying and all of the various 
infrastructure to protect our force.

                         STATE PAID LEAVE FUND

    But I am going to move on, and that is I note that you are 
proposing a new $23,000,000 program called the State Paid Leave 
Fund, which I find interesting. And since Mrs. Lummis isn't 
here, and she usually asks the States rights issue, why in the 
world is the Federal Government putting together pilot projects 
for States at a time and, frankly, I have been saying this in 
town hall meetings all over the State of Montana as I am 
talking about House Resolution 1, which, unfortunately, seems 
to be dead.
    And that is, frankly, cities like Billings, counties like 
Yellowstone County, the State of Montana are all in better 
financial shape than the Federal Government. In fact, Montana 
is still in the black because we are conservative, and we like 
our natural resource development, something that other States 
don't participate in.
    And so, the question is if Montana is in better fiscal 
condition and our counties and our cities, why is the Federal 
Government that is running the third year of over trillion-
dollar deficits and building debt like crazy getting involved 
in a State project like the State Paid Leave Fund?
    Secretary Solis. Mr. Chairman, this particular fund really 
addresses, a need that affects many families these days. It is 
really addressing work-life balance, which is a priority of 
this Administration. And the policies such as State Paid Leave 
would help to provide grants for those States that want to 
begin to address this issue.
    Mr. Rehberg. But the question is, is that a Federal 
responsibility?
    Secretary Solis. It is actually----
    Mr. Rehberg. At a time when we don't have the money, but we 
are running a deficit.
    Secretary Solis. Well, there are some benefits to the 
program. Because many businesses find that if they are able to 
create better flex work schedules for their employees, they 
will stay longer. They will be more productive, and I think 
everybody is happy.
    You have got people now that have to take time off to take 
care of their elders or their children----
    Mr. Rehberg. I am happy. You are happy. But that doesn't 
make us able to afford a State program. Clearly, a State 
program. Why does the Federal Government need to be involved in 
that?
    Secretary Solis. This is a priority of the Administration 
to address the issues of family life balance, and it is a big 
issue because we know that there are many people that need to 
take time off, as I said earlier, to take care of a loved one 
or an injured family member or, say, a new adopted child or a 
woman that perhaps just gave birth and needs to take time off.
    And if she has had time working at that particular place 
and she is a good staff person, I am sure that the employer 
would want to work out a situation so that she could return and 
take time off as needed. This is a big issue that has been 
going on and discussed for many, many years. And it is an issue 
for us because we believe that there should be a fair balance 
in the workplace.
    And of course, it is not mandating anything. It is 
available to those States that want to apply.
    Mr. Rehberg. Thank you.

                          RETURN ON JOB CORPS

    I might point out really quickly because we can all do 
math, and the reason we were flurrying back here is because 
none of our calculators could work that quickly. But to carry 
Ms. DeLauro's point a little bit further, 80 percent success in 
the Job Corps. That makes it .032 percent. That is not a very 
good return on investment when it comes to the $2,000,000,000 
we are spending in Job Corps.
    My time is up. Ms. DeLauro.

