[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 6
                                                                   Page
 Improper Payments................................................    1
 National Labor Relations Board...................................  111
 Department of Labor Job Training Programs........................  175
 Examining Fragmentation and Overlap of Federal Education Programs  333
 United States Department of Labor................................  377

                                   S

                                ________

         Printed for the use of the Committee on Appropriations



  PART 6--DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION,

              AND RELATED AGENCIES APPROPRIATIONS FOR 2012
                                                                      ?

                 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 6
                                                                   Page
 Improper Payments................................................    1
 National Labor Relations Board...................................  111
 Department of Labor Job Training Programs........................  175
 Examining Fragmentation and Overlap of Federal Education Programs  333
 United States Department of Labor................................  377

                                   S

                                ________
         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 72-340                     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 JerseyJOSE 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 17, 2011.

                           IMPROPER PAYMENTS

                               WITNESSES

ELLIOT P. LEWIS, ASSISTANT INSPECTOR GENERAL OF AUDIT
DANIEL R. LEVINSON, INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND HUMAN 
    SERVICES
KATHLEEN S. TIGHE, INSPECTOR GENERAL, DEPARTMENT OF EDUCATION
PATRICK O'CARROLL JR., INSPECTOR GENERAL, SOCIAL SECURITY 
    ADMINISTRATION
    Mr. Rehberg. Good morning. I apologize for the timing. As I 
think you have been informed, we anticipate a vote at 10:15 
a.m. And so, what we will do is we will stay here until about 5 
minutes left on the vote, so 10 minutes into the vote. 
Hopefully, that will take us to about--if it is at 10:15 a.m.--
take us to about 10:25 a.m.
    We will go over and vote. We have two. I anticipate a 15 
and a 5, which never works out that way, and we will get back. 
And we will just suspend the hearing, and then we will get back 
as quickly as we can so we can have as much time with you.
    I will end the meeting at noon, at 12:00 p.m. And so, if I 
could ask you to if at all possible to summarize your opening 
statement, just as, one, a courtesy to the rest of you and, 
two, so that we will have more time for questioning, that would 
be very helpful.
    So we normally go in order of the titles of the bill. I 
think you have been informed of that as well. So, Mr. Lewis, we 
will start with you.
    Oh, I am sorry. Ms. DeLauro.
    Ms. DeLauro. Thank you. That is fine. Thank you, Mr. 
Chairman, again.
    And happy St. Patrick's Day to all.
    I want to thank today's panelists for coming to testify 
before us this morning. I think everyone in this room agrees 
that our Government should be as efficient as possible, and I 
know that the Administration has made improving program 
integrity and reducing improper payments a very high priority.
    And to that end, the administration has moved aggressively 
with a vigorous effort to ferret out waste, fraud, and abuse. 
The President has signed an Executive Order 13520 to this 
effect. It requires that improper payments be reduced by 
intensifying efforts to eliminate payment errors, waste, fraud, 
and abuse in the major programs that are administered by the 
Federal Government, while continuing to ensure that the Federal 
programs serve and provide access to their intended 
beneficiaries.
    And to help implement it, this Congress included 
$37,500,000 in the 2010 Consolidated Appropriations Act. The 
funds also establish a Partnership Fund for Program Integrity 
Innovation, helping States to create pilot projects to reduce 
improper payments without reducing participation among eligible 
populations. And every project must save at least as much as it 
costs.
    And I see for the first time, we have tried to dedicate 
discretionary funds to fight waste, fraud, and abuse. The 
subcommittee has focused on these issues. The bill that 
reported out by the Labor-HHS, this subcommittee, last year 
included three major program integrity initiatives totaling 
$1,400,000,000--an 89 percent increase above the level 2 years 
earlier--in the areas of healthcare, Social Security, and 
Unemployment Insurance.
    The bill also took specific steps to respond to reports by 
the GAO concerning possible fraud in some of the discretionary 
programs at the Department of Health and Human Services' 
Administration on Children and Families. The bill responded 
with $7,500,000 for the Inspector General to conduct 
comprehensive audits in those areas, funds to the program 
offices for better monitoring of grantees, a requirement that 
the Secretary report quickly concerning the steps that she was 
taking to address the GAO's concerns.
    My hope is that our subcommittee will continue this 
commitment to taking concrete steps that will actually improve 
program integrity.
    Unfortunately, right now, this Congress seems to be going 
in a different direction. We are going to hear today about 
problems of improper payments at Medicare. Yet even as the 
number of Medicare beneficiaries is rising, H.R. 1, the 
majority's appropriations bill that passed the House last 
month, cuts appropriations for Medicare and Medicaid operations 
by $458,000,000, or 13 percent below last year.
    This is a reckless cut, in my view, that will stop any 
progress on reducing fraud and improving payment accuracy dead 
in its tracks. The Center for Medicare Services will have a 
hard enough time just paying bills on time for services to 
Medicare patients by doctors and hospitals. Under the 
majority's budget, they will have very little chance to 
actually pay attention to and review what it is they are 
paying.
    Similarly, as a result of increased need during the 
recession, Social Security has a large backlog of claims for 
disability benefits. Families are waiting for resources they 
both need and deserve.
    But the resolution cuts funding for the Social Security 
Administration by over $1,000,000,000 below the President's 
request. That means less staff, probably furloughs, even bigger 
backlogs, less chance to detect fraud and improve accuracy.
    In the end, denunciations of waste and fraud are not 
enough. Adding more rules is not enough. Addressing problems of 
improper payments requires careful attention from skilled 
people who can scrutinize claims to look for troubling patterns 
and to make sure systems are working correctly. You cannot 
furlough workers and reduce the size of the workforce and 
expect to get better results in program integrity.
    We should also be focused not just on social insurance 
programs. There may be a tendency to concentrate on Social 
Security, Medicare, and UI because they are large and, 
therefore, produce dramatic numbers and because techniques are 
available for measuring payment accuracy rates. But we also 
need to be looking at other places where waste and inefficiency 
abounds, like Federal contracting. We ought to try to take a 
look at defense contracts as well.
    Spending on contractors increased at an average rate of 12 
percent per year between 2000 and 2008. Yet many agencies 
seemed to have little idea how many contract personnel were 
actually working for them or what they were all doing. The 
administration and the last Congress had been working to get a 
handle on those expenses and bring some rationality to the 
process. I hope those efforts will continue.
    We also need to look at our tax system, the billions of 
dollars in tax revenues that are being lost through tax 
avoidance schemes, poor enforcement, companies that set up tax 
accounts overseas with the opportunity to limit their financial 
tax obligations to the United States.
    In everything we should do, we should not just be looking 
at the little guy, but let's look at the large corporations, 
wealthy individuals who are gaming the system. No one should be 
allowed to commit fraud. No one should be getting more than 
they are supposed to. But in a time of limited resources, good 
business sense argues for concentrating our efforts where the 
biggest possible savings might be achieved.
    I thank you again, and thank you, Mr. Chairman, as well. I 
look forward to your testimony.
    Mr. Rehberg. Thank you.
    Mr. Lewis.
    Mr. Lewis. Good morning, Mr. Chairman and Members of the 
subcommittee. Thank you for inviting----
    Is it on now? Okay.
    Good morning, and thank you for inviting me to testify 
today in my capacity as the Assistant Inspector General for 
Audit at the Department of Labor. I am pleased to discuss 
improper payments in the Unemployment Insurance program.
    Recently, both the Administration and Congress have placed 
renewed focus on eliminating improper payments in benefit 
programs, such as UI. Pursuant to Executive Order 13520, OMB 
has designated UI as one of 14 high-error programs in the 
Federal Government.
    For 2010, DOL reported an 11.2 percent improper payment 
rate, which represents $16,500,000,000 in overpayments and 
$936,000,000 in underpayments. Consistent with the committee's 
request, I will discuss OIG's audit oversight work in the UI 
program.
    In 2003, OIG first audited the Benefit Accuracy Measurement 
program, or BAM, which is the Department's means of monitoring 
the accuracy of unemployment benefits. At that time, we found 
that the BAM generally identified and projected improper 
payments accurately. However, we identified the need for 
improved detection of benefit payments to workers who had 
returned to work, which is still the primary cause of UI 
overpayments.
    The OIG recommended ETA expand the use of the National 
Directory of New Hires to all States as a tool to identify 
overpayments early in the process, thus potentially preventing 
losses of unemployment funds. The National Directory is a 
consolidated database maintained by the Department of Health 
and Human Services that contains information on persons who 
have returned to work.
    Our audit recommended that ETA revise its performance 
measurement system to give priority to measures aimed at 
preventing overpayments, use the BAM to identify trends, and 
work with States on initiatives to prevent overpayments. We are 
pleased to note that the Department is now planning to mandate 
that all States use the National Directory of New Hires.
    ETA has also made changes in its performance measures and 
now includes overpayment detection as a core measure for 
States, consistent with our earlier recommendation. We also 
note that recently passed legislation requires employers to 
report the first day of earnings for new hires.
    The OIG reviewed the Department's May 2010 report on 
improper payments, as required by the executive order. We found 
the Department's reduction plan did not include specific 
targets for preventing improper payments, sufficient details 
regarding meeting targets, or supporting analysis related to 
its integrity initiatives and their expected impacts. For 
example, five of seven initiatives focused primarily on 
detection rather than prevention.
    Mr. Chairman, our audit work in the UI program is 
continuing, given the overall increase in unemployment benefits 
over the past few years, the rising improper payment rate, and 
new statutory mandates in this area. One of the areas we are 
currently focusing on is the quality of data that States are 
reporting to the Department and its usefulness in preventing 
improper payments.
    In the year ahead, we have plans to conduct audits to 
evaluate the technique States are using to detect and prevent 
improper payments, how States assess the effectiveness of those 
techniques, and whether any States have best practices that 
other States should consider implementing. Additionally, we 
plan to look at the adequacy of systems operated by States to 
recover overpayments.
    In conclusion, Mr. Chairman, with 60 percent of States 
currently borrowing Federal unemployment funds to pay 
unemployment claims, the expenditure of more than 
$124,000,000,000 over the past three years for extended and 
emergency unemployment compensation, an increasing overpayment 
rate, and the current economic conditions, identification of 
overpayments is simply not enough. As we have previously 
recommended, the Department and the States must identify 
strategies not only to detect improper payments, but which 
successfully prevent them in the first place.
    I thank you, Mr. Chairman, for the opportunity to testify 
at today's hearing. I would be pleased to answer any questions 
you or other Members of the subcommittee may have.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    Mr. Levinson.
    Mr. Levinson. Thank you.
    And good morning, Chairman Rehberg, Ranking Member DeLauro, 
and Members of the subcommittee. My testimony this morning 
summarizes our recommendations to prevent improper payments in 
HHS's two largest programs--Medicare and Medicaid.
    Although our recommendations are tailored to specific 
vulnerabilities, the actions we recommend to CMS fall into the 
following four categories: increase prepayment and post payment 
review of claims, increase oversight and validation of 
supporting documentation, strengthen program requirements to 
address vulnerabilities, and provide education and guidance to 
providers.
    OIG has consistently recommended that CMS enhance both 
prepayment and post payment review of claims. For example, 
OIG's analysis of claims for diabetes testing supplies 
identified $270,000,000 in improper payments. Prepayment edits 
could have helped prevent improper claims for these testing 
supplies.
    We also have recommended increased oversight and validation 
of supporting documentation. We found that for 18 percent of 
Medicaid claims for personal care services, the provider's 
qualifications were not properly documented. This resulted in 
$724,000,000 in improper payments.
    In certain areas, CMS should strengthen program 
requirements to address program integrity vulnerabilities. For 
example, we have recommended that CMS establish a payment cap 
on chiropractic claims to prevent improper payments for 
maintenance therapy.
    Provider education is also critical to ensuring compliance 
and protecting beneficiaries. We found that 82 percent of 
hospice claims for beneficiaries in nursing facilities did not 
meet at least one Medicare coverage requirement, requirements 
that are in place to protect beneficiaries' health and well-
being.
    Medicare paid about $1,800,000,000 for these claims. We 
recommended that CMS provide hospices with guidance on the 
rules for certifying terminal illness and a checklist of items 
that must be included in the plans of care.
    For our part in provider education, OIG is conducting free 
training seminars in six cities to educate providers on fraud 
risks and share compliance best practices. We also recently 
published ``A Roadmap for New Physicians," which provides 
guidance on complying with fraud and abuse laws.
    Furthermore, we believe that error rates could be reduced 
by directing efforts to areas of recurring vulnerability, such 
as documentation deficiencies and providers with a history of 
claims errors. For fiscal year 2009, inpatient hospitals, 
durable medical equipment suppliers, hospital outpatient 
departments, physicians, skilled nursing facilities, and home 
health agencies accounted for 94 percent of Medicare improper 
payments. OIG plans to conduct additional analysis of the 
claims of individual providers with a history of claims errors.
    Although not all improper payments are fraudulent, all 
payments resulting from fraud are improper. And our efforts to 
combat fraud are achieving historic results.
    Just last month, OIG and DOJ strike forces engaged in the 
largest Federal healthcare fraud takedown in history. Teams 
across the country arrested more than 100 defendants in 9 
cities, including doctors, nurses, healthcare company owners, 
and executives. Their alleged fraud schemes involved more than 
$225,000,000 in Medicare billing.
    To prevent improper payments from depleting the Medicare 
Trust Fund, OIG refers credible evidence of fraud to CMS to 
implement payment suspensions, helping to turn off the spigot 
to prevent payment for fraudulent claims.
    Improper payments cost taxpayers billions of dollars each 
year. Executive Order 13520 states that the Federal Government 
must make every effort to confirm that the right recipient 
receives the right payment for the right reason at the right 
time. OIG is committed to this goal.
    Thank you for your support of our mission, and I look 
forward to answering your questions.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    Ms. Tighe.
    Ms. Tighe. Chairman Rehberg, Ranking Member DeLauro, and 
Members of the subcommittee, today I will quickly summarize our 
written testimony, focusing particularly on two program areas. 
The first of these areas is the Federal student aid program.
    In this area, I would particularly like to highlight a 
series of audits we issued on improper special allowance 
billings by lenders. A report of one lender, the National 
Education Loan Network, or Nelnet, found that the lender had 
improperly billed the Department for loans that did not qualify 
under a special allowance rate.
    We estimated that Nelnet had received about $278,000,000 in 
improper payments for the time period reviewed. And if the 
abuse was not stopped, an additional $882,000,000 of improper 
payments would be paid over the life of those ineligible loans.
    The Department concurred with our audit and ceased payment 
on that particular type of special allowance to 40 different 
lenders until independent audits were conducted. We worked in 
collaboration with the Department to develop a methodology to 
identify improper loans and also published a special audit 
guide to be used by the independent auditors.
    These audits, conducted over the next year, identified that 
90 percent of the loans billed to the Department were 
ineligible and, as a result, prevented well over $1,000,000,000 
in overpayments.
    Another area at risk of improper payments is within the 
elementary and secondary education programs. As part of our 
proactive efforts to assist the Department in enhancing 
internal controls at State levels prior to substantial amounts 
of recovery funding going out, we compiled a report on the 
pervasive fiscal issues reported in over 40 OIG audits of State 
and local education agencies.
    These audits collectively had identified approximately 
$62,000,000 in unallowable costs, $119,000,000 in inadequately 
documented costs, and $1,400,000,000 in funds determined to be 
at risk. These amounts were, in most cases, a direct result of 
internal control weaknesses, including a lack of adequate 
policies and procedures and a lack of understanding regarding 
program regulations and guidance.
    To address these weaknesses, we suggested that the 
Department enhance its guidance to State and local education 
agencies on how to implement the administrative requirements of 
Federal grants and ensure that they understood the importance 
of complying with the requirements. The Department developed a 
technical assistance plan and training for State and local 
education agencies that included issues we raised in our 
report, such as cash management, recordkeeping, and allowable 
activities.
    The report was also used by us to plan the first phase of 
our Recovery Act audit work of individual States that reviewed 
their systems of internal controls.
    Department officials have stated that they need to continue 
to explore additional opportunities for identifying and 
reducing potential improper payments and to ensure compliance 
with the new requirements embodied in the recently passed 
Improper Payments Act and the President's Executive Order. We 
are committed to helping them do so, and we will continue to 
provide recommendations in this area through our reviews of the 
Department's quarterly reports on high-dollar overpayments, our 
mandated annual review of the Department's compliance with the 
Improper Payments Act requirements, and otherwise.
    I note that we have initiated a review to more closely 
examine the Department's methodology for identifying high-
dollar overpayments.
    Thank you very much.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    And this is your day. Mr. O'Carroll.
    Mr. O'Carroll. And I am the only one--I am the only one 
with no green. [Laughter.]
    It is probably in protest since I am not in New York at the 
parade. [Laughter.]
    Good morning, Chairman Rehberg, Congresswoman DeLauro, and 
Members of the subcommittee.
    Thank you for the invitation to testify today.
    Federal agencies must spend taxpayer dollars wisely and 
efficiently, and they must make sure Government benefits are 
administered correctly. SSA and agencies across the Government 
have increased their efforts to reduce improper payments in 
recent years, particularly since President Obama signed the 
executive order on improper payments and the Improper Payments 
and Elimination and Recovery Act.
    Since my office was established in 1995, our primary goal 
has been to identify and reduce SSA's improper payments. Our 
auditors work diligently to identify program vulnerabilities, 
and our investigators achieve hundreds of millions of dollars 
in SSA recoveries, restitutions, and savings every year. With a 
history of identifying SSA's improper payments, our office was 
asked by the IG community to assume a leadership role with OMB 
and the Treasury on implementing the improper payments order 
and legislation.
    For fiscal year 2009, SSA reported improper payments 
totaling $8 billion. The agency's Retirement, Survivors, and 
Disability Insurance Program had $2.6 billion in overpayments 
and $600 billion in underpayments. Its SSI program had $4 
billion in overpayments and $800 million in underpayments.
    SSA seeks to improve both programs. The agency said it 
plans to commit nearly $800 million towards program integrity 
efforts this year, with an emphasis on error detection tools, 
such as continuing disability reviews, or CDRs, and SSI 
redeterminations. My office has continually recommended that 
SSA allocate funds to these stewardship tools, and we are 
pleased that the agency is dedicated to improving payment 
accuracy.
    SSA's number of completed medical CDRs declined by 65 
percent in recent years. At the end of last fiscal year, SSA 
had a backlog of more than 1.5 million CDRs. We estimated that 
SSA would have avoided paying $1 billion in 2011 if the CDRs in 
the backlog were conducted when they were due.
    Redeterminations also decreased by 60 percent from 2003 to 
2008. We estimated that SSA could have saved an additional $3 
billion during 2008 and 2009 by conducting redeterminations at 
the same level it did in 2003.
    While it is critical to identify improper payments that 
have been made, it is equally important to utilize tools that 
can prevent payment errors before they occur. My office for 
years has encouraged SSA to use data matching to protect agency 
funds.
    On an OIG recommendation, SSA sought several thousand 
agreements with Federal, State, and local corrections 
facilities so that it could match prisoner data against its 
records, halting payments to prisoners. In 2006, SSA's Office 
of the Actuary estimated savings of over $500 million per year.
    Similarly, to reduce SSI overpayments, OIG recommended SSA 
obtain beneficiaries' bank account information rather than rely 
on self-reporting of resources. The agency in recent years 
implemented the Access to Financial Institutions Project, which 
allows SSA to check an applicant or recipient's bank account to 
verify resources.
    We have made other data recommendations to SSA involving 
potential matches of beneficiary information to marital status, 
workers, compensation, and vehicle ownership. We also are 
pursuing an exemption from the Computer Matching and Privacy 
Protection Act to facilitate our work in this area.
    In conclusion, SSA and other agencies have made strides to 
comply with requests to report their improper payments, 
identify causes, and allocate resources to prevent future 
errors. My office will continue to work with this subcommittee 
and SSA in these and future efforts to reduce improper payments 
in SSA's benefit programs.
    Thank you for the invitation to testify today, and I will 
be happy to answer any questions.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    For the benefit of the committee Members that were not here 
on time, we were going to ask questions until 5 minutes left on 
the vote. And then we will adjourn the meeting and come back 
after the two votes.
    And so, we have about 10 minutes' worth of time, which 
probably gets us through me and the ranking member, and we will 
get you off to the vote so you don't miss anything.
    Thank you very much, and I appreciate all of your hard work 
and time that you spend trying to find not just the waste, 
fraud, and abuse, but we know that it is accident-related as 
well. It is not always one of those three arenas.
    I guess, Mr. Lewis, and maybe the rest of you can answer 
the question, but it is not nearly as appropriate perhaps as 
for Medicare and Medicaid. But how do you hold States 
responsible? Is there a mechanism for you to go back on the 
States or to tell us where the problems exist? Do we have 
anything, an oversight capacity within our ability to go back 
on the States and recapture some of the money?
    Mr. Lewis. Well, the Department certainly has oversight 
responsibility of the program that the States are running. The 
UI program is unique in that being a Federal-State program, the 
States do have a vested interest in complying.
    The bulk of these overpayments we are talking about are 
really their State UI tax dollars. So it is in their interest 
to recover the funds. But the Department does approve of their 
program, authorize their program to operate. So it does have 
the means to do oversight and push for enforcement of the 
rules.
    But I think it is a strong incentive that it is the State's 
own tax monies in the trust fund that they are protecting, as 
well, by doing this.
    Mr. Rehberg. Okay. I am still learning a lot about this 
subcommittee's work. And at the purest sense, I look at the 
Social Security Administration, and I think you have about 
65,000 employees versus the Department of Labor. And I have no 
idea how that equates into number of seniors per employee or 
number of unemployed per employee.
    Can you draw any kind of a comparison? Why are there any 
mistakes if you have got 65,000, how many employees within the 
Department of Labor deal with----
    Mr. Lewis. Oh, 18,000 total, roughly. I am not sure how 
many are dealing with UI. There are people down in the State 
level that are administering----
    Mr. Rehberg. And maybe I am not fairly making a comparison. 
But it seems to me like they will joke about, ``Why is he 
crying? His farmer died.'' It is almost like why are there any 
mistakes when you have 65,000 employees? How many of them are 
actual caseworkers that are sitting there making these kinds of 
determination whether there should be the proper payment? Is 
that a fair question?
    Mr. O'Carroll. Chairman, SSA is very service oriented. It 
is pretty much the face of the Government to many people. And 
because of that, service to the public is a hallmark of SSA, 
and a lot of SSA's employees are out in the field dealing 
directly with the public.
    However, there are a lot of complications in terms of the 
programs that SSA manages, especially with regard to self-
reporting of income or other eligibility factors. As you 
mentioned before, SSA has to deal with the States in terms of 
matching of information on death, divorces, other types of 
vital statistics.
    So even with the large amount of employees that SSA has, a 
lot of their time is spent on service. And I think what will 
come out of this hearing, our biggest concern is stewardship, 
making sure that the right people are getting the right amount 
of money, and that SSA is putting the right amount of attention 
toward stewardship. As an example, to make sure that their 
medical condition hasn't improved and they haven't become 
better, and that they don't need benefits anymore.
    Mr. Lewis. Well, the UI program has some similarities in 
that it is dependent on a lot of self-reporting or initial 
self-reporting that is later confirmed with employers. The 
program, given the nature of the program, is to be a supplement 
or a stand-in for basic needs for folks when they are out of 
work. That if the States waited until they had verified 
everything before initiating the first payments, then we would 
be holding up a payment for a considerable length of time, in 
some cases.
    So a lot of it is that the volume they are dealing with and 
the need to go back to employers, for example, to confirm 
things.
    Mr. Rehberg. Okay. Thank you.
    Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman.
    And thank you all for your testimony and for your 
commitment to public service. You do a great job.
    Could one or more of you help us to understand what is 
meant by improper payment? It has been alluded to a couple of 
times here. I think that when some people hear the term, they 
hear there are billions of dollars in improper payments in 
programs like Medicare, and they equate that with waste or 
fraud.
    And some of the payments, quite honestly, undoubtedly 
reflect fraud and abuse. I have no question about that. But 
also, listening to all of you, there is also overpayment, 
underpayment, so I'd like some clarity of what an improper 
payment is. In a program like Medicare, aren't many improper 
payments the result of things like improper coding, inadequate 
documentation?
    In other words, it is not that healthcare wasn't provided 
or wasn't necessary, but that the services may not have been 
properly described or documented as to medical necessity. That 
may have been missing in terms of the material.
    I don't mean to suggest in any way that we shouldn't try 
hard to reduce these kinds of problems. We should. That is what 
we ought to be about. We have rules about information and 
documentation for good reason. Miscoding of services may mean 
that the wrong amount is paid. But I think we need to be clear 
about what improper payments are to help put the numbers in 
perspective.
    So, as I said, I'd like for one or more of you to help us 
really to try to understand this.
    Mr. Levinson. Thank you. Thank you, Ms. DeLauro.
    And actually, I think that that is a great way of opening 
up the subject. And improper payments manifest itself, I think, 
in such different ways for different programs that I think you 
will get different and important perspectives on this issue 
depending upon who you talk to, going right down the panel. And 
for that matter, with respect to virtually all of the 
department OIGs around Government.
    With respect, for example, to Medicare, in fee-for-service, 
the main types of errors--and there are three--are insufficient 
documentation, medically unnecessary claims, and miscoded 
claims. These account for most, the great majority of the 
$34,300,000,000 that have been identified as payments that 
don't meet program requirements.
    Now you are absolutely correct in noting that it is 
unlikely that all payments that simply don't meet program 
requirements are necessarily----
    Ms. DeLauro. Fraud.
    Mr. Levinson [continuing]. Bad in the sense of not serving 
a particular beneficiary in a way that the beneficiary needed 
to be served and, going back and looking at the claim, could be 
corrected. It is not a valid substitute for a fraud figure, and 
in fact, as we have often said around our office, the best 
fraudsters do the paperwork perfectly so that the improper 
payment rate is not a good figure. There is fraud that occurs.
    Perhaps the best fraud occurs outside of the improper 
payment. Because if you are really good, you are going to buy 
off the doctor or buy off the beneficiary, and the paperwork is 
going to look excellent.
    So it is important to distinguish that. That isn't to say 
that there are and unquestionably fraud schemes that are 
embedded that exist within the figure. But teasing out, 
drilling down and understanding what that is, it is so much, of 
course, for the size of HHS, it is a huge data challenge. And 
it is very, very helpful to have now the monies flowing into 
our data systems that will allow for real-time understanding of 
transactions and doing the kind of prepayment edits that are 
really necessary and the prepayment reviews to understand how 
the money actually is getting spent.
    Being able to identify patterns effectively before the 
money goes out the door so you don't have to engage in so much 
``pay and chase,'' very important reforms.
    Ms. DeLauro. I was taken with your commentary on the four 
areas that we should be focused on in this effort. So I thank 
you, really thank you for helping to clarify it.
    And let me yield back, Mr. Chairman, because maybe someone 
can get in----
    Mr. Rehberg. Well, we are going to cut it off right here.
    Ms. DeLauro. Going to cut it off right now? Okay, fine.
    Mr. Rehberg. And we will be back as quickly as we can.
    Thank you.
    [Recess.]
    Mr. Rehberg. [presiding] Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.
    Good morning to all of you.
    Mr. Levinson, in your statement, you mentioned that upon 
the first day of hiring for new people coming off of the 
unemployment roll, that the employer has to report the first 
day of hiring. Is that accurate?
    Mr. Levinson. I think this is a Department of Labor.
    Mr. Alexander. Oh, okay. I am sorry. Mr. Lewis.
    Mr. Levinson. That is quite all right.
    Mr. Lewis. Yes, it is actually an HHS database that is 
maintained.
    Mr. Alexander. Okay.
    Mr. Lewis. It was set up for a different purpose. But, yes, 
the employers are required generally within, I believe, 20 days 
to report that they have hired someone.
    Mr. Alexander. Okay. And they do that by paper? It is not 
something that has to be done electronically?
    Mr. Lewis. I am not sure exactly the mechanism they do 
that.
    Mr. Alexander. I was just thinking about speed. The more 
quickly they can report that, the better off we would all be.
    Mr. Lewis. Yes, I am not aware--there is the requirement to 
report, as I said, generally within 20 days, and I am not aware 
that there is a problem with employers not getting their report 
in within the 20-day limit.
    Mr. Alexander. Okay. And I just have a couple of questions.
    Mr. Levinson, you mentioned something about a cap on the 
chiropractors and the services that they provide. Why would 
they be singled out over other healthcare providers?
    Mr. Levinson. Mr. Alexander, the chiropractic example was 
exactly that. One example among many. And we would be happy to 
provide you details on a wide variety of healthcare providers 
where we have done reviews like this, which have indicated that 
we can do a better job in terms of the paperwork.
    Mr. Alexander. Well, there is one thing I would like for 
you to provide the committee that we have not been able to get 
in the past. We read various reports about how many healthcare 
providers, physicians, whoever, that are found doing something 
wrong or inappropriate. And we hear reports that some group 
submitted invoices of 1,200 claims from one location and maybe 
1,000 procedures done by one individual during the course of a 
day, and they were paid for that.
    My question is, all of these outsiders that we hear about 
that are arrested and some convicted, we have never heard 
anything about individuals on the inside that are 
participating. Now I have watched ``The Godfather'' and other 
shows where organized crime is the subject of matter. You never 
mention anything about it, but is organized crime part of the 
trouble that we have in some of these cases perhaps?
    Mr. Levinson. Mr. Alexander, organized crime unquestionably 
is a part of the fraud problem.
    Mr. Alexander. Okay. Well, the reason I asked that is, 
again, I think it takes at least two or more to be organized. I 
don't think one individual robbing a service station would be 
considered part of organized crime.
    So, again, the point being that it seems strange that we 
pay a tremendous amount of money out through fraud and abuse. 
Doesn't anybody notice when an invoice comes in and some doctor 
does 1,000 procedures in the same day? Does somebody just write 
a check and say, ``This is a hard-working doctor.''
    Again, it is hard for us to believe that there is a 
tremendous amount of fraud and abuse going on without somebody 
on the inside knowing about it. And we have not yet had one 
name submitted to us that worked at a governmental agency, at 
the local, State, or Federal level that was caught doing 
anything wrong.
    Mr. Levinson. Well, I think this will be actually an 
excellent subject to dive down a little bit with your next 
panel, which will include CMS, that they can talk about the 
efforts to come up with better real-time data so that these 
transactions can be understood much more quickly. You know, as 
a result of prompt payment, historically there has been too 
much of a delay between the transaction and then people looking 
to see behind it.
    But I can tell you that from our office's perspective, 
there is no automatic profile of who a fraudster is when it 
comes to healthcare fraud. And I certainly want to add that the 
great majority of physicians and other healthcare providers are 
honest, highly professional, and doing a very, very important 
job for the American people.
    Mr. Alexander. And we appreciate that.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.
    And thank you to the panel for your hard work.
    One of our highest priorities and one that I believe is 
shared by all of us on the subcommittee is to reduce Medicare 
fraud. First of all, we know it wastes taxpayer dollars. It is 
a slap in the face to the more than 46 million beneficiaries 
who depend on Medicare.
    Mr. Levinson, last week, Secretary Sebelius testified 
before the subcommittee that the proposed 10-year investment in 
CMS program integrity in the fiscal year 2012 budget request 
will yield $10,300,000,000 in Medicare and Medicaid savings. Do 
you know how the administration arrived at the $581,000,000 
discretionary funding proposal for fiscal year 2012 to improve 
CMS program integrity?
    Now let me just say one other thing. I understand this is a 
substantial increase. But when I hear your testimony, 
$56,800,000,000 in improper payments for Medicare and Medicaid 
in 2010, I want to ensure that we are doing everything we can 
to prevent fraud.
    So, number one, if you can answer that $581,000,000, and 
does HHS and the Inspector General's office have the capacity 
to grow improper payment programs at an even greater rate 
beyond what is included in the budget request so that if we 
were to invest more today, we would have more to spend 
tomorrow? Could you respond?
    Mr. Levinson. Yes, I would be happy to, Mrs. Lowey.
    On the first question, it is not that I am happy to do so, 
but I think I need to defer to the policymakers on your 
$581,000,000 issue because CMS will be testifying after us, and 
they will be able to speak directly to the Administration's 
proposal. So I can't really look prospectively.
    I certainly can speak with great confidence about our 
budget and the way in which we have been able to contribute, I 
think, in a very significant way toward the Department being 
able to get a far better handle on the improper payment figure, 
as it appears before you today, and coming up with an effective 
plan to reduce those figures.
    As I explained in my opening statement, so much of the 
improper payment dollars don't have to do with fraud so much as 
being able to get data collection, and the understanding of 
what that data actually means, understood and acted upon far 
more quickly. And CMS is taking steps, and I would say many of 
them are directly related to what the Affordable Care Act 
provided in terms of added funding and giving the Secretary far 
greater authority to restrict enrollment in areas where there 
has been abuse by fraudulent people easily being able to get 
provider numbers and entering the program for the sole purpose 
of taking advantage of it.
    Provisions like that from the work that we have already 
done provide us, I think, with a very great sense of confidence 
that, going forward, these kinds of figures can be reduced 
significantly.
    Mrs. Lowey. I appreciate that point, and I know my 
colleague, Ranking Member DeLauro, made it clearly that it is 
not all fraud, and we have to really focus on get to the 
providers who are involved in fraudulent practices. Some of 
those, we have had those cases in my office where they are 
still writing them in by hand, and they don't even want to use 
the new technology. So this is an issue that we see all the 
time.
    Another question. Mr. O'Carroll, happy St. Patrick's Day. 
You testified that 10 percent of total Supplemental Security 
Income payments in 2010 were either overpayments or 
underpayments. This seems to be an unacceptably high 
percentage, and it is far different than the 0.5 percent 
improper payment rate for the Retirement and Disability 
Insurance Program.
    How does the SSI program, which is far smaller than RSDI, 
have such a higher improper payment rate?
    Mr. O'Carroll. Congresswoman, that is one of the ones when 
I mentioned earlier, a problem with the SSI program is a lot of 
it is self-reporting of your wages and your income on it. And 
because of that, it is susceptible to fraud in terms of a lot 
of people are going to be underreporting what their income is.
    And because of that, we are recommending that SSA have 
better agreements with States on trying to match information 
that the States have on people's wages and information. But 
probably more important than that that they are doing now is 
this access to financial institutions, where the banks are now 
being able--so when a person puts down and says that they are 
destitute and they are looking for benefits, SSA at that point 
can be checking to see if they do have assets.
    What we would like to do kind of again is get agreements 
going with the States to see if, for example, a person who 
claims that they are destitute has a number of vehicles. So, 
again, that is the biggest problem----
    Mr. Rehberg. I am going to ask you if you have additional 
information to put it in for the record. We would love to have 
that.
    Mr. O'Carroll. Yes, Chairman.
    Mr. Rehberg. My intent is to finish this round with Mr. 
Flake and Ms. Roybal-Allard and then move on to the next panel 
so we have enough time for them to give their testimony as 
well.
    Mr. Flake.
    Mr. Flake. Let me shift to recovery rates for a minute. It 
is noted that improper payments totaled $125,000,000,000 in 
2010. The agencies recovered about $687,000,000. That would 
seem to be extremely low.
    In the private sector, you have issues like this. Recovery 
rates are far, far higher for vendors that don't pay or 
whatever else. And I am wondering, are there incentives that 
can be offered, that are offered to these agencies to have a 
higher recovery rate? What is the difference, I mean, between 
those who are working on recovery, the agency itself?
    Is it treated any differently by the Congress in the next 
year's budget? Are there employment incentives or bonuses that 
are attached? What is the difference to an agency if they have, 
what is this, a 0.05 percent recovery rate, as opposed to a 50 
percent recovery rate? Is there any material or tangible 
difference with how an agency is treated by the Congress or by 
the executive branch or anybody else?
    Go ahead, Mr. Levinson.
    Mr. Levinson. Mr. Flake, this, once more, actually is a 
question that will be best handled by CMS, which is supposed to 
appear right after me. Because CMS does devote significant 
resources to Recovery Audit Contractor programs, a major amount 
of the money. Although we are funded several hundred million 
dollars in our mission to protect programs against fraud, 
waste, and abuse, CMS is in the billion-dollar category when it 
comes to program integrity.
    And a significant amount of those dollars are devoted to 
coming up with a Recovery Audit Contractor program, where there 
are major operations employed throughout the United States 
whose purpose is to recover improper payments, and there are 
incentive programs. In other words, compensation is tied to the 
recovery.
    I don't have before me the details of those figures, but 
those figures certainly can be gotten to you quite easily.
    Mr. Flake. Well, with a recovery rate of $687,000,000 on 
$125,000,000,000 improper payment, the payment to these 
collectors, if you will, may be improper as well. I mean, it is 
the fact that we are collecting so little says to me that we 
need some new incentives in place or penalties or something 
attached to this because would you not agree that this recovery 
rate is strikingly low?
    Anybody else? I hear a head nod there. Kathleen.
    Ms. Tighe. I would certainly agree with that. I think at 
Education, I think recovery of monies is a big challenge for 
the Department.
    I think in part it is due to incentives. I think there are 
incentives built into the Improper Payments Act, supposedly 
through allowing a certain amount of the recoveries to come 
back to departments. I am not sure that is going to be enough 
to overcome some of the hurdles to getting money back in 
certain programs at Education, for example, Title I programs 
going out to States.
    I think I mentioned, the 41 audits we had. Thirty-three of 
those have been resolved, worth about $53,000,000. The 
Department is only going after about $3,000,000 and hoping to 
get it back. The reasons for that are built into the statute; 
they have to show that there has been harm to the Federal 
interest.
    And what that means is, look, if the students are already 
getting served, and there really isn't-- it is hard to make a 
school district pay money back.
    Mr. Flake. I understand that more than I do on the medical 
services and whatever else. That is bigger money and easier, it 
would seem, money easier to be reclaimed.
    Anyway, when I look at this, I think we have got to change 
the incentive somehow because this is a very, very low recovery 
rate.
    Thanks.
    Mr. Rehberg. Ms. Roybal-Allard.
    Ms. Roybal-Allard. Inspector O'Carroll, let me begin, first 
of all, by commending you for the efforts that the Social 
Security Administration is making to reduce improper payments 
in its three programs. However, I keep hearing from my 
constituents how confusing it is to navigate through the 
system, and the paperwork is also very difficult.
    And my minority and disabled constituents are the ones that 
are the most frustrated, and this makes me think that perhaps 
the complexity of your programs and of the paperwork play a 
significant role in improper payments, particularly in the 
Social Security Disability Insurance and Supplemental Security 
Income programs.
    Do you track what proportion of overpayments and 
underpayments have resulted from misunderstandings of the 
process or confusion about the paperwork? And what is being 
done to simplify your programs, improve transparency in the 
reporting requirements, and ensure that the process is 
culturally and linguistically appropriate for minority 
populations?
    Mr. O'Carroll. Congresswoman, that is probably better 
answered by SSA when their panel is there, in terms of the 
simplification of the different forms on it. But to give you 
some of the work that we have done in that area, we have been 
taking a look at, as an example, with the applying for Social 
Security benefits, one of the things is with the iClaims, which 
is the Internet claims on it, which has been designed by the 
agency. It has been, I guess, vetted. It is simpler.
    It seems to be well liked by the claims reps in SSA itself. 
And we just did an audit on that, and we found that about 95 
percent of the people that have been using this online claims 
form are very happy with it. They like it, and they are doing 
it. So I am thinking is that SSA is going in the right 
direction in terms of simplifying the application process.
    As far as if we are finding out on the underpayments and 
overpayments if there is a problem in terms of the application 
process itself, if you don't mind, let me take a look at that, 
and I will get back to you on the record with our findings on 
that one. I don't have any recent audit work on that to be able 
to give you a direct answer.
    Ms. Roybal-Allard. Okay. And I have another series of 
questions, which I probably will submit for the record if I 
don't have time to ask them later.
    Inspector Levinson, first of all, thank you for your 
testimony and your excellent summary of what HHS is doing to 
address improper payments in Medicare and Medicaid. And I 
recognize the importance of improving CMS program integrity, 
but I would like to focus for a moment on some of the other 
programs that you oversee, which also face challenges in 
program integrity.
    There has been a long history of controversy about cash 
welfare programs in this country. And while I understand that 
States set their own TANF cash benefits levels and are 
responsible for the integrity of their own programs, 
$16,500,000,000 annually is a relatively large Federal grant 
program, and the Federal Government does have a vested interest 
in how States use these funds.
    It is my understanding that the application of the Improper 
Payments Act to TANF has been contentious and that States have 
opposed the development of a national error rate for TANF. 
Where does the administration stand on the development of an 
official error rate for TANF programs, and what specific 
obstacles are you facing in developing a national rate?
    Mr. Levinson. Ms. Roybal-Allard, there have been legal 
questions regarding how the improper payment calculation would 
apply to the TANF block grant, in particular. That does raise 
unique issues of the Federal-State relationship. And our 
understanding is that the Department, the Administration is 
working on options to how they might remedy the issues.
    We are outside of that policy loop. So I would defer our 
colleagues in ACF to provide a more detailed response.
    Ms. Roybal-Allard. Okay. Do you have any idea whether or 
not the tools that have been developed by HHS to address 
improper payments in Federal programs has been effective in 
promoting integrity in State TANF programs?
    Mr. Levinson. Well, we do have some TANF work, but it 
doesn't apply specifically to improper payments. We are 
reviewing States' use of smart card technology to validate the 
identity of TANF recipients. I mean, this does certainly have 
an impact on appropriate payments, to ensure payments are used 
for authorized items.
    We have a review of ACF oversight, if States is compliant 
with TANF work participation and the verification requirements. 
So there is important review work being done in the TANF 
program.
    Ms. Roybal-Allard. Okay.
    Mr. Rehberg. Thank you.
    We are going to excuse this panel.
                              ----------                              