                           DEFICIT REDUCTION

    Ms. DeLauro. Well, thank you, Mr. Chairman. But let me just 
go back a second and just mention this to you. I think it is 
very interesting to note, as you opened the door on this issue, 
that Montana got $5,500,000,000 in subsidies, and we are 
looking at wheat subsidies, Conservation Reserve Program, 
disaster payments, barley subsidies, livestock subsidies, 
Environmental Quality Incentive Program, corn subsidies, wool 
subsidies, dried pea subsidies, dairy program subsidies.
    Now you reference the fact that I was chair of the Ag 
Appropriations Committee, and yes, I worked on these efforts. 
But I am going to turn around and say we can do this, but we 
can't provide the opportunity for young people to go to school?
    Mr. Rehberg. Madam Chair? Ranking Member, would you yield?
    Ms. DeLauro. Well, yes, only if I can get the time back.
    Mr. Rehberg. Well, I yielded to you and Mrs. Lowey, and I 
didn't take my time back.
    Ms. DeLauro. Fine. Yes. I am happy to do that.
    Mr. Rehberg. Okay. Well, the point is everything is on the 
table, and Conservation Reserve Program, CRP, needs to be on 
the table. Everything needs to be on the table.
    If we are going to try and bring this country out of the 
brink of disaster of debt and despair that seems to occur as a 
result of the fact that our economy has not turned around, then 
everything needs to be on the table, including the subsidies 
you are talking about.
    Ms. DeLauro. Well, I suggest to you, Mr. Chairman, that, in 
fact, when H.R. 1 did what it did in terms of trying to cut 
$60,000,000,000 or $61,000,000,000, as I said in my opening 
statement, it did nothing about attacking the $40,000,000,000 
we provide for a subsidy to a special interest, and that is 
called the oil industry.
    It did nothing about $8,000,000,000 in agricultural 
subsidies. It did nothing about almost $8,000,000,000 to 
multinational corporations that take jobs overseas, and there 
probably are a couple of others. And you know what? When you 
add that up, it comes to almost over $60,000,000,000, which we 
could have found before we begin to attack programs that affect 
families with children, the elderly, and people's education 
opportunities.
    Let's create a balance here. We do have to get out of this 
hole, but it is not going to be just on the backs of 12 percent 
of this budget and when other things are no longer on the 
table. I didn't see agricultural subsidies come forward with 
this, with what we are talking, $5,500,000,000 in subsidies to 
one State, in addition to which 56 percent of the farmers in 
Montana do not collect a subsidy, 10 percent collect a subsidy.
    I venture to say is let's take a look at what the income 
levels of those folks are. Nothing has been said from the other 
side of the aisle about that. Folks who put this H.R. 1 
together are the very same people who would say let us extend 
the tax cuts to the richest 2 percent of the people in this 
country.
    The question of deficit reduction is where you start? And 
it should not be on the backs of people trying to make a 
living, who are going back to school to find out if they, in 
fact, can increase their skill level to get a job, and families 
with children who are just trying to make it.

                    EFFECT OF H.R. 1 ON WIA PROGRAMS

    Madam Secretary, can you compare and contrast what your 
fiscal year 2012 budget request would do for Workforce 
Investment Act programs with the majority's proposal in H.R. 1? 
Can you tell me how many job seekers accessed the array of WIA 
programs this past program year?
    If H.R. 1 is passed, which will eliminate WIA formula 
programs to provide job training and employment-related 
assistance, and that is for adults, dislocated workers, and 
youth, where will these job seekers be able to turn for help in 
an economy with 8.9 percent unemployment? What will be the 
impact of these cuts on job seekers? How many will be left out 
in the cold?
    I truly do want to see the numbers, Madam Secretary, 
because I think those numbers ought to see the light of day.
    Secretary Solis. Thank you, Congresswoman DeLauro.
    What I would say to you is that we typically service about 
29 million people through our One-Stop centers. The impact 
would be devastating to those services, which are not just job 
placement, but also opportunities for other services that are 
coupled around those One-Stop centers.
    In fact, we wouldn't be helping those veterans that are 
coming home that we made a commitment to, I believe in the 
Congress to see that these people were found places of 
employment. Those people that do go through our programs, it 
has been said earlier that about 60 to 70 percent of those 
individuals do find employment after they go through 6 months 
of our training programs. And if they stay longer, the 
percentage is higher.
    But in this very bad situation right now, in the crisis, as 
was stated earlier, you have got almost five people applying 
for one job. And until we start to see the turnaround and 
businesses expending money out so that they can bring on 
individuals, then we are going to be in a very competitive 
situation.
    And I know that it is very difficult for people to 
understand just how important it is that we have training 
assistance available for youth, for dislocated workers, and in 
particular, the folks that Congresswoman Lee talked about and 
yourself, the 99ers, who in many cases are very well qualified. 
It is a very competitive market. We still continue to see that 
we are not recovering as quick as we want to, but I will say 
that we did add 1.3 million private sector jobs this last year, 
and that was a turnaround from 2 years ago.