                                          Thursday, March 17, 2011.

                           IMPROPER PAYMENTS


                               WITNESSES

GAY GILBERT, ADMINISTRATOR, OFFICE OF UNEMPLOYMENT INSURANCE, 
    EMPLOYMENT AND TRAINING ADMINISTRATION
DEBORAH TAYLOR, DIRECTOR OF THE OFFICE OF FINANCIAL MANAGEMENT, CENTERS 
    FOR MEDICARE AND MEDICAID SERVICES
THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE AND ACTING CHIEF FINANCIAL 
    OFFICER
CAROLYN COLVIN, DEPUTY COMMISSIONER OF SOCIAL SECURITY
    Mr. Rehberg. All right. Let's get going. Ms. Gilbert?
    Ms. Gilbert. Chairman Rehberg, Ranking Member DeLauro, and 
subcommittee Members, thank you for this opportunity to discuss 
the Unemployment Insurance program and strategies for reducing 
UI improper payments, which is a top priority at the Department 
of Labor.
    It is receiving the highest level of attention and focus 
from departmental leadership, and we are working aggressively 
to identify new strategies, tools, and resources to support our 
State partners in bringing the UI improper payment rate down. 
The entire UI system, both Federal and State, has a 
longstanding commitment to program integrity. We use highly 
sophisticated sampling and audit methods to prevent, detect, 
and recover improper payments.
    Unfortunately, the improper payment rate has increased 
during the course of this recession. As of the most recent 
reporting period, it stands at 11.2 percent, of which 10.6 
percent represents overpayments.
    The four main reasons for improper payments in the UI 
program are, one, payments made to individuals who continue to 
claim benefits after they return to work; two, employers 
failing to provide timely and adequate information on the 
reason for the individual's separation from employment; three, 
the inability to validate the individual has met the State's 
work search requirements; and fourth, the failure of the 
claimant to register with the State's employment service, 
pursuant to the State's law.
    The recession has severely stressed our UI system and has 
been another cause in the rise of the UI improper payment rate. 
As a result of the overwhelming workload over the last 2 years, 
States have reprogrammed their integrity staff to actually take 
claims instead of working to reduce improper payments. And 
technology solutions that could have controlled or reduced 
improper payments were put on hold during all of the changes in 
the Emergency Unemployment Compensation program.
    Improper payments due to claimant fault have also increased 
during the recession. Improper payments resulting from 
claimants' failure to complete their work search requirements 
have risen as a result in large part due to lack of jobs. This 
type of improper payment is extremely workload intensive and 
costly to detect given the size of the UI population, which 
today numbers 8.8 million.
    Despite these challenges, the department has one 
overarching goal, and that is to get the improper payment rate 
down. Working with our State partners, the department has a 
number of robust strategies already underway, as well as newly 
identified strategies for prevention, which is the key to 
getting the rate down.
    To address the issue of claimants' continuing to claim 
benefits after they return to work, the department will be 
mandating expanded use of the National Directory of New Hires 
as both a detection and a prevention tool and will provide new 
protocols, resources, and technical assistance to States to 
enable them to use the directory most effectively.
    We have appreciated Congress's support for the Reemployment 
and Eligibility Assessment Initiative, a critical UI integrity 
investment that reduces improper payments through early 
detection of eligibility problems and speeds claimants' return 
to work. To date, 40 States have REA programs that support 
claimant eligibility reviews and development of reemployment 
plans at their One-Stop career centers. The $70,000,000 
requested in the fiscal year 2012 budget will fund 980,000 
claimant REA visits and save State UI trust funds an estimated 
$237,000,000.
    To ensure that States are able to get timely and accurate 
separation information to prevent improper payments when a 
claim is first filed, the department has joined with States to 
implement the State Information Data Exchange System, or SIDES. 
SIDES provides a secure electronic data exchange between States 
and employers or their representatives, and it both speeds up 
the process and improves the completeness and the accuracy of 
the information. The department is actively working with States 
now to rapidly accelerate implementation of SIDES.
    To improve recovery of improper payments, I am pleased to 
report that a necessary regulation and system is now in place 
for States to implement the Treasury Offset Program, which 
enables States to recover UI overpayments by offsetting Federal 
income tax refunds against UI debts. States are already showing 
impressive recovery numbers as a result.
    Given that States are the key to getting the rate down, it 
is our intent to provide new tools and intensive technical 
assistance, particularly to high-impact States, to improve 
prevention. With Congress's support, we will continue to 
provide States with supplemental funding to improve UI 
integrity. In addition, the President's fiscal year 2012 budget 
includes a request for $10,000,000 for incentive awards to 
States with the most improved integrity performance.
    In order to get more resources and new tools in the hands 
of States, we are extremely pleased that Congress passed two of 
the provisions of the UI, the Unemployment Compensation Program 
Integrity Act of 2010 in the last Congress. However, we 
continue to believe all of the provisions in the Integrity Act 
are important to the UI system's ability to control improper 
payments.
    Therefore, the President's budget also proposes a 
reintroduction of the Integrity Act, which includes the option 
for States to retain up to 5 percent of their recovered 
overpayments and to use those for integrity activities. We 
anticipate transmitting the new legislation to Congress in the 
coming weeks.
    In conclusion, the department is committed to working with 
our State partners to bring down the UI payment rate, and we 
look forward to working with you as well. And I will be glad to 
answer any of your questions.
    [The prepared statement of Gay Gilbert, Administrator, 
Office of Unemployment Insurance, Employment and Training 
Administration, follows:]

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    Mr. Rehberg. Thank you.
    Ms. Taylor.
    Ms. Taylor. Good morning, Chairman Rehberg and Ranking 
Member DeLauro and Members of the subcommittee.
    Thank you for the opportunity to be here today to discuss 
the corrective actions that the Centers for Medicare & Medicaid 
Services (CMS) are taking to reduce improper payments in the 
Medicare and Medicaid programs. CMS is committed to reducing 
the rate of improper payments and ensuring that our programs 
pay the right amount for the right service to the right person 
in a timely manner.
    Like other large and complex Federal programs, Medicare and 
Medicaid are susceptible to improper payments, and CMS does 
calculate, on an annual basis, the improper payments rate for 
these programs. I think we have talked a lot about it this 
morning, but improper payments are generally errors. They are 
not fraud.
    These errors generally result from the following 
situations. First, a provider fails to submit any documentation 
or submits insufficient documentation to support the services 
paid. Secondly, the services provided are incorrectly coded on 
the claim. And thirdly, the documentation submitted by the 
provider shows the services were not reasonable and necessary.
    CMS is committed to reducing these improper payments and is 
working aggressively on corrective actions to deter and reduce 
them. I would like to talk a little bit about each of these 
programs and the corrective actions we are taking currently.
    First, the traditional Medicare fee-for-service program 
represents the majority of Medicare spending. This program is 
administered by CMS through contracts with private companies 
that process close to 5 million claims each day. That is over 1 
billion claims a year. CMS uses the Comprehensive Error Rate 
Testing program, known as CERT, to estimate an improper payment 
rate for this program.
    Last year, CMS was able to reduce the improper payment rate 
by 1.9 percent, from 12.4 percent to 10.5 percent. The CERT 
program provides valuable information to the Agency to assist 
in the development of corrective actions. The best way to 
address these problems--and I think you heard from the OIG, Dan 
Levinson--is robust provider enrollment, increased review of 
medical records, and enhanced systems, edits, and automated 
processes and analytic tools.
    Some of our recent provider education efforts include the 
development of comparative billing reports, issuance of 
quarterly compliance reports to providers, and conducting 
routine forums to discuss Medicare policies and documentation 
requirements.
    And CMS recently also implemented the national recovery 
audit program. This program provides valuable information about 
areas where increased education and outreach are needed, as 
well as where prepayment medical review is most productive. 
Together, these tools provide valuable information to assist in 
the development of automated edits that will detect and reject 
claims before they are paid.
    We believe that all these efforts will go a long way in 
helping us achieve the goal to cut the Medicare fee-for-service 
improper payments rate in half by 2012.
    While CMS administers the Medicaid program, this program is 
essentially more than 50 programs. CMS developed the Payment 
Error Rate Measurement program, known as PERM, to review 
improper payments in three components of Medicaid--fee-for-
service claims, managed care claims, and eligibility cases. In 
fiscal year 2010, the Medicaid improper payment rate was 9.4 
percent, and this was a reduction from the prior year of 9.6 
percent.
    While causes of improper payments vary from State to State, 
PERM helps CMS identify trends and common errors across States. 
States are critical partners to CMS efforts to reduce Medicaid 
improper payments. All States must develop corrective actions 
to address their improper payments, and based on the corrective 
action plans, which CMS does review and approve, many States 
intend to enhance their provider education efforts and improve 
the responsiveness and completeness of documentation.
    CMS also collects and disseminates best practices that are 
shared among the States to help them learn from each other and 
ensure that they continue to reduce their errors. CMS has made 
progress in reducing errors. We believe that the expansion of 
the recovery audit program to Parts C and D, which are the 
managed care and prescription drug programs, as well as the 
Medicaid program, as required under the Affordable Care Act, 
will greatly help us reduce errors even further.
    We are also looking at private sector techniques, such as 
electronic health records, more analytic tools, and other items 
that the private sector currently uses to help us reduce this. 
I believe that these efforts will help us further reduce error 
rates, and we look forward to working with you. And I would be 
happy to answer any questions.
    [The information follows:]

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    Mr. Rehberg. Boy, right on the nose. Good job.
    Ms. Taylor. Thanks. [Laughter.]

                     IMPROPER PAYMENTS--PELL GRANTS

    Mr. Rehberg. Mr. Skelly. We normally go in order of title 
within the bill.
    Mr. Skelly. Thank you, Mr. Chairman and Ms. DeLauro, 
Members of the subcommittee.
    With one exception, Department of Education programs have 
been below the Improper Payment Act threshold for reports on 
susceptibility to significant improper payments. The threshold 
is 2.5 percent. The one exception at the Department has been 
the Pell grant program.
    In Pell, we estimate that about 2 percent of the recipients 
get overpayments, and 1 percent get underpayments. The 
combination 3.12 percent is above the 2.5 percent threshold.
    Even though our other programs fall below the threshold for 
reports on improper payments, we still subject them to risk 
assessments and monitoring, especially the student loan 
programs. But Pell is the program that has the required reports 
under the Improper Payment Act.
    Pell grants provide need-based aid to low-income 
undergraduates. The estimated improper payment of just over 3 
percent results primarily from incorrectly reported applicant 
income data. Our risk assessments found that this incorrect 
student and parent self-reported financial information on the 
Free Application for Federal Student Aid, or FAFSA form, is 
what is causing the problem.
    The FAFSA requires applicants to provide nearly two dozen 
pieces of information, many of which they also provide to the 
Internal Revenue Service on their Federal tax forms. And 
sometimes, they get it wrong.
    As a check on what applicants report, the Department 
requires postsecondary institutions to verify key items on up 
to 30 percent of their students' FAFSA forms. Students selected 
for verification must provide copies of their or their parents' 
tax returns and supporting documentation to financial aid 
administrators at the colleges.
    The financial aid administrator then manually compares the 
applicant's tax return data against the information provided on 
the applicant's FAFSA. This lengthy process is burdensome to 
students, families, and schools, and it fails to eliminate 
inappropriate Pell payments based on inaccurate income 
information.
    In 2009, our Office of Federal Student Aid implemented a 
voluntary process where applicants can access information from 
their past tax returns electronically through an automated 
process with IRS. They can then put that information into the 
online FAFSA form. In the current 2010-11 academic year, 
500,000 applicants have used the automated process so far. It 
is voluntary.
    But most still enter their FAFSA data manually. It is about 
20 million, 21 million students who apply for Pell each year.
    Starting in the 2012-13 academic year, applicants will be 
directed to use the IRS data retrieval process to populate 
their FAFSA automatically. They can just press a button. It 
would be real-time recovery of that information from IRS into 
their tax return. They won't have to do anything more. It still 
will be voluntary. Applicants who file their taxes after they 
have filed their FAFSA will be reminded to update their FAFSAs 
with IRS data.
    Finally, most applicants who are selected for verification 
by colleges will be required to correct their FAFSA with IRS 
data or provide their school with an IRS-approved transcript of 
their tax data, instead of simply supplying a copy of their tax 
return.
    Using IRS data to pre-populate the aid application and 
enhance aid verification procedures for financial aid 
administrators will simplify the FAFSA application for 
students, but it will also reduce the improper payments for 
Pell by an estimated $340 million in 2012. And we estimate by 
$4 billion over the next 10 years.
    That is the highlights of Department of Education improper 
payments, and I will submit the rest of the statement for the 
record.
    [The prepared statement of Thomas P. Skelly, Director of 
Budget Service and Acting Chief Financial Officer, follows:]

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    Mr. Rehberg. Thank you very much.
    Ms. Colvin.
    Ms. Colvin. Thank you.
    Chairman Rehberg, Ranking Member DeLauro, and Members of 
the subcommittee, thank you for inviting me to discuss the 
Social Security Administration's efforts to reduce improper 
payments. I want to highlight several points regarding our 
progress.
    We pay nearly $60 billion of benefits to almost 60 million 
people each month. As the agency's senior accountable official 
for improper payments, let me assure you that we are committed 
to making those payments timely and accurately.
    In fact, there is an adage in the agency, ``The right check 
to the right person at the right time.'' Minimizing improper 
payments is so important that we made preserving the public's 
trust in our programs a strategic goal. However, inadequate 
resources undermine our ability to achieve this goal.
    For many years, Congress appropriated less than the 
President's budget, and we could no longer fulfill many key 
responsibilities. Hearing backlogs rose dramatically, and 
program integrity work declined significantly. Since 2007, we 
have been reversing these trends. Even as we have had to deal 
with surging workloads, we have steadily increased our program 
integrity efforts.
    As a result, I am happy to report that in fiscal year 2009, 
99.63 percent of all OSDI benefits were free of overpayment. 
The Supplemental Security Income, or SSI, program is more 
complex, and our overpayment accuracy rate reflects that 
complexity. Still, we have improved. In fiscal year 2008 our 
SSI overpayment accuracy rate was 89.7 percent. In fiscal year 
2009, we raised it to 91.6 percent, a positive trend.
    Our complex programs require knowledgeable and experienced 
employees to analyze cases, make decisions, and implement 
changes. Our employees are our best defense against improper 
payments, and all of the efforts I discuss today depend on 
having an adequate number of well-trained staff to fulfill our 
responsibilities.
    It is important to understand that these employees are the 
same employees who review and decide on the initial 
applications for benefits and handle all of our other 
responsibilities. We balance serving the public with meeting 
our stewardship duties to the best of our ability, but with a 
record number of people requesting our services, we simply do 
not have enough employees to handle all of our work on a timely 
basis.
    Operating under a continuing resolution only makes this 
situation worse. Our most valuable tools to maintaining the 
integrity of our programs are continuing disability reviews, or 
CDRs, and SSI redeterminations. We invested $758,000,000 toward 
these efforts in 2010, and we propose to invest even more in 
fiscal years 2011 and 2012.
    We estimate that every dollar invested in CDRs yields at 
least $10 in lifetime program savings, including savings 
accruing to Medicare and Medicaid. Every dollar spent on SSI 
redetermination yields more than $7 in program savings over 10 
years, including savings accruing to Medicaid.
    We use technology to help us prevent and detect improper 
payments. For example, unreported financial accounts and wages 
are the major causes of improper payments in the SSI program. 
Therefore, we have developed a process called Access to 
Financial Institutions, or AFI, to electronically identify 
financial accounts of SSI applicants and recipients. We plan to 
complete AFI rollout by the end of the fiscal year. After 2013, 
we project that AFI could yield a $20 return for every $1 
invested. In the past, SSI recipients had to either fax, mail, 
or bring their monthly wage reports to our offices. We made 
this process more efficient and user friendly by implementing 
an automated wage reporting system for SSI recipients to report 
wages over the telephone using either voice recognition or 
touch-tone software.
    Our programs demand stewardship that is worthy of the 
promise of economic security. We are firmly committed to 
effectively reducing improper payments and to following up with 
appropriate enforcement and recovery actions.
    In terms of enforcement, I want to highlight the agency's 
close working relationship with our Inspector General. When we 
receive allegations of fraud, we work with the IG's office to 
address these cases.
    In fact, one of our most successful efforts against 
disability fraud is our Cooperative Disability Investigation, 
or CDI, units, the task forces that link our IG and local law 
enforcement with Federal and State workers who handle 
disability cases. These units are highly successful at 
detecting fraud.
    The continued success of our programs is directly linked to 
the public's trust in them. Properly managing our resources and 
program dollars is critical to sustaining that trust. Equally 
important to our success is adequate and sustained funding to 
carry out our work.
    Full funding of the President's 2011 and 2012 budgets will 
allow us to increase our program integrity activities and keep 
up with the public's demand for our services. For this reason, 
I am asking you to support this critical funding.
    I am happy to answer any of your questions.
    [The information follows:]

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                             BEST PRACTICES

    Mr. Rehberg. Great. Thank you very much.
    And in recognition of the time that is remaining in the 
hearing, I am going to shorten the questions on the part of the 
Members to 3 minutes. And hopefully, we will have time for 
maybe two rounds, but I doubt it. So we will limit ourselves to 
3 minutes.
    Ms. Taylor, you essentially mentioned private sector ideas. 
Could you expand upon some of the best practices? And then I 
will ask real quickly the rest of you, do you have something 
similar going on within your agencies for best practices that 
you can learn from banks and insurance companies and credit 
card companies and such?
    Ms. Taylor. Sure. I would be happy to. And so, one of the 
efforts we currently have ongoing right now is encouraging 
providers to use electronic health records. Since documentation 
seems to be the bulk of our errors, as well as coding, we 
believe that electronic health records will help ensure that 
providers have in-house tools to help them code claims 
correctly, as well as understand our payment policies, so that 
they are billing correctly for the services that Medicare pays 
for. That is one.
    We are also looking at private sector edits that would be 
able to be used up front in our claims processing systems to 
reject or detect erroneous claims so that we can stop them 
before they are being paid.
    We are also looking at some private sector tools, such as 
buyer authorization, which is used by private insurers, as well 
as other Government insurance companies such as TRICARE. We 
believe that that also helps ensure that we are working with 
the private insurer.
    Mr. Rehberg. Anybody else?
    Ms. Gilbert. I might mention that we are working with the 
Office of Management and Budget and the Partnership Fund that 
was mentioned and that Ranking Member DeLauro discussed to 
explore and possibly pilot the use of banking payroll deposit 
information as a more real-time data source to determine that 
somebody has gone to work.
    So that is one of the areas.
    Mr. Rehberg. Okay.
    Ms. Colvin. We are certainly able now, with the AFI 
program, to determine whether or not individuals have resources 
in banks that they have not reported. We believe that moving to 
electronic services will reduce the number of improper 
payments. With our SSI wage reporting, as well as the data 
exchanges that we use to check our records against other 
records, we can see individuals who are working but have not 
reported their wages. So we think that we are doing much of 
what the private industry would do.

            BEST PRACTICES TO REDUCE IMPROPER PAYMENTS AT ED

    Mr. Skelly. Two items. One is to contract for recovery 
audits, where the contractors only get paid if they recover 
money. So there is an incentive. The other thing is data mining 
or just using better analysis tools to figure out where there 
might be improper payments.
    Mr. Rehberg. And you all have the authority for data 
sharing now? You don't need any additional authorization from 
Congress for data sharing?
    Mr. Skelly. We in the Department have that authority. If we 
were to, for example, require students to use their IRS data on 
the FAFSA form, we would need a different law for that. But we 
think within the current law, we can do it on a voluntary 
basis.
    Mr. Rehberg. And you all do as well? Okay, great.
    Thank you very much.
    Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Ms. Taylor, I am going to try to do the same thing the 
chairman did here. The CMS program in H.R. 1 was cut back by 
about 13 percent below 2010, by $485,000,000. Most of that 
appropriation is used to process claims for Medicare payments, 
as I understand it. I think that is right? Yes?
    Ms. Taylor. That is my understanding. But it is not 
necessarily my area of expertise. So that is why I am----
    Ms. DeLauro. Okay. Let me just say in terms of the effect 
of that cut on your effort to control fraud, reduce improper 
payments, with the 13 percent below last year's level, how much 
review and fraud detection would CMS actually be able to do?
    Ms. Colvin, despite the amount of money we have been able 
to provide in the past few years as resources for review or 
redeterminations--you still have a backlog. We know what the 
size of that is. If we were able to get you more funds, would 
it produce net results or benefits for the Treasury and to the 
Social Security Trust Fund?
    And you also are dealing with a backlog of claims for 
disability benefits. What does this mean in terms of cutting 
back $500,000,000 from the IT and telecommunications investment 
fund? That could take some pressure off your operating budget.
    So, Ms. Taylor, let me ask you to move first on what this 
13 percent might mean--this is about the improper payments. 
Also I want to say I appreciate all of you talking about the 
fact that there is flawed data, but it is not always flawed. 
There are ways in which we can make this better by getting a 
better system that would allow for coding, et cetera, 
adequately.
    Ms. Taylor. Correct. So one of the things that it would 
affect would be our ability to expand recovery audits into the 
managed care and prescription drug programs, as well as to 
Medicaid. And I think you have heard from a fee-for-service 
program being able to bring up recovery auditing, in the year 
and a half that we have had it implemented, we have already 
recovered over $250,000,000 back to the trust fund. So that is 
hugely important.
    It also does impede our ability to do some of the systems 
initiatives that we need to do, such as integrate our 
databases, be able to develop integrated data repositories, to 
be able to do those analytics of claims to identify places 
where fraud and abuse is occurring, as well as improper 
payments.
    Ms. DeLauro. Ms. Colvin, you have to be quick. My time is 
going by.
    Ms. Colvin. Yes, let me just say I want to thank Congress 
for the resources they have made available since 2007 in the 
area of program integrity. Our program integrity activities 
directly tie into our accuracy rate. And since 2007 when we got 
the funding from Congress and the President, you will note that 
our accuracy rate has gone up substantially.
    Doing ``redets'' is the most effective tool we have to be 
able to reduce the improper payments. If our funds are reduced, 
then we are looking at being able to continue to do CDRs at 
basically the level that we are doing now. We had hoped that we 
would be able to increase the number of redets that we would be 
doing in 2011 and 2012, which would have a direct correlation 
to the reduction of improper payments.
    Ms. DeLauro. Thank you very much.
    Mr. Rehberg. Please submit it for the record if you have 
more information.
    Ms. DeLauro. Please, yes.
    [The information follows:]

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    Mr. Rehberg. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    Glad to be here for a change. Finally found the room. 
[Laughter].
    Let me ask you, and I am actually here to learn more than I 
am anything else. So I don't have too many intelligent 
questions to ask you. But one thing that we in Congress have a 
tendency to think that when we look at whenever we want to save 
money and offset, we go to waste, fraud, and abuse because that 
is an easy thing to go after.
    Same thing with tax gap. We want to raise money. It is what 
people should be paying in taxes. Often those numbers are 
overinflated and stuff, and you mentioned, Ms. Taylor, in your 
comments that most of these are not fraudulent payments. They 
are made services with no documentation, services with 
insufficient documentation, incorrectly coded claims.
    What happens, those are improper payments. If we find those 
as improper payments, that doesn't mean we necessarily recover 
the money, does it?
    Ms. Taylor. What we recover is the actual overpayment we 
identify. So these improper payment rates that Medicare and 
Medicaid have are estimated overpayments. So we identify actual 
overpayments. We do collect that money, and we actually have a 
90 percent collection rate on those actual overpayments.
    This year, although the Medicare program had about 
$32,000,000,000 in estimated improper payments, the actual 
improper payments were about $5,000,000. So we have a very good 
record of collecting the actual overpayments we identify. But, 
yes, those do result in overpayments because we don't have the 
records or the documentation to support the payment of 
services.
    Mr. Simpson. But if we had the correct documentation and 
stuff, it wouldn't be an overpayment?
    Ms. Taylor. Correct.
    Mr. Simpson. If they coded it correctly, as you see it, and 
having been involved in the medical field, to some degree, 
coding something is sometimes harder than you think. Because 
oftentimes, I have had the experience of doing a procedure on 
someone and then trying to find a code that fits it.
    Ms. Taylor. Correct. And what we do is we work with the 
provider. So if we identify an overpayment, we tell them what 
documentation is missing. Sometimes they just can't find it. 
They don't have it.
    But we cannot allow the payment because, technically, there 
isn't the log there to show that they did see the patient or 
that the patient did have the clinical condition as described 
in the code. But we do try and work with them to make sure they 
understand what is creating the improper payment, give them an 
opportunity to provide the documentation. If they still can't, 
we do have to collect the money.
    Mr. Simpson. Well, thank you. Thanks for the work you do. I 
know it is a difficult task to do, and all of us want to get at 
improper payments and especially that fraud that occurs out 
there. And what we can do to address that certainly will help 
with the budget and the overall situation we are facing.
    So thanks for what you do.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. We all appreciate what you are doing because we 
are all looking for money so we can spend it. [Laughter.]
    For good things, good things. To help cure people. And 
frankly, I have been working on this issue for so many years, 
and I don't even know if all the recommendations regarding 
computers that talk to each other have been put in place.
    How long, Rosa, have we been working on that? It is 
astonishing because it seems to me if you have the appropriate 
technology, you could identify more easily some of these 
issues. That is why I wonder, Ms. Taylor, as I mentioned to Mr. 
Levinson, last week, Secretary Sebelius testified before the 
subcommittee that the proposed 10-year investment in CMS 
program integrity in the fiscal year 2012 budget request will 
yield $10,300,000,000 in Medicare and Medicaid savings.
    Can you tell me more clearly how did the administration 
arrive at the $581,000,000 discretionary funding proposal for 
fiscal year 2012 to improve CMS program integrity?
    Ms. Taylor. I can tell you how we came up with portions of 
that $500,000,000. I can speak for the CMS pieces of that. It 
is, in fact, to help some of our systems be able to talk to 
each other.
    We have----
    Mrs. Lowey. Are they talking to each other now?
    Ms. Taylor. Well, we have shared systems.
    Mrs. Lowey. I am afraid to hear the answer. Rosa, we have 
been sitting here next to each other for 20 years. Yes?
    Ms. Taylor. We have shared systems that manage our 
inpatient and Part A claims. We have shared system that manages 
our Part B physician and outpatient claims. And we have shared 
system that manages our DME, durable equipment, such as 
wheelchairs, claims. And it is very difficult to get these old 
systems to be able to talk to each other.
    So there is a piece of it there. It is to be able to have 
real-time access to claims data. We have to pay within 14 days 
of a claim being submitted to Medicare. And so, being able to 
be in that front while we are trying to adjudicate the claim, 
check it against all the edits, make sure it is coded 
correctly, do all those things, it is very difficult to, at 
that point, have interventions to look at the claim and do some 
real human kinds of reviews on it.
    So it would help us to have some real-time data. So it was 
not only to just expand some of the fraud and abuse stuff that 
would be related to provider screenings, but also some real 
systems initiatives that we need.
    Mrs. Lowey. Mr. Chairman, I think that is something we have 
to look at again because this issue has been discussed as long 
as I have been here on this committee, which is quite a while. 
And we are all trying to look and see how we root out fraud and 
abuse. We all understand that we have to do something about the 
deficit.
    And to have equipment in place that is antiquated or not 
sufficient just doesn't make any sense. So if you can provide 
additional information to us, maybe this year, we will resolve 
it.
    Thank you.
    Ms. Taylor. I would be happy to.
    [The information follows:]

    Ms. Taylor: In FY 2012, the Administration has requested historic 
levels of funding to support CMS' program integrity work and our HHS 
and DOJ law enforcement partners' criminal, civil and administrative 
enforcement activities. The Administration is seeking $581 million in 
HCFAC discretionary funds, a $270 million increase in discretionary 
funds compared to FY 2011, which have shown a strong return-on-
investment (ROI) and successful recoveries to the Trust Funds. CMS' 
Actuaries have determined that the multi-year discretionary HCFAC 
investment, starting with $581 million in FY 2012, is estimated to save 
$4.6 billion over five years and $10.3 billion over ten years.
    The increase in funds for FY 2012 will be split among CMS and its 
law enforcement partners and be used to continue and expand program 
integrity efforts. It supports ongoing efforts by the Administration to 
reduce the Medicare FFS error rate, rate expansion of HEAT Strike Force 
and civil pharmaceutical fraud and medical device enforcement 
activities, and will also be used to deploy new and innovative efforts 
such as:
    (1) State-of-the-art data analytics and national pre-payment edits 
to prevent potentially wasteful, abusive, or fraudulent payments before 
they occur;
    (2) The build-out of the Compromised Beneficiary and Provider 
Numbers database;
    (3) Further expansion of the Integrated Data Repository;
    (4) Enhancements to the Do Not Pay list;
    (5) Development of HEAT complaint maps to help target priorities 
and identify geographic ``hot spots.''