                   DUPLICATIVE JOB TRAINING PROGRAMS

    Ms. DeLauro. Thank you, Madam Secretary.
    Mr. Rehberg. Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.
    I represent a congressional district that the USDA tells us 
just on a rural crop basis, the variety of crops, that we have 
the largest agricultural district in the entire Nation. And I 
believe in being fair, but last year during the markup of our 
ag bill, I offered an amendment that would take $1,000,000,000 
from the conservation program, and my chairman wouldn't accept 
it. So I believe in going after all programs that we think are 
a waste, including some that might hurt me politically.
    The reports tell us that there are about 40 different 
programs under your jurisdiction that offer job training. Are 
we doing anything to try to make sure that there are not 
duplicative programs that are wasting money?
    I mean, I understand that there is a need to work with 
employers out there and make sure that they have qualified 
employees to work for them. But are we spending money 
unnecessarily in places that it might be wiser if we take 
another look at it?
    Secretary Solis. Congressman Alexander, I think it is 
important to note that many of the programs that have been 
established that work through the Department of Labor, through 
WIA, the Workforce Investment Act in particular, have been 
established over time to address the issues for including some 
different population. So we have youth. We have efforts for 
dislocated workers. We have programs for veterans and things of 
that nature. So the funding streams are very different.
    What we try to do, though, is make sure that we are 
coupling and not duplicating. That we centralize and that we 
are really looking at being more efficient. Since I have been 
Secretary at the Department of Labor, I have insisted that we 
do audits of our program and that I get a report to tell me 
exactly what our performance is and where we are falling short 
and where we need to do better.
    I am not happy that many of our participants may not have 
the ability to go on after getting a GED, for example, in the 
Job Corps program. Many have to find a job right away, and they 
will get a certificate, say, in a trade, and they will go right 
off to work. My hope would be that they continue to get more 
education because the better opportunities are available to 
those that have higher education and who have an ability to 
compete more.

                           PROGRAM EVALUATION

    We are looking at evaluating ourselves. That is why we are 
hiring and we have hired and brought on an evaluator to look at 
all of our programs so that we can project in a period of time 
how well we are doing and to try to make sure that we 
streamline. That is why we put forward this innovation program 
that takes money from the top to see how we could look inside 
of ourselves and hopefully better direct how our programs are 
working.

                          WIA REAUTHORIZATION

    And I think that goes to the point of trying to get WIA 
reauthorized because there are a lot of complaints about the 
system of WIA that has been around for more than a decade. It 
has to be worked on and I know that on the Senate side, there 
is bipartisan support to move a bill. I would hope that on this 
side, we could do the same because people are suffering. We 
need to be more agile and better equipped to get those 
resources to the right people.
    And because of some formula fundings, in many cases, it is 
not that easy to do. And States then also factor in what their 
decisions are, where they would like to see initiatives. That 
doesn't always come together smoothly in the way that we would 
like to, and some States do a better job than others.
    Mr. Alexander. Thank you.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. Thank you.
    Since we are probably coming to a close in this hearing, I 
would like to acknowledge the hard work you are doing. And 
these programs, Mr. Chairman, I understand, are not on the 
chopping block, and I want them to stay off the chopping block.