                         RECOVERY AUDIT PROGRAM

    Mr. Rehberg. In the fiscal year 2012 budget, it is 
anticipated a recovery of $2 billion, which is about 3 percent 
of the overpayments. Is that a reasonable number?
    Ms. Taylor. I think you are referring to the recovery audit 
program?
    Mr. Rehberg. Yes.
    Ms. Taylor. And I know that we made up some portions of 
that. I think that is a Government-wide number. I think, as I 
mentioned, we already have collected over $250,000,000 to date 
on recovery audit. And in the first year of a program that 
large, we anticipate that it will scale up and that we will 
start to see trends go higher.
    I can't speak for the whole Government, but I think CMS 
believes we will be able to have significant savings----
    Mr. Rehberg. Well, I think it is anticipated your area is 
going to increase to $900 billion of expenditures by 2018. And 
if you have a 10.5 percent problem, it is astronomical to even 
think about it. So I just worry that $2 billion, or 3 percent, 
is unreasonable.
    Mr. Skelly. At least the Department of Education, the way 
we are approaching it is trying to prevent the overpayments, 
not that we are not going after the recoveries. And in Pell 
grants, we would have a pretty low recovery rate. It takes some 
time to get the money back.
    But by preventing that $340 million in overpayments from 
occurring, we think we are contributing to the reduction of the 
deficit.
    Ms. Gilbert. One of the tools that our States now have, as 
I mentioned in my testimony, is the Treasury Offset Program. As 
a result of the President's executive order, Treasury made some 
changes in how they permit the States to actually collect debts 
directly with them. And so, that we now have that tool 
available and will expect our collections to begin to go up as 
a result.
    Ms. Colvin. We have similar tools to the Treasury offset, 
and we do most of that on collections through reductions in 
benefits if monies are owed. So we do try to recover, and our 
recovery rate has been consistently improving.
    Mr. Rehberg. Okay. Ms. DeLauro.

                            IMPACT OF H.R. 1

    Ms. DeLauro. Thank you very much.
    Let me just direct a quick question to you, Gay. H.R. 1 
would cut funding for the administration's program to reduce 
overpayments in a variety of programs, including UI. It would 
cut ten million dollars from the partnership fund for reducing 
fraud and abuse?
    Ms. Gilbert. The $10,000,000 from the partnership fund, are 
you talking about OMB's partnership fund?
    Ms. DeLauro. OMB. OMB's partnership fund, I am sorry.
    Ms. Gilbert. Right. They have a $37,000,000 pot and we are 
getting some tiny piece of that. But that would, if we have new 
strategies that they can help us with, yes, that would prevent 
us from having additional tools.
    Ms. DeLauro. Okay. Is there something that the 
administration, as I understand it, has put into practice 
called the ``unified do not pay list.''? That is that people 
who have been listed as being barred, who are under 
investigation, or deceased, is that right?
    I don't know what the other criteria are. Maybe it would be 
useful to know that and where that stands, if somebody could 
get that back? I mentioned the deceased part of it because we 
have had an enormous problem in agriculture with improper 
payments in that arena where we have seen that year after year, 
people who are deceased are continuing to get subsidies.
    So it would be interesting, more than interesting. I would 
like to know what we have out there and what the criteria are 
and how that is moving along so that we know that we are 
barring people who don't need to have these payments any 
longer.
    Ms. Taylor, let me ask you this question. The Affordable 
Care Act, can you describe briefly for us the provisions of the 
act that strengthens the authorities of CMS to reduce fraud and 
abuse?
    Ms. Taylor. Well, you are really getting out of my area of 
expertise. But I can tell you that the bulk of it is exactly 
the point of being able to prevent and detect up front. And 
there is a lot of screening capabilities in there for provider 
enrollment, and that is one tool the agency is looking forward 
to having. So----
    Ms. DeLauro. Ms. Gilbert, the company, is it TALX?
    Ms. Gilbert. Yes.
    Ms. DeLauro. They handle more than 30 percent of the 
Nation's requests for jobless benefits. They have come to 
dominate the industry.
    Without admitting fault, they paid a $12,000 fine in 
Connecticut, in a Connecticut case, agreed to tell clients in 
writing that it would not file basis appeals. And what they 
were trying to do, as I understood it, is really work to deal 
with not allowing for people's benefits, genuine benefits that 
they were entitled to.
    What is the department doing in that regard to address 
fraud that allows some people to keep the unemployed from 
collecting their benefits? And I don't know if you can share 
with us, the committee, the cases that were successfully 
challenged, the number that was successfully challenged by 
their employer.
    Ms. Gilbert. First of all, let me say that employers or 
their third-party administrators sort of game the system to 
prevent individuals from receiving benefits is of concern to 
the department. We have heard that concern from States, and I 
know that Connecticut has been particularly aggressive in their 
own State law in trying to control third-party administrators 
and being sure that they are doing things properly.
    We have had conversations with TALX and expressed that 
concern as well, and their response to us is that they are 
taking steps to train their staff better to avoid this kind of 
activity. I will say that our Integrity Act speaks to this 
issue and----
    Mr. Rehberg. If you would like to submit----
    Ms. DeLauro. Thank you. If you could get us that 
information, it would be great.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Mrs. Lowey, last question.
    Mrs. Lowey. Yes, and I will ask it very quickly. Last year, 
Congress passed the Improper Payments Elimination and Recovery 
Act. Maybe we can end this hearing on a high note.
    How much money does your department estimate it will save 
in implementing the law? And you could respond very quickly.
    Ms. Gilbert. I don't believe we have actually done that 
estimate. We would be glad to go back and do that and provide 
that to you.
    [The information follows:]

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    Mrs. Lowey. Okay.
    Ms. Taylor. I am not sure we have done that either, but we 
do know that recovery auditing is a huge saver for us.
    Ms. Colvin. Well, we have certainly seen a direct 
correlation between our program integrity initiatives and the 
accuracy rate. And we have found that when we have adequately 
sustained funding that we do, in fact, reduce our inaccurate or 
improper payments.
    As I mentioned before, for every $1 that you invest in us 
for CDRs, you get $10 back in taxpayer money. For every $1 that 
you invest in redets, you get $7 back. And with the AFI, if we 
are able to fully implement that, as we plan to do by 2013, you 
would be getting back $20 for every $1 that you invest.
    So I would say that if you would give us the adequate and 
sustained funding, significant dollars will come back, billions 
of dollars to the taxpayers.
    Mrs. Lowey. Mr. Skelly.
    Mr. Skelly. And at Education, I would hope we get the 
adequate resources also, and we don't have an estimate for the 
Improper Payment Act by itself. But consistent with that is our 
Pell grant proposal, where we think we would prevent $340 
million in improper payments.
    Mrs. Lowey. Maybe we can get some of this money back and 
use it wisely.
    Mr. Rehberg. That would be nice.
    Mrs. Lowey. Thank you, Mr. Chairman.
    Mr. Rehberg. Once again, thank you for being here and all 
the work you do.
    This meeting is adjourned.

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                                        Wednesday, April 6, 2011.  

                     NATIONAL LABOR RELATIONS BOARD

                               WITNESSES

WILMA LIEBMAN, CHAIRMAN, NATIONAL LABOR RELATIONS BOARD
LAFE SOLOMON, ACTING GENERAL COUNSEL, NATIONAL LABOR RELATIONS BOARD
    Mr. Rehberg. Good morning and welcome. It is nice to have 
you here.
    I want to welcome the National Labor Relations Board to our 
hearing today. We hold pretty closely to the time, and we will 
get many rounds in as we possibly can, and we will end promptly 
at noon, respecting your time.
    And we will begin by an opening statement by our ranking 
member, Ms. DeLauro. Rosa.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    I want to welcome our speakers and guests this morning and 
thank you for joining us to testify.
    Seventy-six years ago, the National Labor Relations Board, 
the subject of our hearing today, was established by an act of 
this Congress when the National Labor Relations Act, or the 
Wagner Act, became law. By granting workers the freedom to form 
or join labor organizations and designate representatives, the 
goal of the NLRA was to, quote, liberate the common man, end 
quote. As its Senate author, Robert Wagner, put it so 
eloquently, to empower employees to represent themselves in the 
workplace. This, of course, is one of the fundamental 
democratic principles at work.
    The NLRB's charter and structure was amended to meet 
Republican concerns in 1947 by the Taft-Hartley legislation.
    Today, the NLRB is simply doing its job as outlined in 
these two acts of Congress. Specifically, it works to find fair 
remedies for employees and employers in workplace disputes and 
prosecute violations whenever they may have occurred.
    So, quite frankly, I find it peculiar from a budgetary 
perspective as to why we are having this hearing today. Of all 
the budgets to look into, I am not sure why we are taking this 
time to scrutinize an agency with a total budget of 
$283,000,000. This is especially so given the broad 
jurisdiction of this subcommittee, which includes bigger 
budgets, such as the $32,000,000,000 allotted to the National 
Institutes of Health, the $11,000,000,000 to the Centers for 
Disease Control and the $12,500,000,000 to the Social Security 
Administration. So this does not seem a balanced and credible 
approach to the oversight this subcommittee is charged with.
    Perhaps today's hearing only makes sense when put in the 
context of recent events in Wisconsin, Ohio, and Indiana. 
Perhaps this hearing is only understandable as another front in 
the current ideological assault we are seeing the majority wage 
against workers' rights all across the country. Apparently, the 
majority has decided they want to try to stir up an anti-union 
wind here in Washington as well.
    In fact, there is nothing radical about the mission of the 
NLRB or the way it goes about doing its job. The Board's 
function is to defend rights that we should consider 
fundamental: the right to form or join a union, the right to be 
represented by that union in dealings with an employer, and the 
right to be free from retaliation from doing so. The Board also 
enforces laws that protect employers and third parties against 
certain practices by unions considered to be unfair or harmful.
    What is radical is the anti-union measure that this 
majority has tried to enact as part of, in my view, their 
reckless and misguided budget. By cutting the NLRB funding by 
$50,000,000, the majority's appropriations proposal in H.R. 1 
would force the Board to cut back all agency operations. That 
includes investigating charges of unfair labor practices 
brought by workers or by management, holding secret ballot 
workplace elections, and settling or adjudicating election 
related disputes. In addition, the Board could be forced to 
furlough its staff for up to 3 months.
    Obviously, these rollbacks and furloughs would undermine 
workers' rights throughout the country. In fact, that is 
exactly the point. Just as Republican Governors are attempting 
to roll back workers' rights in Wisconsin and Ohio under the 
guise of deficit cutting, the majority is not pushing a cut 
here to the NLRB for budgetary purposes. It seems to me a hard 
argument to make that this action is motivated by fiscal 
reasons. As in the Wisconsin and Ohio budgets, the severe cuts 
to the NLRB are not a serious attempt to restore jobs, restore 
economic growth, or address budget deficits. Rather, these cuts 
are an attempt to accelerate a race to the bottom; and they 
will further harm middle-class families who are already dealing 
with a tough economy.
    I thank the chairman.
    Mr. Rehberg. Thank you.
    Ms. Liebman.
    Ms. Liebman. Thank you.
    Chairman Rehberg, Ranking Member DeLauro, and members of 
the subcommittee, I am pleased to appear before you this 
morning with Lafe Solomon, our agency's Acting General Counsel. 
Thank you for your invitation.
    Before discussing our budget, I would like to take a moment 
to talk about the importance of this agency in historical 
perspective.
    Our current labor law is fundamentally a product of the 
Great Depression, when millions were out of work. Labor 
conflict was widespread, with violence common. In the summer of 
1935, responding to this crisis, Congress passed the National 
Labor Relations Act.
    It is worth remembering why Congress did what it did. To 
quote Section 1 of the new law: ``The inequality of bargaining 
power between employees and employers substantially burdens and 
affects the flow of commerce and tends to aggravate recurrent 
business depressions by depressing wage rates and the 
purchasing power of wage earners.''
    In other words, the National Labor Relations Act was seen 
as a means of restoring the Nation to economic prosperity. The 
new law articulated basic rights, the right of workers, free 
from intimidation, to act together to improve their terms and 
conditions of employment and the right to bargain collectively 
with their employer.
    The Act established a permanent independent agency to 
conduct elections in workplaces and to remedy unfair labor 
practices. Over the next decades, millions of workers achieved 
a middle-class way of life through collective bargaining and 
agreements that provided fair wages and benefits in major 
industries of the economy.
    Labor law continues to trigger passionate debate, as we 
have seen in Statehouses and at the Federal level in recent 
months. Although I might wish it were less rancorous, I welcome 
the controversy. Its intensity is a sign that labor law still 
matters deeply in this country.
    Labor law matters because democracy in the workplace is 
still basic to a democratic society and because collective 
bargaining is still basic to a fair economy. It allows labor 
and business to reach their own solutions in response to 
changing economic conditions.
    The sharp debate over this law, which has not been 
significantly amended since 1947, has sometimes had a big 
impact on the Board's functioning. Contentious debates in the 
Senate over confirmation of a President's nominees have 
resulted in long-standing vacancies, often leaving the Board at 
less than full strength. Indeed, for 27 months, ending in 
April, 2010, the Board was reduced to just two members, member 
Peter Schaumber and myself.
    Despite our significant political differences, we worked 
hard to resolve as many cases as we could and eventually issued 
nearly 600 unanimous decisions. The Supreme Court undid some of 
that work with its June, 2010, decision in New Process Steel v. 
NLRB, finding that the Board needed at least three members to 
issue decisions.
    The Board has now been reconstituted for the last year. We 
have issued new decisions in 97 cases that were returned to us 
as a result of the Court's decision. Only seven such cases 
remain pending. We have also tackled many formerly deadlocked 
cases that had languished for years.
    The Acting General Counsel will talk more specifically 
about our budget request and his side of the agency which 
employs the bulk of our employees.
    On the Board side, we have significantly streamlined our 
operations as the number of cases brought to the Board for 
decision has declined. Our staff has gone from 153 full-time 
equivalents in 2001 to 113.2 FTEs in 2011.
    Also, the number of Administrative Law Judges who hear 
unfair labor practice cases around the country has dropped from 
60 to 40 during the same period. We have also moved to a model 
that allows our ALJs to work from home, thereby reducing 
infrastructure costs and creating a more mobile adjudication 
system.
    We have initiated technology reforms, such as our new 
electronic agency-wide case processing system called NextGen. 
The investment in that technology will pay rich dividends and 
result in significant savings for the taxpayers in the long 
run.
    Meanwhile, in fiscal year 2010, case intake crept up after 
years of decline. This agency clearly still has an important 
role to play in the Nation's economy, and we need adequate 
resources to carry out our statutory responsibilities.
    Mr. Chairman, the 2012 budget request before you will allow 
our agency to keep up with the rising costs of rent and 
compensation in the short term and allow the agency to continue 
its trend toward a more efficient workforce in the long term. I 
look forward to working with you and this committee to ensure 
that the National Labor Relations Board and the National Labor 
Relations Act continue to endure and play an important role in 
the Nation's economic recovery.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    Mr. Solomon.
    Mr. Solomon. Mr. Chairman and distinguished members of the 
subcommittee, it is an honor and a privilege to appear before 
you today as the Acting General Counsel of the National Labor 
Relations Board. Indeed, for a kid who grew up in Helena, 
Arkansas, and has now worked for the NLRB for nearly 39 years, 
honor and privilege feels like an understatement.
    My 9 months as Acting General Counsel have been both 
challenging and rewarding. Like the General Counsels before me, 
I have emphasized the need for the regional offices to seek 
effective remedies for the most serious unfair labor practices. 
I am proud that in its first 4 months my initiative to seek 
quick injunctive relief for employees unlawfully discharged 
during an organizational campaign has resulted in 42 offers of 
reinstatement and over $350,000 in back pay, with the average 
case taking just 61 days to process. I am also proud that we 
successfully ran the largest mail ballot election in our 
history last October, a unit of approximately 43,000 employees.
    But whatever successes I have had are due mainly to the 
dedicated and talented career employees that we have at every 
grade level throughout the agency. They believe passionately in 
the mission of the agency and the Act that we administer and 
work tirelessly to enforce the rights and obligations of 
employees, unions, and employers under the Act.
    The agency is all about people. In recent years, 25 to 
30,000 charges and petitions have been filed annually in our 
offices around the United States. Each case is assigned to one 
of our 1,170 employees in our 51 field offices, and we have 
been remarkably successful year after year in resolving these 
cases quickly and efficiently.
    Some statistics from fiscal year 10 illustrate this point: 
86 percent of all representation cases were resolved within 100 
days; 73 percent of all unfair labor practices were resolved 
within 120 days; approximately 85 percent of meritorious unfair 
labor practices are closed in compliance within one year. The 
regional offices recovered over $86,000,000 on behalf of 
employees, and over 2,200 employees were offered reinstatement.
    The Board's ability to resolve so many controversies in a 
relatively brief period significantly contributes to the 
maintenance of industrial peace, thereby saving expense to 
respondents, charging parties, and to the taxpayers. Yet these 
impressive results are completely dependent on our ability to 
maintain adequate staffing levels. Without adequate 
appropriations to maintain sufficient agency personnel to 
handle these cases, delays and backlogs will inevitably 
increase and the benefit of quick resolution to cases will 
evaporate. In short, budget shortfalls have a direct impact on 
staffing resources, case handling, and agency performance.
    The $287,700,000 requested in the President's budget will 
fund our essential staffing and case handling needs necessary 
to fulfill the agency's mission and goals. Most of our proposed 
fiscal year 2012 budget, about 80 percent, is dedicated to 
personnel costs; about 10 percent is required for rent and 
security; and the remaining percentage is allocated among all 
other operating costs and activities. The $4,300,000 increase 
we seek for fiscal year 2012 is less than a 2 percent increase 
over our current funding level of $283,400,000 and is needed to 
keep pace with increased personnel costs associated with a 
stable, long-tenured workforce and increases in rent and travel 
costs.
    We are also in the process of studying how, using our 
present and future technological advances, the agency would 
work in a more efficient and cost-effective manner. To this 
end, Chairman Liebman and I have created an agency-wide work 
group, including representatives from our regional offices, our 
headquarters, and our employee unions. We have instructed this 
group to do a comprehensive assessment of the agency's 
structure, processes, and footprint and to make recommendations 
to us by the end of this fiscal year of options for us to 
consider.
    I am proud to be associated with the traditions that have 
made the headquarters and field operations of the Office of 
General Counsel such a fine example of effective public 
service. We look forward to working with you, Mr. Chairman, 
with this committee, and with Congress on this very important 
mission.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    In relation to the reason for the hearing, some of us don't 
feel that a $290,000,000 budget is chump change. It is not a 
rounding error in the Federal Government. I hope I never get to 
the level of cynicism that each and every agency should not be 
looked at with a fine tooth comb. If we had the time, we would 
be looking at every agency possible, but we just don't have 
that time.
    So I don't want you to think there is some nefarious reason 
for you sitting here, other than the fact I asked the staff 
which agencies have not had oversight within the most recent 
memory. I asked the Senate, I asked the members of my 
subcommittee, and they all agreed that this was one of the 
areas that we just had some questions, and we wanted to take a 
look at the budget, and we worry about the caseload and your 
ability to pay for it based upon the budget we are presenting.
    Last December, the Board published a rather substantive 
notice of proposed rulemaking requiring over 6,000,000 private 
employers to post a government notice about union rights in the 
workplace. If an employer were to fail to post this notice, it 
would be construed as unfair labor practice, thereby exposing 
themselves to penalties or other sanctions.
    I understand the Labor Relations Act, which hasn't been 
changed in a while, provides the Board with authority to make, 
amend, and rescind such rules and regulations as may be 
necessary to carry out the provisions of the NLRA. However, the 
NLRA does not require the posting of employee rights. Under 
what authority can the Board require these notices to be posted 
and assign a penalty for failing to do so?
    Ms. Liebman. Yes. Thank you, Mr. Chairman, for that 
question.
    Let me start by saying that the Board does have authority 
in its statute to issue rules and regulations, as you 
mentioned, section 6. The Supreme Court has affirmed that the 
Board has the authority to do its business either through 
adjudication or through rulemaking.
    The Board has historically chosen not to do much in the way 
of rulemaking. The petition that you mentioned was actually 
pursuant to a petition filed with us in 1993 by Professor 
Charles Morris, a law professor. Lest anyone say we act 
precipitously, that has been pending since 1993. We put it out 
for proposed rulemaking, and one of the specific questions that 
we asked for comment on was our authority to issue this 
rulemaking----
    Mr. Rehberg. Including penalties?
    Ms. Liebman. Yes.
    Mr. Rehberg. So you have the statutory authority to 
establish a penalty for not having----
    Ms. Liebman. We have put out for comment that precise 
question.
    I should say that in the notice of proposed rulemaking it 
is quite clear that this is not intended to be a "gotcha" for 
employers. The clear intent was and the stated intent in the 
proposed notice is that if this is brought to an employer's 
attention----
    Mr. Rehberg. I am not understanding. You put out for a 
question of the rulemaking as to whether you have the legal 
authority to apply a penalty or not?
    Ms. Liebman. Yes. Yeah. We--every----
    Mr. Rehberg. Why wouldn't you know that from your legal 
counsel going into it, whether you have the legal authority to 
apply a penalty?
    Ms. Liebman. We clearly believe we have the authority. We 
believe this rulemaking is soundly within section 6 of our law, 
which says that we have the authority to issue regulations to 
effectuate the purposes of this Act. What we do is adjudicate 
unfair labor practices, and we believe that the failure to post 
a notice of this sort, once it was brought to the employer's 
attention--we are only looking to impose a penalty for willful 
violations.
    Mr. Rehberg. Do you then intend or have you asked within 
the proposed rule Beck rights? Is it going to be an equal 
application to an employee's Beck rights?
    Ms. Liebman. Yes, that is another question which we posed. 
We are not proposing to require a posting of Beck rights 
because, in fact, the law already requires that unions provide 
Beck rights anytime they initially seek to represent a unit of 
employees, to seek to execute a union security agreement. So 
that full notice of Beck rights is already provided in our law. 
It would only apply in certain States, and it would only apply 
in cases where the workforce was unionized, which, as you know, 
is a small percentage of workplaces today.
    Mr. Rehberg. Do you have any of these that you intend to 
have the rulemaking authority? I don't know how many you have 
going on. First of all, maybe you can answer that. How many 
other rulemaking authority proposals do you have out at this 
time?
    Ms. Liebman. We have one out at this time.
    Mr. Rehberg. Just this one?
    Ms. Liebman. Yes.
    Mr. Rehberg. Do you intend to publish it before the end of 
the fiscal year?
    Ms. Liebman. We are in the process right now of reviewing 
almost 7,000 comments that were filed with us. So it is hard to 
predict exactly what the time frame would be. We are engaging 
in a staff review of these comments, and then everything will 
have to be brought back, and we would only be publishing a 
final rule if we had a majority vote to do so.
    Mr. Rehberg. Ms. DeLauro.
    Ms. DeLauro. Just a quick point of clarification, and then 
I will move to other questions.
    Employers have to post notices regarding the minimum wage 
under the Fair Labor Standards Act and impose penalties and 
other pieces of legislation. Can you----
    Ms. Liebman. That is correct. I think virtually every piece 
of Federal workplace legislation requires a posting of a notice 
of rights, worker rights, under those statutes, except for the 
National Labor Relations Act.
    Ms. DeLauro. Just for that measure. Thank you. Thank you 
very much for the clarification.
    Ms. Liebman, H.R. 1, the majority's 2011 appropriations 
package that passed the House in February, cut the NLRB's 
budget by $50,000,000, or 18 percent. Because the cuts were 
made halfway through the fiscal year, their effect would 
effectively be doubled, to more than 36 percent in terms of a 
reduction. What would be the effect of this reduction on the 
NLRB's ability to carry out its responsibilities? Would you 
have to furlough employees? How many? What other steps would 
you have to take?
    Ms. Liebman. Yes. Thank you, Congresswoman, for the 
question.
    We believe that this would be a very, very dramatic cut 
that would have a very detrimental effect on our agency's 
ability to do its work. As the Acting General Counsel said, our 
budget is 80 percent compensation and benefit costs. All we do 
is conduct elections and adjudicate unfair labor practice 
cases. That is all we do. That is what the statute says we have 
to do. So we don't have any programs that we can cut.
    So if we are forced to accept a drastic budget cut, we 
believe the only thing we could do is to furlough employees. If 
there were another way to do it, we, of course, would be open 
to considering it. But we have not been able to come up with 
another way to do it. Our budget director was following this 
very carefully and advised us that if the proposed cut went 
into effect we would have to furlough every person in the 
agency for 55 days, which would essentially be half the time 
between now and the end of the fiscal year.
    Ms. DeLauro. Just a follow-up on that. You outlined the two 
main functions, arranging and conducting elections to determine 
whether workers wish to be represented by a union and 
investigating and adjudicating complaints of unfair labor 
practices by either employers or unions. Both of the functions 
are initiated when some private party asks the NLRB to take 
action; is that correct?
    Ms. Liebman. Yes, that is correct. We do not initiate our 
own cases.
    Ms. DeLauro. So the Board doesn't initiate investigations 
or call elections on its own.
    Ms. Liebman. That is correct.
    Ms. DeLauro. Okay. So workers ask for an election to be 
held, to determine whether a union should be certified, or 
decertified, as their bargaining agent or someone--worker, 
union, employer--files a complaint charging that an unfair 
labor practice has been committed. Since all you do is respond 
to requests for action by citizens, if the budget is cut as 
dramatically as it is intended to be and with the consequences 
that you have talked about, the inevitable result in your view 
is that--is this correct--the citizens seeking action will have 
to wait longer, get less effective responses--often in cases 
where action is sought to protect basic rights for workplace 
democracy?
    Ms. Liebman. Yes, that is correct. By definition, if we 
were forced to furlough our workforce for half the time, all of 
our work would be curtailed. Things would slow down.
    Workplace disputes don't go away just because our employees 
are furloughed. So the workplace disputes would continue to 
fester.
    We have a proud record of resolving these disputes very 
quickly. That clearly would be affected. Our ability to do that 
would be affected very detrimentally. And even as is, we 
occasionally will get complaints from some of your constituents 
that a case is dragging on too long. I know you get these 
complaints.
    Ms. DeLauro. Let me ask you one further follow-up. The 
recourse available to the worker who believes he or she has 
been fired for engaging in union activity, to give one example 
of the kind of violations that NLRB is responsible for 
investigating and adjudicating, would they be able to get their 
own lawyer, bring the case to court themselves? I believe the 
answer is no, that under the NLRA there is no private right to 
bring legal action to protect those rights.
    Ms. Liebman. That is correct.
    Ms. DeLauro. The only remedy, as I understand it, is by 
bringing the complaint to the NLRB.
    Ms. Liebman. That is correct.
    Ms. DeLauro. So if the NLRB doesn't have the funding to act 
on these complaints in a timely manner, then, in effect, there 
is no effective remedy for violations of the law that protects 
workers' rights and protects management against improper 
actions by unions, for that matter. Am I correct?
    Ms. Liebman. That is absolutely correct.
    Mr. Rehberg. Mr. Flake.
    Mr. Flake. Thank you. Thank you for the testimony.
    The budget justification mentions the agency requesting an 
increase of $4,300,000. What is that going to go to?
    Mr. Solomon. The $4,300,000 is to cover the compensation 
increases and the rent and security increases. So we basically 
would be where we are today.
    Mr. Flake. So it is just to stay afloat, the same kind of 
workload.
    The budget justification also mentions the effort to create 
an Office of Public Affairs and to create a Facebook page, 
Twitter page, new brochures, increasing public outreach, 
attending--it mentions that agency representatives participate 
in more than 500 events annually. Among other things, I think 
the display in the Mall of America in Minneapolis or the Plaza 
Las Americas mall in Puerto Rico. How much of the agency's 
budget is spent on travel to these kind of events, travel or 
participation?
    Ms. Liebman. I don't have the exact number, but our budget 
director is sitting behind me, and I think she probably can get 
you an exact number.