                         STATE PAID LEAVE FUND

    We know how tough it is for workers in this economy, and it 
is really shocking that more than 50 percent of American 
workers do not have one paid day if they are sick. Restaurants, 
I mean, you don't want people serving you if they are coughing, 
but they don't have a paid sick day.
    So either people go to work to get paid, to support the 
family, or they stay home to take care of themselves. And we 
have paid sick days. Staff has paid sick days. We should be 
doing more in this area, and I just wanted to commend you for 
your initiative. This is really a problematic issue, and I want 
to thank you.
    Ms. DeLauro. Would the gentlelady yield for one second?
    Mrs. Lowey. I would be delighted to yield.
    Ms. DeLauro. I just would add to that because it is a very, 
very relevant point. Most of those 50 million people are 
employed in private sectors jobs, unlike us. We have the 
opportunity to take days off. These folks can't. And 
oftentimes, they lose their jobs if they do or----
    Mrs. Lowey. I want to thank you, and it is really 
problematic. So I am sure we all agree.

          COMMUNITY COLLEGES AND CAREER TRAINING GRANT PROGRAM

    Secondly, I want to congratulate you on requesting 
$500,000,000 for the Community College and Career Training 
Grant Program. I have two community colleges in my district 
that have outstanding career training programs for dislocated 
workers to find jobs in high-wage, high-skill occupations, and 
this is really important.
    And I want to emphasize again, because I visit those 
community colleges, so many of the kids struggle, which goes 
back to our discussion about Pell grant. And if they lose $845 
dollars--many of them are first generation--they can't go to 
mom or pop and say, ``Can you help me?'' They really will lose 
out.
    So if you can just tell us in the little time we have 
remaining how you envision this program helping dislocated 
workers, and I really appreciate your creativity for putting 
this program together.
    Secretary Solis. Thank you, Congresswoman Lowey.
    This is a partnership between the Department of Education 
and the Department of Labor. The first round of grant 
solicitations went out about 3 weeks ago, and the first amount 
is about $500 million.
    Each State can apply, and they can receive, at a minimum, 
$2.5 million. And what we are asking for here is really a 
collaboration. The partnership has to be a community college 
and industry, and it can include other service groups, too. It 
can also help to identify populations that are really 
struggling.
    And it would hopefully build into capacity building at 
community colleges as well because, as was alluded earlier, it 
is tough to get into these nursing programs. I saw it myself, 
visiting the Sacramento Community College program that had a 
waiting list of 4 or 5 years. And yet it is a high-impact area 
where we need to have more nurses, as opposed to bringing in 
folks from abroad.
    So, yes, it makes sense. It also makes sense to help create 
more opportunities for technicians, for people in the light 
technology area that don't necessarily have to have an advanced 
bachelor of science, but could get a community college degree 
and, say, become very capable of working on these new programs 
that require computer skills, for architectural design and 
engineering.
    These are very highly paid positions and jobs that are 
available, and we have a shortage. That is the first thing I 
hear from employers. ``I don't necessarily need an engineer, 
Secretary. But I need someone who can come in agilely and be 
able to have a good certificate that tells me they are 
qualified and be able to take on these new responsibilities.''
    And that goes to the whole notion of creating green, 
renewable energy jobs, looking at that sector and trying to 
conserve and come up with biofuels and other types of 
incentives so we can create solar panels here, wind turbines, 
and things that are already being done now. And many of them 
are taking place at community colleges.
    So it is a way of expanding it through this particular 
funding source.
    Mrs. Lowey. I really want to thank you for that, and we are 
on yellow. And I just have to give you a specific example that 
I was talking to people just this week. The wife works as a 
beautician, does nails. The husband is an architect, a trained 
architect. He is working in the pizza parlor across the street 
because he cannot find a job.
    And I just had this discussion with him, but he said, ``How 
can I go to community college? How can I afford to even go 
there?'' And their salaries are a fraction of what a 4-year 
college costs today. So I was trying to give him advice, but I 
didn't have much good advice because on pizza parlor salary and 
a beautician, it is pretty hard to even go to the Westchester 
Community College.
    Secretary Solis. Tell him to go to our online toolkit that 
we have, myskillsmyfuture.org. And that will be helpful for 
that person, and we will be happy to work with him.
    Mrs. Lowey. Thank you. I will do that.