    I will tell you, though, that these expenditures are quite 
minimal. Our Office of Public Affairs was constituted as an 
Office of Public Affairs in September, 2009. It replaced the 
prior Division of Information. I believe actually we have three 
people in the Office of Public Affairs. Previously, 5 years 
ago, for example, there were six people. So we have actually 
shrunk the Office of Public Affairs.
    In terms of a Facebook page, a Twitter feed, or whatever 
you call it, that I think is what virtually every organization 
is doing today, including, I am sure, Members of Congress and 
congressional committees, to communicate with the public.
    Mr. Solomon. And if I could add, Congressman, the outreach 
program in the regional offices was established by my 
predecessor who put a very big emphasis on outreach. And 
regional directors are actually--part of their evaluation is 
the outreach program that their region conducts. And the reason 
that most of these activities are not costly is because they 
are conducted by the people in the regional offices that go to 
these various outreach activities.
    Mr. Flake. Can you walk me through a typical complaint and 
how it is handled?
    A complaint comes in to you. What is the first contact? At 
what point is the employer brought in? And just go through a 
typical complaint, if there is a typical complaint.
    Mr. Solomon. If the charge would be either against a union 
or an employer, but they would both be handled the same way. 
They are docketed in the regional office where they are filed 
and then the first contact would be that the region sends to 
the employer or the union, the charged party, the charge 
itself.
    Then the region would assign an investigator to that case. 
The investigator would start with the charging party, take the 
affidavit from the charging party, take the affidavit from the 
charging party's witnesses, and then would do the same for the 
charged party and go take their affidavits, collect their 
documents. And then the regional director will have a meeting 
to decide whether the case is meritorious or not meritorious.
    Two-thirds of our cases historically--two-thirds of the 
charges are dismissed or found to be not meritorious, and then 
the regional director would contact the charging party and ask 
them to withdraw or else the regional director would dismiss 
the charge. If the case is found by the regional director to be 
meritorious, then the charged party would be contacted, and 
they would attempt settlement negotiations with the parties.
    Mr. Flake. When you are talking about the 60-day average or 
a certain percentage are remedied in 60 days, is that referring 
to those that are found meritorious or including those that are 
dismissed?
    Mr. Solomon. The 61 days I referred to were cases in which 
the regional director found that employees were in fact 
discharged during a union organizational campaign for union 
activities and the regional director issued a complaint or at 
least told the charged party that they wanted to issue the 
complaint. And these cases were, in fact, settled prior to a 
hearing.
    Mr. Rehberg. Ms. Lee.
    Ms. Lee. Thank you very much. Good morning. Thank you, Mr. 
Chairman.
    First, let me thank you for being here, for your testimony. 
And let me just say I personally believe in the process of 
collective bargaining and the rights and protections that are 
afforded to workers, and I appreciate and fully support the 
work of the NLRB.
    Quite frankly, labor unions, worker rights, and collective 
bargaining really has provided a path for many people of color 
to achieve middle-class status, which unfortunately now is, due 
to the recession, is eroding.
    Last November, four States--I think it was Arizona, South 
Carolina, South Dakota, and Utah--adopted amendments to their 
constitutions that would eliminate an employer's right to 
voluntarily recognize a union when a majority of employees 
signed the authorization cards.
    Now, I know that legislation has been introduced in the 
House--I think it is H.R. 1047, the State Right to Vote Act--
which supports the rights of States to enact such laws. Other 
legislation that has been introduced really would eliminate all 
voluntary organizations. Have you had a chance to look at that 
legislation and how it would affect the NLRB and how it would 
really affect workers throughout the country, especially in 
these States?
    Ms. Liebman. I am going to make sure I understand your 
question, Congresswoman. You are asking about the legislation 
in the States or in the House?
    Ms. Lee. H.R. 1047, which is the State Right to Vote Act. 
Have you had a chance to look at that?
    Ms. Liebman. Is that the Secret Ballot Protection Act? Is 
that what that is called?
    Ms. Lee. Yeah.
    Ms. Liebman. Congresswoman, there is a long tradition among 
Board members, which is not to comment on pending legislation. 
So I would ask that you all would respect that tradition. And 
in point of fact I really haven't had a chance to study it.
    Ms. Lee. Have you had a chance to look at the States? Can 
you comment on what has happened in the States in terms of the 
amendments that would eliminate the employers' rights to 
recognize the voluntary----
    Mr. Solomon. Yes, Congresswoman. The special litigation 
branch, which is under my supervision, did an analysis of the 
amendments in the four States that were passed; and they 
advised me that these amendments directly conflicted with the 
National Labor Relations Act and with Federal law. And I agreed 
with their recommendation, and I asked the Board to authorize 
me to contact the attorneys general in the four States to 
advise them of our position that these amendments were 
preempted by the National Labor Relations Act.
    I wrote a letter to the four attorneys general. They 
responded, and we felt that they recognized that voluntary 
recognition was allowed under Federal law. So I wrote them a 
further letter that I thought that there were possibilities to 
enter into some sort of stipulation that these laws were 
preempted. The negotiations were not successful, and we are now 
studying what next step to take.
    Ms. Lee. Has this ever happened before? It sounds like 
there is a stalemate.
    Mr. Solomon. No----
    Ms. Lee. There is no standard kind of process that could be 
followed now that that impasse is there?
    Mr. Solomon. The Supreme Court has long recognized that the 
National Labor Relations Act has the authority to seek a 
court's order that State laws are preempted by the National 
Labor Relations Act and by the Federal scheme. My predecessors 
have taken very similar action to what I have done.
    At the recent hearing before the House Education and 
Workforce Committee, former General Counsel Arthur Rosenfeld 
agreed that he wrote a similar letter to the State of North 
Dakota that their law that they had passed was preempted. And 
we recently intervened on behalf of the employer's side for a 
case that went to the Supreme Court, Chamber v. Lockyer, which 
we argued that the law was preempted, and the Supreme Court 
agreed.
    Mr. Rehberg. Lest you think the chairman does not support 
job training, Kevin was in here over the weekend practicing 
with the clock. So far, he has only made one mistake.
    Mr. Alexander.
    Mr. Alexander. Thank you.
    Madam Chairman, good morning. How are you?
    From 2001 to 2010, the NLRB's budget has increased almost 
every year, but the number of NLRB employees has decreased 
during that amount of time. We are told in the NLRB's fiscal 
year 2010 budget justification that 80 percent of the agency's 
budget is dedicated to personnel costs. So that means that 
during that period of time that I just described each 
employee's salary would have gone up about $50,000. Can we 
justify that?
    Ms. Liebman. Well, thank you, Congressman.
    I am not sure that the starting premise is accurate, that 
the budget has gone up every year. I believe that in some of 
those years there was a fairly flat appropriation or maybe even 
a slight cut.
    I think during most of that time, there was a parity 
between the number of employees and the case decline. In fact, 
in 2010, we had a slight increase in our case intake. Our staff 
has gone down. But compensation and benefit costs are clearly 
outside of our control as are our rent increases. Certainly it 
is not accurate to say that everyone's compensation is 
increased by $50,000.
    We do however have a very senior workforce, long-tenured, 
people who have worked for the agency for many years, like our 
Acting General Counsel. We also have an agency that is heavily 
professional employees, 40 percent lawyers, who, by definition, 
are more highly paid.
    Mr. Alexander. Well, I am just looking at numbers from the 
Appropriations Committee. Let us go to 2001, 216,000,000; 226, 
237, 242, 249, 251, 262, 283. It seems to me like that is going 
up.
    Mr. Solomon, would you give us a couple of examples of 
unfair labor practice?
    Mr. Solomon. Certainly, Congressman.
    Seventy percent of our charges that are filed--and, as 
Congresswoman DeLauro said, we don't initiate any charges. 
Seventy percent are charged against employers, and a large 
percentage of those are that employees are discharged or 
otherwise disciplined for union activities. We also have 
charges filed by employees against unions, that they are not 
being fairly represented by the union. We have charges--
jurisdictional disputes between two unions, both claiming the 
work from an employer. We have secondary boycott charges. They 
run the gamut.
    Mr. Alexander. So you are saying that not all of the unfair 
practices are employers taking advantage of employees?
    Mr. Solomon. Correct. Correct.
    And could I go back to the question you asked the chairman 
about the budget?
    In the years between 2006 and 2008, we were at fairly flat 
budget increases that really didn't keep up with the 
inflationary compensation costs and rent and security. And we 
made many cuts to--we deferred employee training, we deferred 
IT investments, and the increases that you pointed out that we 
got in 2009 and 2010 really were to come back to these very 
important things for us to do.
    Mr. Alexander. Thank you. And I would like to remind the 
chairman that I have 26 seconds left. Thank you.
    Mr. Rehberg. Very good.
    Ms. Roybal-Allard.
    Ms. Roybal-Allard. Good morning and welcome.
    As I understand it, the NLRB recently proposed rulemaking 
that would require employers to notify employees of their 
rights under the National Labor Relations Act by simply posting 
a notice. And I understand there is a general consensus that 
employees lack information about their rights under the NRLA. 
How would the proposed rules address this information gap and 
if you could elaborate on maybe what some of the objections are 
to it?
    Ms. Liebman. The proposed notice posting is intended to 
address what we have reason to believe is a lack of awareness, 
by probably the vast majority of workers in the workplace 
today, that they have rights under the statute. I think it is a 
secret to some extent but a misperception that this law only 
applies in unionized workplaces. Actually, this law applies 
across the private sector to union and nonunion workplaces. I 
think the number is something like 6 million workplaces in the 
private sector.
    And we have reason to believe that particularly with the 
decline of organized labor, with an increasing immigrant 
workforce, and with a lot of young people coming into the 
workforce today who have had no exposure to this law or to 
labor unions, that there is a general lack of knowledge. So 
this proposed rulemaking is intended to address that lack of 
awareness by workers and also by their employers.
    We have reason to believe that a lot of businesses, 
particularly small businesses, particularly owned perhaps by 
younger people who also haven't had that exposure to this law 
and to labor unions and to what the law is about--so that is 
really what it is intended to do. It is intended to advise 
workers and their employers of these workplace rights, just as 
there is similar notices in workplaces about other workplace 
laws, minimum wage, et cetera, OSHA.
    Ms. Roybal-Allard. That just requires placing the notice?
    Ms. Liebman. That is correct.
    Ms. Roybal-Allard. There has been some concern voiced about 
how the Board is making decisions, whether or not they are 
within the discretion of the Board. Have the NLRB's recent 
decisions been consistent with prior precedents and within 
Federal law?
    Ms. Liebman. Yes, Congresswoman, I think they have 
definitely been within prior law. Let me just give you a little 
thumbnail sketch of what this Board has done in the last year.
    First of all, we have been reconstituted as a proper 
quorum, in accordance with the Supreme Court's decision, for 
exactly one year. During this year, we have issued 394 
decisions. Of those, approximately 100 were decisions issued as 
a result of the Supreme Court's decision overturning the two-
member decisions. So about 100 of these cases came back to us, 
and new decisions have been issued. I believe every one of 
those decisions has been a unanimous decision. In fact, the 
vast majority of our decisions are unanimous decisions. So that 
is number one.
    We have also dealt with some very old cases that had 
languished as a result of this 27-month two-member Board. My 
colleague, Member Schaumber, and I put aside about 60, 70 cases 
that remained deadlocked when we went to a two-member Board at 
the end of 2007. Those were difficult cases, precedent-setting, 
novel issues. We put those aside; and the new Board, once 
constituted, has begun to tackle some of those cases.
    Member Schaumber and I, I mentioned earlier, were 
successful in reaching agreement nearly 600 times over the 27 
months, but he and I put aside maybe 60, 70 other cases where 
we couldn't reach agreement. So, again, the new Board has had 
to tackle those. Almost by definition, what we have been 
dealing with have been difficult issues, novel issues, issues 
that require delicate line drawing. I believe that all of those 
decisions have been well within the letter of this law, clearly 
within the letter of this law, the intent of this law, and 
within Supreme Court doctrines.
    I thought my time was up.
    There has been----
    Mr. Rehberg. It is.
    Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.
    Mr. Rehberg. That is what happens when you hesitate.
    Mrs. Lummis. Following on this same line of questioning as 
the previous colleague about the notice of the proposed rule, I 
understand your interest in wanting to inform employees of 
their rights to unionize, but I don't understand why this 
proposed rule is not balanced. Why does it not inform employees 
of the consequences of unionization, such as the loss of the 
ability to bargain directly with management? Why does it not 
inform them of their right to withhold portions of their union 
dues or fees that are used for political purposes that they 
don't espouse? My concern is that the notice is about the 
rights to unionize and not the consequences of unionization. It 
is not a balanced rule. Could you comment on that, please?
    Ms. Liebman. Yes, thank you.
    First of all, we put out the notice for public comment. We 
have received nearly 7,000 comments which we are in the process 
of reviewing. We expressly asked for comments on a whole range 
of subjects, including the contents of the notice. So I am 
assuming we are going to have comments on that. We have staff 
reviewing all of that right now.
    We started out in this proposed notice using the notice 
that has been now adopted by the Department of Labor for 
Federal contractors. So our starting premise was the notice 
that they proposed, got comments on and I believe have now 
adopted.
    Mrs. Lummis. So that is the one that is basically informing 
people of the rights to unionize but not the rights they are 
giving up if they choose not to unionize?
    Ms. Liebman. I don't have the notice language in front of 
me, but what I know it expressly said is that you have the 
rights to engage in activity to unionize and to improve your 
terms and conditions of employment. It sets out all the rights, 
and then it expressly said, or the right to refrain from any of 
those activities. So that is what section 7 of our Act, the 
free choice provision says. You have the right to do all of 
these things, and you have a right to refrain. That, in my 
view, is a balanced notice.
    Mrs. Lummis. But it doesn't talk about the consequences, 
the loss of the right to bargain directly with the employer.
    Ms. Liebman. It probably does not spell that out. It 
doesn't spell out every nuance of Federal labor law and what it 
means to bargain collectively or----
    Mr. Kingston. Would the gentlewoman yield?
    Mrs. Lummis. Yes, I will.
    Mr. Kingston. I think the question is, is it proposed in a 
balanced way or does it just have that one-line disclaimer at 
the end of a long list of this is what you can do, tilting it 
in favor of joining the union?
    Ms. Liebman. Well, I think that the notice pretty closely 
mirrors the language of the statute, the way the rights are set 
out in the statute. It makes clear what your rights are--what 
an employee's rights are with respect to an employer and to a 
union, if you happen to have one; and it sets out the right to 
refrain from any of these things, which is exactly what the 
statute says. I think it is fairly close to the language of the 
statute.
    Mrs. Lummis. Will the gentleman yield back?
    Mr. Kingston. Yes.
    Mrs. Lummis. Thanks.
    I also have a question about a case, especially health 
care, a case where apparently a union seeking to organize 
nurses apart from other employees in a non-acute health care 
facility and that that case may be an avenue to expand the 
concept of micro unions and micro bargaining to all occupations 
and industries. So my question is, what is the reasoning behind 
considering an expansion of the standard beyond non-acute 
health facility workers?
    Ms. Liebman. I believe, Congresswoman, that what we have 
done in that case----
    First of all, it is not nurses. It is nursing assistants. I 
think it is certified nursing assistants. And what we have done 
is to ask for a briefing on the experience--since for about the 
last 20 years, under a decision called Park Manor, which was a 
decision of the Board through adjudication dealing with 
bargaining units in non-acute care health care facilities. It 
followed really the first and essentially only substantive 
rulemaking that the Board has done in its history, in the late 
1980s, where it decided what the appropriate bargaining units 
would be in acute care hospitals.
    That was done by informal rulemaking, by the way, and was 
challenged. It was challenged on the grounds that the Board 
should have done it through adjudication. The rulemaking was 
upheld by the Supreme Court unanimously saying that the Board 
is free to do rulemaking or adjudication.
    Mr. Rehberg. Thank you.
    Introducing a new member to the committee, Mr. Kingston. 
Welcome. It is nice to finally meet you in person.
    Mr. Kingston. Good to see you, Mr. Chairman.
    Madam Chair, I wanted to get back on that notice. Is your 
intention to give employees all the information, correct?
    Ms. Liebman. Well----
    Mr. Kingston. In an unbiased way? Is that your intention?
    Ms. Liebman. Our intention is to raise awareness, as I 
said, of workers and their employers----
    Mr. Kingston. But not to give it to them in an unbiased, 
balanced way? That is really my only question. Is it your 
intention to give it to them in a fair and balanced way?
    Ms. Liebman. Yes, absolutely.
    Mr. Kingston. Then you would be in support of a bill or 
report language that reinforces that position in the House, 
correct?
    Ms. Liebman. I'm sorry?
    Mr. Kingston. You would be in support of bill language or 
report language that reinforces that position, that the intent 
is to give information to employees in a fair and balanced way?
    Ms. Liebman. Yes our intent is to give the information in a 
fair and unbiased way. Of course.
    Mr. Kingston. Thank you. And I hate to cut you off, but I 
know this chairman is notorious for being a timekeeper and so I 
just wanted to kind of move it quickly. Not that you ever 
would, but some witnesses do tend to run the clock on answers. 
And I think Mr. Solomon, the lawyer, I would be more suspicious 
of him than you.
    Mr. Solomon. The chairman is a lawyer, also.
    Mr. Kingston. Well, then I am suspicious all the way 
around.
    So ``quick snap'', Mark Pearce has said he wants to 
implement quick snap. Is it your intention to do that?
    Ms. Liebman. Quick snap meaning----
    Mr. Kingston. Quick snap, faster elections to unionize--as 
I understand it, the average election is 38 days. This would 
reduce it to a 5- to 10-day period of time.
    Ms. Liebman. I think the median time for our elections 
presently is 38 days. We are giving active consideration to 
another rulemaking which would look at our procedures for 
conducting secret ballot elections. Our secret ballot elections 
are conducted pursuant to procedures that the Board has devised 
over the years. Periodically over our 75 years, the Board has 
looked at them and revised them. We are examining them to see 
if the procedures still work, if there are procedures that are 
unnecessary, if there are procedures that detract from the 
effective conduct of these elections.
    Mr. Kingston. Well, Mr. Pearce comes at it with a bias, a 
very pro-union background. So when he advocates quick-snap 
elections, he wants more companies to unionize. And in your 
filter for the NLRB, I just want to make sure that, while he 
has the right to advocate that position, that the position of 
the Board would not necessarily be to tilt things in the 
direction of unionizing.
    Ms. Liebman. Congressman, first, let me say that Mark 
Pearce--my colleague, Mark Pearce, formerly represented unions, 
but I believe he understands his responsibility as a Board 
member to fairly enforce this Act. Let me say that----
    Mr. Kingston. We will work with him on that.
    Ms. Liebman. The second thing is that each Board member has 
a vote. The Board presently has four members, and anything that 
we do will require at least a majority vote.
    And, thirdly, let me say that I don't think what any of us 
are trying to do is to increase union membership. What we are 
trying to do is fairly enforce the provisions of this Act, 
which do give workers the right to choose unionization if they 
want or to refrain from choosing unionization. That is all we 
are looking for, are fair procedures.
    Mr. Kingston. Would it be safe to say that the NLRB would 
not be following the National Mediation Board on their recent 
decision to say the majority of workers present would be able 
to determine if a company unionizes or not?
    Ms. Liebman. Mr. Chairman, I will let my colleague answer 
that one.
    Mr. Kingston. And you would admit that that is certainly 
not--that is an advocacy position of the National Mediation 
Board?
    Ms. Liebman. Congressman, what the National Mediation Board 
switched to is what the NLRB has done for its entire history. 
That is the way our votes are conducted.
    Mr. Kingston. So you could be unionized with the members 
present?
    Mr. Solomon. Yes.
    Mr. Kingston. You can do that?
    Mr. Solomon. The majority of those present voting.
    Mr. Kingston. So the same procedures to de-unionize would 
be the same procedures to unionize?
    Mr. Solomon. Yes.
    Mr. Kingston. Because I think there has been some concern 
about that.
    Ms. Liebman. Our procedures and the way we conduct our 
elections are the same--to authorize or decertify.
    Mr. Kingston. Thank you. Coming in under 5 minutes. Very 
good.
    Mr. Rehberg. Well trained.
    We are going to start round two, and I want to thank the 
committee for watching the time and allowing us an opportunity 
to have as many rounds as we possibly can.
    My question is, can the Board ever reject an election and 
call for a second ballot?
    Ms. Liebman. Yes, and it does routinely do that pursuant to 
objections filed by one party or the other that some misconduct 
has gone on or the Board has failed to conduct a fair election. 
Objections hearings would be held and sometimes, occasionally, 
that results in a new election.
    Mr. Rehberg. I want to get back to something that Mrs. 
Lummis was talking about with the unit determination and that 
is more of an appropriations question, and that is, if--and I 
don't expect an answer as to how you are going to rule and 
all--but what is that going to do for your annual budget or 
your FTE level if the determination is made to break up into 
additional categories or units, classifications? Have you 
addressed that issue? Is there an analysis out there to make a 
determination the effect it will have? Because, obviously, it 
is going to be a lot more controversial in the future. There 
are going to be probably clearly a lot more cases. So the 
question becomes, what kind of consideration has been made 
within your Board for FTE and your budget purposes?