      2008 EVALUATION OF THE ADULT AND DISLOCATED WORKER PROGRAMS

    Mr. Rehberg. Madam Secretary, your justification material 
makes repeated references to the 2008 evaluation of the Adult 
and Dislocated Worker Programs. Referring to the adult program, 
it says, ``Regardless of services received, there is a several 
hundred dollar increase in quarterly earnings.''
    It is a good sound bite, but that is not an accurate read 
of the study. When it comes to the training component, not the 
core or intensive services, this study actually found that 
adult program participants who obtained training services have 
lower initial earnings than those who don't receive training 
services, but they catch up in 10 quarters. I suppose it is 
good news that they catch up 2\1/2\ years later.
    Let us talk about the dislocated worker program for a 
minute. Again, your justification seems to cherry-pick data 
points from the impact study, saying there was a statistically 
significant impact on employment and earnings. One only need 
read a bit further to find the more critical conclusion.
    ``Estimates''--and this is their quote. ``Estimates imply 
that program participants' earnings do not reach the level of 
earnings of comparable nonparticipants until more than 2 years 
after participation. Estimates of effects on earnings and 
employment 3 to 4 years after program entry show little 
evidence that training produces substantial benefits.''
    And finally, they said, ``Overall, it appears possible that 
the ultimate gains from participation are small or 
nonexistent.''
    So, Madam Secretary, I am at a loss for what to believe. As 
this budget requests another $3,000,000,000 for these programs, 
are we left with a rather scathing review of the near and long-
term effectiveness of the program. So I have to ask what are 
your thoughts on spending another $3,000,000,000 on programs 
that, one, still sitting on $1,000,000,000 in unspent stimulus 
funds; two, you are sitting on an additional $1,900,000,000 in 
carryover funds; and, at least by this study, shows little 
evidence that training produces substantial benefits?
    Secretary Solis. Mr. Chairman, what report are you 
referring to?
    Mr. Rehberg. It was the----
    Secretary Solis. Because I am not aware.
    Mr. Rehberg. Yes. It was called the----
    Secretary Solis. And what year was it done?
    Mr. Rehberg. 2008.
    Secretary Solis. Okay. All right. I guess we can talk about 
that.
    Mr. Rehberg. It was IMPAQ International Workforce 
Investment Act Non-experimental Net Impact Evaluation--Final 
Report.''
    Secretary Solis. Okay. I am not familiar with that report. 
But I will tell you that for the latest data available from my 
agency, for June 2008 and June 2009, 85 percent of workers 
exiting Workforce Investment Act, WIA, dislocated worker 
training and 82 percent of workers exiting the WIA adult worker 
training found a job within 1 year.
    And I think that is commendable because given the fact that 
you still have five people to one job, it is still very, very 
important to be able to have these programs available. Those 
people that go through our programs are more likely to get the 
job than the person who has never even entered into our system. 
And that is a fact.
    Mr. Rehberg. Madam Secretary, are you suggesting you 
haven't seen the study? Because it is the only known study that 
has been done, and it actually is sitting in the Department of 
Labor, this study.
    Secretary Solis. I am sorry. Who did the study?
    Mr. Rehberg. The Department of Labor.
    Secretary Solis. I don't have--no.
    Mr. Rehberg. Okay. Well, I might suggest that----
    Secretary Solis. What year?
    Mr. Rehberg. December 2008.
    Secretary Solis. 2008. I started in 2009.
    Mr. Rehberg. Okay.
    Secretary Solis. Okay, that was the previous 
administration. So I gave you the latest data I have for my 
programs.
    Mr. Rehberg. But the facts don't change from the report.
    Secretary Solis. Yes, they do. I just told you. So if you 
would like, I can also make sure that my Assistant Secretary 
comes and relays the most recent information and data that we 
do have.
    [The information follows:]



    
                     INITIAL GRANTS FOR GREEN JOBS

    Mr. REHBERG. In my time remaining, if I might, I want to go 
back to the initial grant in the green jobs--well, I have lost 
my page, but in the green jobs section, if I heard you 
correctly in the first question I asked, you suggested that you 
are giving grants out that do not have to have a labor 
component?
    Secretary Solis. That is not a mandate, right. I mean, 
anybody can apply. That is how we view these competitive 
grants.
    Mr. Rehberg. Okay. I guess I am confused because I am 
actually looking at the language that says by law there has to 
be a labor component.
    Secretary Solis. It has to include a business or an 
employer. I mean, that is a part of----
    Mr. Rehberg. Well, a business or an employer is the same 
thing. So does it have to require a labor component in the 
grant?
    Secretary Solis. It is acceptable, yes.
    Mr. Rehberg. Is it a requirement? Is it a law?
    Secretary Solis. I don't know that it is a law. It is a 
business labor partnership. That is what we call it.
    Mr. Rehberg. Okay. All right. I am going to, for the 
record, then ask a question so I can get an answer as to 
whether grants have been given out that do not have a labor 
component affiliated to that grant. And I will just do that by 
question.
    [The information follows:]

                    Green Jobs Training Partnership

    The Employment Training Administration funded Green Jobs-focused 
grants using Recovery Act funding through five specific Solicitations 
for Grant Applications (SGA): Green Capacity Building, Energy Training 
Partnership (ETP), State Energy Sector Partnership (SESP), Pathways out 
of Poverty (PATH), and State Labor Market Information Improvement 
(LMII). The partnership requirements applied to the three grants that 
focused on green industry training and extended to both employers and 
labor organizations, but not specifically to unions. For the ETP SGA, 
national labor-management organizations with local networks were one of 
the eligible applicant types, and labor organizations were a required 
partner. For the SESP SGA, labor organizations (including labor-
management training programs) were a required partner. For the PATH 
SGA, labor organizations (including but not limited to labor-management 
organizations) were a required partner. The State LMII and Green 
Capacity Building SGAs did not require that applicants include labor 
organizations as partners.

    Thank you.
    Mrs. Lowey? I am sorry, Ms. DeLauro? And then we will go to 
Mr. Flake will be the last. We are closing now. We have had 
many different rounds.
    And just for the audience's benefit, quite a few of my 
Members on this subcommittee are subcommittee chairmen in other 
subcommittees, and it is not for a lack of interest in the 
topic at hand. It has nothing to do with you personally. They 
have just been very busy chairing other meetings.
    Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman.

            WORKER MISCLASSIFICATION--WAGE AND HOUR DIVISION

    Madam Secretary, you mentioned in your testimony that the 
department has an initiative related to worker 
misclassification. Meaning, I believe, that people who an 
employer tries to claim are independent contractors, but who 
are really employees. I understand that the budget increase for 
the Wage and Hour Division in particular is targeted to that 
initiative.
    Can you tell us why you believe worker misclassification is 
a serious problem that merits priority attention? For the 
workers, we are talking about consequences like the loss of 
unemployment and workers compensation coverage, loss of rights 
to overtime pay and minimum wages, and loss of employer 
contributions to Social Security. Isn't that what can happen?
    Secretary Solis. Yes, absolutely. Yes.
    What we are attempting to do here is try to go after those 
individuals that inappropriately misclassify their employees as 
independent contractors. We are not saying that being an 
independent contractor is wrong or anything, but there have 
been many abuses where actually the worker is doing similar 
work that other employees are doing, and yet they are being 
robbed, actually, of, say, any benefits.
    When they do become unemployed, they are not able to draw 
that down. We lose out on the tax revenue as well. So local 
government is also affected. And we feel that it is a serious 
concern, and it has been talked about for many years. And it is 
a way for us to begin to look at this issue because we have 
gotten a lot of complaints.
    And we were criticized very heavily by the Government 
Accountbility Office, GAO, years back because we were not 
following up on complaints like this and others where there 
have been wage theft and other injuries, say, to workers in the 
workplace.
    Ms. DeLauro. And my understanding as well is that a number 
of States are interested in cooperating with what you are 
doing----
    Secretary Solis. Yes. Yes.
    Ms. DeLauro. [continuing]. To protect the unemployment 
insurance and those compensation funds. Is that right?
    Secretary Solis. Absolutely. And it is an initiative 
because, again, the State revenue doesn't come in if employees 
are not appropriately classified. Or if they are put out as 
independent contractors. So that is a problem that exists, 
especially, I would say, in some of the lower-wage areas and 
sometimes even in the telemarketing area.
    Ms. DeLauro. Great. Thank you.

                             2008 FARM BILL

    I want to just correct something for the record. My 
colleague Mr. Alexander isn't here, but I did want to follow up 
on his comment about the conservation program. In terms of 
recollection, just to make sure that the cuts were being made 
to the right programs and that we were concerned with the 
amendment and what programs it was cutting.
    Plus, in addition to which the amendment addressed problems 
that existed prior to the 2008 farm bill, problems that were 
reformed in the 2008 farm bill. So, quite frankly, the issue 
had been addressed and corrected, and it didn't make sense to 
cut before the reform had a chance to be implemented.
    And those folks who are very interested in the farm bill 
were not willing to reopen that again.

                              MINE SAFETY

    I talked earlier about the mine safety issue, which has 
always been a real interest to me. You talked about the problem 
with the backlog. But let me just ask you in terms of your 
budget, in terms of improving mine safety and health, what is 
the 2012 budget doing to implement measures and what might 
those measures be in terms of assisting with mine safety here?
    Secretary Solis. Well, what we are looking at also, 
Congresswoman DeLauro, is helping to provide a better stream of 
regulations so that miners and operators will be fully aware of 
the kind of changes that have to take place so we won't see 
another Upper Big Branch explosion, and also try to mitigate 
those backlogs. Because we found that many operators are able 
to kind of game the system and block whenever there is a 
citation that is brought before them, which tends to create a 
long backlog and makes it incredibly hard to resolve these 
issues.
    That is why we need help from our budget to do just that. 
But there are other things that we want to do as well. We want 
to try to consolidate some of our operations and decentralize 
when needed.
    So, for example, the small business mines--I mean the small 
mines that we have to oversee, we had an exclusive division 
just set aside for that. What we are going to do now is put 
that in all of our regional offices because it is kind of the 
boots on the ground theory that they can go out and do a better 
job of evaluating those programs and making sure that they are 
addressed.
    Mr. Rehberg. We have about 6 minutes left.
    Ms. DeLauro. Thank you.
    Mr. Rehberg. If I could ask Mr. Flake to keep it at about 3 
and Mr. Lewis to keep it about 3, we will finish on time.
    So, Mr. Flake.

                               STAPLE ACT

    Mr. Flake. Madam Secretary, good to see you.
    Secretary Solis. Good to see you.
    Mr. Flake. Just a question. The President talked in his 
State of the Union address about the problem we have where we 
educate so many foreign-born students, and then we turn them 
away, too few visa slots to keep them here. That has been a 
concern of mine for quite a while.
    If you look at those receiving Ph.D.s in the STEM fields in 
our U.S. universities, about 60, 65 percent are foreign born. 
And yet then we say to far too many of them, we have educated 
you, now we are going to send you to compete against us. And 
when you look at Silicon Valley, about 50 to 60 percent of the 
startup firms there were started by foreigners.
    In my view, we ought to roll out the red carpet for anybody 
with a Ph.D. in those fields to stay here and work, and I have 
introduced the STAPLE Act, which basically means you staple a 
green card to a diploma of anybody receiving a diploma in those 
fields. That seems to be what the President is talking about. I 
have had discussions with the White House on this. Senator 
Schumer has similar legislation in the Senate.
    How does your agency view that kind of legislation? What 
can we do to make sure that those who would help create jobs 
here in the U.S. are allowed to stay here?
    Secretary Solis. Well, this is a priority for the 
administration. So we would look forward to working with you 
and providing any assistance you might need from our staff as 
well to look into it.
    I know that this is something that is a high priority for 
the President himself, serving with other members of the 
Cabinet on the Export Council where this has come up quite a 
bit. So I am well aware of it. I agree that it is something 
that we need to work on, and I think this may be an appropriate 
environment now to see something like that move.
    Mr. Flake. Thank you.
    Just for the record, I know before I came in something was 
brought up about Republicans resisting cutting farm subsidies. 
Some Republicans are willing to cut any subsidy, any farm 
subsidy that is brought up and have moved to do so.
    Ms. DeLauro. You have been consistent, Mr. Flake.
    Mr. Flake. Thank you. [Laughter.]
    Mr. Rehberg. Thank you, Mr. Flake.
    Just for the record, Madam Secretary, to help you out, even 
though this study pre-dates you and your staff seems to be 
confused to where it is within the department, I have got your 
budget justification, and you refer to this very study in your 
budget justification.
    Mr. Lewis.
    Mr. Lewis. Thank you, Mr. Chairman.
    Mr. Flake and I may end up being partners on this issue as 
he goes to another body and where I feel very strongly about 
exactly the same thing.
    Welcome, Madam Secretary. I am sorry that I had a 
conflicting meeting, and the Secretary of the Army insisted I 
stay a while.

                        WORKFORCE INVESTMENT ACT

    But in the meantime, the entire area of the Workforce 
Investment Act and where it works and where it doesn't seem to 
be working is of concern to me. In my own region, there are 
people who have put together this effort that seems to work 
very effectively, where there is job training and linkage to 
employers who can use their skills, et cetera. It is kind of 
what the design was all about.
    And yet, in California, and I guess across the country, we 
have had considerably different experience. That article 
recently in California regarding what has been going on or what 
has been a circumstance in and around Fresno, California, where 
there are very high levels of unemployment, ranging from like 
15 percent of my own region. But up there, as much as 40 
percent. And yet jobs available, and there is not a linkage.
    I am concerned that within the implementation of the 
Investment Act across the country, very, very sizable 
percentage of locations, there is this disconnect. Some job 
training potentially available, but not a mechanism whereby we 
can link to the employer who can use those skills.
    And it is not very hard to develop the computer software to 
achieve much better results. Could you comment on that?
    Secretary Solis. I agree with you. I have heard that 
concern in my travels around the country, and I know that this 
might be an appropriate time for us to look at reauthorizing 
the Workforce Investment Act, WIA, because I do believe that it 
does work in certain places more efficiently than it does in 
others. And I think the key is having good partners with the 
business community and coupling that with community colleges in 
many instances and also other programs where you can make sure 
that there is a seamless pipeline that once you get training, 
you can get access to that job.
    And hopefully, the individuals--in some cases, the employer 
that is seeking the kind of employee they need--will have more 
participation in the actual setup of the program and 
curriculum. And that is something that we are seeing and that 
we are pushing for right now, even with the funds that we have.

                         TAA COMMUNITY COLLEGES

    There is a new grant that is becoming available, the Trade 
Adjustment Assistance, TAA, community college. The focus is the 
community colleges, and I know that would greatly benefit 
sectors like yours and in Fresno. Because I also had a 
conversation with the Mayor of Fresno, who tells me also that 
they need to have better job training, that there aren't any 
jobs, number one. So, therefore, we have to look at what jobs 
are going to be growing.
    Healthcare is one of them. IT, computers, renewable energy, 
things of that nature, I think, are appropriate. And right now, 
many of our community colleges, as you know, are under 
tremendous budget constraints. So this additional resource 
would be very helpful for them.
    Mr. Lewis. Thank you, Mr. Chairman.
    Mr. Rehberg. And thank you, Madam Secretary.
    Meeting adjourned.







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