    Ms. Liebman. Thank you, Mr. Chairman.
    You are going back to the Specialty Health Care case. So 
far, the Board has not made any decision. All we have done is 
asked for briefing on a range of questions. That briefing time 
is not even concluded yet. I think we have extended it at the 
request of some Members of Congress and the Senate until----
    Mr. Rehberg. Can you give me an estimate of when a decision 
will be made, just for purposes of addressing it in the 
Appropriations Committee? We are going to deal with the 
problem.
    Ms. Liebman. Yes. As I said, all we have done so far is ask 
questions. No determination has been made about what our 
decision is going to be. It is hard for me to predict what the 
timing would be. I would obviously like to decide all cases 
pending before us sooner rather than later, but I have learned 
wisely over the years never to make too many predictions about 
when a case is going to issue. That takes on a life of its own.
    Let me say, though, about that particular case--I don't 
want to go into the merits of it because it is a pending case. 
But it concerns the question, as the congresswoman said, about 
whether certified nursing assistants are entitled to have a 
bargaining unit on their own. That we may have asked for 
questions that go beyond that classification is really just to 
consider that issue in context.
    Mr. Rehberg. Okay. Would you provide the committee with the 
data that shows that it is a problem in the first place? You 
know, there has to be a reason that the Board is even 
considering the issue, and so we would like to know, you know, 
what went into the decision-making process, within your own 
mind, that the unit size is a problem that needs to be 
addressed by NLRB.
    Ms. Liebman. Again, this is a matter currently under 
deliberations.
    Mr. Rehberg. No, I am not arguing about this particular 
case. I am arguing about the necessity--what drove you to make 
a determination that unit size is a problem? There has to be--
you know, we don't pass a law unless there is a reason to pass 
a law. You are not considering this unless you consider a unit 
size to be an issue. So I would like you to provide to the 
committee either the study, the analysis, or the data that 
drove you to this decision.
    Mr. Solomon. Mr. Chairman, if I may, just to clarify, I 
asked for an analysis of what is our present experience on unit 
size; and I will be happy--I don't have it with me, and I don't 
actually remember the number. But the number presently, the 
number is quite small for our average unit size. We don't pick 
the units. People petition us. And, you know, the Act allows us 
to conduct an election in any appropriate unit, an appropriate 
unit, and the average unit size presently is, I am pretty sure, 
under 30.
    Mr. Rehberg. I just recognize this as having a major impact 
on your budget, the potential for a major impact both FTE and 
annual budget, and so we need to have some proof that there was 
a reason or there is a reason for a changing of the unit size 
determination.
    Mr. Solomon. I guess what I am trying to say, and maybe I 
didn't say it articulately. I am not sure--I mean, the Board 
will do what the Board will do, and the General Counsel will 
react to it, but I do not believe that even if the Board 
changed--whatever they decide in special health care, I do not 
believe will actually impact either our FTE in any adverse way.
    Mr. Rehberg. Okay.
    Ms. Liebman. If I could just add, the number I think our 
Acting General Counsel is struggling to come up with is our 
median bargaining unit size today--median, that means, you 
know, in the middle--is 25. So that means more than half will 
go over that size and more than half are under that size. The 
minimum size would be two people, because we wouldn't conduct 
an election if there were fewer than two.
    Mr. Rehberg. Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman.
    Just a point of clarification, you were petitioned to look 
at that, the size. You have a petition from a nurse's 
assistant--you don't decide to say, okay, I think that you 
ought to be doing this. It is like, you know, asking a judge 
what was it that made him take the case. Isn't that the----
    Mr. Rehberg. If the gentlewoman would yield, though, the 
General Counsel----
    Ms. DeLauro. Only if I can have the extra time.
    Mr. Rehberg. Fair enough. Shut it off--not shut her off. 
Shut it off.
    The General Counsel just said that he asked, which is a 
little different than the initial petition. He asked for 
initial----
    Ms. DeLauro. I think----
    Mr. Solomon. No, I just asked for an analysis of what our 
average unit size was right now.
    Ms. DeLauro. Right, but I am just saying, in terms of 
looking at that effort, it would have to come from a petition.
    Mr. Solomon. Yes.
    Ms. DeLauro. Another point is, this has to do with the 
posting of the notice of employees' rights under the law. As I 
understand it--correct me if I am wrong--it is just that you 
can exercise your right or you can refrain from doing that. You 
don't talk about the benefits of joining a union or what it 
takes away. I mean, there isn't a value. It is just, in 
essence, you have got the right to move forward to do it or to 
refrain from doing it, as you pointed out. You don't attach the 
benefits or the consequences, is that correct, in your 
notifications?
    Ms. Liebman. It is fully correct. It is purely 
informational. It is not advocacy.
    Ms. DeLauro. I think that is an important point to be made. 
Because it looked as if there was some view that this was 
advocacy rather than information.
    Ms. Liebman. Absolutely not.
    Ms. DeLauro. So thank you for the clarification.
    Mr. Solomon, it has been asked here already about four 
States that passed constitutional amendments which restrict 
freedom of employers and employees to enter into voluntary 
recognition agreements as a means to establish a union, even 
though it has been allowed under Federal law for 75 years. I 
want to enter into the record the letter from Arthur Rosenfeld, 
the Bush administration's NLRB General Counsel, where he 
testified that these constitutional amendments were on their 
face preempted under NLRA law; and Mr. Chairman, can I enter 
this?
    Mr. Rehberg. You may, without objection.
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    Ms. DeLauro. And I might add with regard to that, Mr. 
Rosenfeld's view here is one that worked against the unions in 
North Dakota at the time; is that correct?
    Mr. Solomon. That is correct, Congresswoman.
    Ms. DeLauro. So Federal preemption of State law is 
something which has strong historical precedent, regardless of 
which party is in power.
    Mr. Solomon. That is correct.
    Ms. DeLauro. Can you describe recent litigation that has 
involved preemption of State labor laws? Have courts generally 
sustained the NLRB's views in litigation--without talking about 
pending matters?
    Mr. Solomon. Well, the most recent was the Supreme Court 
case Chamber of Commerce v. Brown, which was in 2008; and we 
intervened on the side of the Chamber of Commerce. It was pro-
union State law at issue there, and we said that it was, in 
fact, preempted, and the Supreme Court agreed.
    Mr. DeLauro. The Supreme Court upheld your----
    Mr. Solomon. Yes.
    Ms. DeLauro. So, again, precedent. There is plenty of 
precedent, regardless of----
    Mr. Solomon. Yes.
    Ms. DeLauro [continuing]. The politics of whose party is in 
charge.
    Mr. Solomon. That is correct. Many of my predecessors have 
sent the same letters that I sent.
    Ms. DeLauro. Which also, by the way--I will get to that 
later.
    Let me ask, Mr. Solomon. Some have taken issue with your 
efforts to make use of so-called 10(j) injunctions to assist 
people who have been fired or penalized for union activity. 
First, am I correct that any such injunction requires approval 
from a Federal judge?
    Mr. Solomon. Yes.
    Ms. DeLauro. Your role then is to ask the court to act, and 
it is the court that makes the decision?
    Mr. Solomon. That is correct.
    Ms. DeLauro. Second, can you tell us the circumstances in 
which your office is likely to pursue a 10(j) injunction and 
why is its remedy important to protecting democracy in the 
workplace?
    And let me just add one piece to that. What has been your 
success rate as Acting General Counsel with these injunctions? 
Have the courts usually agreed with you and your staff and 
issued the requested injunction? So why is the remedy 
important, what are the circumstances, and how have the courts 
acted?
    Mr. Solomon. The 10(j) has been in the statute since 1947. 
It has been used by many, many of my previous general counsels. 
My predecessor told the regional offices to pay particular 
attention to, first, contract negotiations and where there were 
unfair labor practices to go in and seek a 10(j) injunction.
    10(j) injunctive relief is very important, because it puts 
the status quo back into place while the unfair labor practice 
is being litigated. In my--am I over?
    Mr. Rehberg. No, go ahead.
    Mr. Solomon. Just to give you some statistics for the win 
rate when you got to that, since I have been General Counsel, 
there have been 32 10(j)s that the Board has authorized. I can 
only recommend them to the Board. The Board has the final 
decision. Of those, we have won five in district court, 12 have 
settled, and 15 are pending.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. You know, I have to relate, as an animal 
science and biology major, when I went to law school, I took 
labor law. And my professor said, well, I am delighted you want 
to take this class, but you are a rancher. When are you ever 
going to use that? And now, after this, I can call him and say, 
I used it. I used it. And it was fascinating. He was a great 
teacher, and it was a fascinating class, but finally, finally, 
a use for all that.
    Question about--back to the specialty health care case. 
Here is the question that people have been asking me. The 
concern out there is that the specific question asked by the 
petitioners related to nursing assistants, and yet it appears 
that a broader application of the case may apply the concept of 
micro-unions and micro-bargaining to all occupations and 
industries. So my question is, are you considering expanding 
the standard beyond the non-acute health care facility workers 
that are involved in the petition, the subject matter of the 
case?
    Ms. Liebman. Congresswoman, I understand your concern, and 
I understand that this issue has received a fair amount of 
press. I have to say that one thing that is perplexing to me is 
that merely asking for amicus briefing on a set of questions 
has created so much controversy and concern. Because, at this 
point, all we are trying to do is get information and 
understand the issue in the broader context.
    The case--and, again, I am reluctant to say too much 
because it is a pending case. The Board has not deliberated. In 
fact, the briefing period is not yet over. The case--you are 
absolutely correct--concerns the question of certified nursing 
assistants. This was a case where the union sought a unit of 
certified nursing assistants. The regional director found that 
that unit was appropriate, if I am not mistaken--I think I have 
it right. The nursing home, the employer, sought review with us 
on that issue, the appropriateness of that issue, claiming that 
the bargaining unit that the regional director found to be 
appropriate was too narrow under existing law.
    Mrs. Lummis. So do you have a choice--I am going to try and 
ask you questions without getting to the heart of the specific 
case. Do you have a choice about whether to confine your 
decision to the specific facts in the case or apply it more 
broadly across classifications in businesses?
    Ms. Liebman. I am not sure that I would characterize it as 
a choice that way. In the course of an adjudication, we will 
decide the case before us. As is often the case in 
adjudication, your decision may have an impact, establish 
essentially a substantive rule of law that will then be applied 
in subsequent cases.
    Mrs. Lummis. Okay, well let me ask it this way then. Are 
you willing to assure this committee that you will not, through 
adjudication, supersede or render superfluous any portion of 
the National Labor Relations Act, particularly section 9(c)(a), 
relating to the determination of appropriate bargaining units.
    Ms. Liebman. I think I can assure you, certainly on behalf 
of this Board member--I wouldn't dare to speak for my 
colleagues--that my decision will be fully consistent with the 
letter and intent and precedent under the statute.
    Mrs. Lummis. Thanks. I appreciate that very much.
    Now there is still a lot of concern about using this case 
as back door rulemaking. Do you agree generally that rulemaking 
ensures transparency and the opportunity for more people to 
participate in offering opinions about broad changes in policy, 
as opposed to adjudication?
    Ms. Liebman. Well, certainly that is one of the arguments 
that has been made for why the Board should use more 
rulemaking. It does involve allow more public participation and 
transparency, yes.
    The Board has traditionally not done rulemaking. As I 
mentioned, the only real occasion where the Board has embarked 
on substantive rulemaking was back in the late 1980s when it 
did the rulemaking on appropriate bargaining units in acute 
health care facilities. Once it adopted that rule, it then 
decided the case on adjudication called Park Manor, which dealt 
with the standard to be applied in non-acute care; and it is 
that case which is really at issue here.
    When the Board decided that case--I forget what year it 
was--1991, approximately--it said that this is an industry 
which is in flux, clearly changing, and what we should do is 
monitor the experience under this decision, under the Park 
Manor decision; and I think that is exactly what our request 
for amicus briefing in Specialty Health Care is following up 
on, a specific invitation to look at the experience under the 
Park Manor doctrine in an evolving industry.
    Mrs. Lummis. Thank you very much.
    Mr. Rehberg. Ms. Roybal-Allard.
    Ms. Roybal-Allard. Thank you, Mr. Chairman.
    I just have one final question, Chairwoman Liebman. At a 
time of economic uncertainty and persistent high unemployment, 
it is more important than ever that the NLRB is provided with 
adequate resources to do their job effectively. Yet H.R. 1 
would cut funding for the NLRB by $50,000,000, and we have 
already heard that this would require all of the NLRB's 
employees to be furloughed for 55 workdays, or nearly 3 months 
between now and the end of September. What impact would these 
furloughs have on the NLRB's mission to reduce interruptions in 
commerce caused by conflicts between employers and employees 
and what impact would it have on our recovering economy?
    Ms. Liebman. Thank you, Congresswoman.
    First of all, thank you for your support of our adequate 
funding. We mentioned this a little bit earlier. If we were 
forced to furlough all of our employees essentially for half 
time for the remainder of the year, by definition all of our 
operations would have to be curtailed.
    We do two things. We conduct elections in workplaces. So 
our ability to do that in a prompt, efficient way would be 
slowed down. We also adjudicate unfair labor practices. We 
investigate the charges that are filed with us. We settle the 
vast majority of them. We have go to trial in some; and all of 
that, of course, would be slowed down if everyone was working 
half time.
    That would mean that not only would workplace disputes 
fester longer, but, for example, employers might have to have 
illegal strikes or illegal picketing go on at their workplaces 
for longer periods of time. Workers might be illegally locked 
out. So our ability to carry out our mission, to do the two 
things that Congress has instructed us to do, would I think by 
definition be curtailed.
    Of our funds, 80 percent goes to paying for our workforce 
of approximately 1,670 employees. We recognize certainly the 
economic times, but we think that our ability--we have no 
programs to cut, other than to furlough our employees to meet 
such a drastic budget cut; and in a difficult economy we think 
that our reducing the efficiency of our resolving disputes 
could contribute to destabilize relations and make things worse 
in the workplace.
    Mr. Solomon. And if I may just add a few specifics.
    We have estimated that our backlog would grow 
exponentially. Every decision point in a case would be delayed 
by about 3 months. And, as I mentioned, our overarching goals 
for the agency is to resolve our representation cases in 120 
days, resolve unfair labor practice cases--representation cases 
in 100 days, unfair labor practice cases in 120 days, and we 
have done a remarkable job of that, but any cut of this size 
would definitely impact significantly on any of those.
    Mr. Rehberg. Mr. Kingston.
    Mr. Kingston. Thank you.
    Let me ask you, in terms of the case about Facebook and 
employees saying disparaging things about their employers on 
Facebook, what is the NLRB's position on that? I think you have 
a case on it, right?
    Mr. Solomon. I issued complaint. The complaint settled, but 
our position was that the employee engaged in a conversation on 
her Facebook page with other employees about her supervisor and 
that that is covered under the Act, protected concerted 
activity; and we issued a complaint that her discharge for that 
conversation and that protected activity was unlawful under the 
Act.
    Mr. Kingston. Do you see a trend there or something that we 
should examine in terms of where the balance is on free speech 
and where the line should be?
    Mr. Solomon. Well, certainly.
    Mr. Kingston. Is that something you can kind of see from 
both sides--you know, a small amount okay?
    Mr. Solomon. Certainly social media is going to increase 
exponentially, even in ways that you and I can't envision 
probably.
    Mr. Kingston. Yes.
    Mr. Solomon. We have a case before us that involves 
Twitter. We have the other Facebook cases. I think there is 
consternation among the employer community of writing policies 
that cover social media, what is allowed and what is not 
allowed. You know, we can, again, only deal with cases that 
come to us; and we will decide--I will, my staff will decide 
whether we should, you know, issue complaints.
    Mr. Kingston. Was that the case--did they own their own 
computer when they were doing that?
    Mr. Solomon. Yes.
    Mr. Kingston. It would be different if the employer owned 
the computer, I suppose.
    Mr. Solomon. It could very well make a difference--again, 
whether the employer's policy is tailored to various ways. 
Because, I mean, people can at work talk about working 
conditions and engage in protected concerted activity.
    Mr. Kingston. I want to just share something with you for 
the good of the order here.
    I was in Mexico about 2 weeks ago, and we were in Mexico 
City talking to them about a myriad of subjects but including 
the immigration to America for jobs. And you may know 
remittance to Mexico from Mexicans working in America is 21 to 
24 billion dollar a year, a huge amount of money.
    And I was asking one of the--why aren't there more jobs 
down here? And he said, well, I have been with my current job 3 
months. If I quit today, I quit, I get 5 months' salary. If my 
employer fires me and I win the dispute over it, he will have 
to pay me 5 years' salary. He says, as a result of that, that 
is why there aren't any jobs, because we have made it so hard 
to fire people in Mexico.
    And, you know, that is just one of those things that--just 
throwing that out. I don't necessarily want you to comment on 
it, but I have 5 minutes.
    But what I do want you to comment on in terms of coming 
from an open-shop State and believing in the workers' right to 
choose, do you think that there is an inherent conflict between 
public employees--and I know you don't regulate public 
employees--but public employees' collective bargaining, so to 
speak, and donating to people who set their salary? It appears 
to me that there is a conflict there, which is one of the 
things that these open or closed shops States are going through 
right now; and I just--I know it is not in your jurisdiction 
but just your philosophical thoughts.
    Ms. Liebman. Well, because it is not in our jurisdiction 
and because we have enough difficult issues to deal with under 
our statute, I would be reluctant to delve into that.
    Mr. Kingston. I can see not only are you a lawyer but you 
are a good one.
    Ms. Liebman. I do want to go back to your Facebook inquiry 
for just a moment.
    Last week, I was in Minneapolis addressing a group of 
management lawyers. It was a reception held at a management law 
firm, and they invited some of their community. And one of the 
lawyers said to me, you know, we were really sorry when that 
Facebook case settled, because we were really looking to see 
what the NLRB policy was going to be. Because we need to know, 
as we consider drafting social media policies, whether it is 
consistent with the Title VII of the equal employment laws and 
the NLRA.
    It reminded me of a conversation I had had about 10 years 
ago with a very prominent management attorney. And at that time 
he said the most important thing from the business perspective 
is for the NLRB to decide what the rules are with respect to 
use of e-mail in the workplace. So that is what has happened. 
We have gone from e-mail now to Facebook.
    So, you know, it is not just workers and unions that were 
looking to us to set the rules of the games but employers, 
also. They want to know how to structure workplace policies. So 
it is--you know, even if they don't have a case before us, they 
want to see what we do----
    Mr. Kingston. It is an interesting area.
    Mr. Rehberg. I was going to turn it over to you, Ms. 
DeLauro, but I am next.
    I appreciate your comments about advocacy versus 
information, but I am also aware of a Google ad, if I could 
quote from it: Labor organization info. Find info on how to 
start a union. Get the process and more on our site 
www.nlrb.gov.
    If I were to click on to that ad, what would I get?
    Ms. Liebman. Well, Mr. Chairman, I don't know, actually. I 
have never seen the ad. But, to my surprise, I learned--I think 
it was on March 4th--that there were some Google ads that when 
you clicked on certain words, I guess on Google, that these ads 
would come up. It was something I knew nothing about.
    Within a few hours, we pulled the ads down. I asked our 
Inspector General to look into this. He has done that. I am 
happy to make his report available to you.
    We also, subsequent to that, got an oversight request from 
the House Education and Workforce Committee on the subject. We 
have turned over the report to them.
    In a nutshell, what our Inspector General found was that in 
2007, as the then Chairman Battista was looking to improve the 
agency's technology and Web presence and all, that there were 
some discussion at the staff level about how to increase 
traffic to our Web site; and one of our IT specialists 
apparently, we have learned, applied for a Google grant and 
drafted the text of a couple Google ads. And we didn't pay for 
them. He got this Google grant, I guess.
    Mr. Rehberg. And, again, I will go back to the advocacy 
versus information. One of the things I am continually--and, 
Mr. Kingston, I often say that I have over 6,000 friends on 
Facebook and turns out they are not all friends. But you can 
call themselves fans and friends, but they are not necessarily.
    Mr. Kingston. You have got 50 to 60 friends.
    Mr. Rehberg. I do. I can name them.
    But, again, and you both being attorneys--and I married 
mine. So I am pretty smart, too. Words do matter. When you talk 
about advocacy versus information, again, on the posting of the 
new six million business fliers, if there isn't a Beck's rights 
provision within that, then it is an advocacy piece, any way 
you look at it. Because the Google ad should have said, if you 
are interested in union information or nonunion information, 
then it probably would have been okay. Because all you are 
doing is to try to increase business, and I am okay with that. 
But if you ultimately come out with a ruling or a decision 
based upon all the information you are receiving to post a 
notice that only talks about one side, you are an advocate, any 
way you want to look at it.
    Ms. Liebman. Well, obviously, we haven't made a final 
decision based on our review of all this----
    Mr. Rehberg. No, but our reaction will be interesting if it 
comes out with an interpretation that one side needs to be 
notified and the other side is left out of that notification. I 
just want to say that we are watching.
    Ms. Liebman. We understand. We understand.
    Mr. Solomon. Mr. Chairman, may I just say that my 
understanding was--I also never went to the Google ads--but if 
you clicked on the Google ad, all you would have gotten was the 
NLRB Web page. So it is not like----
    Mr. Rehberg. Yeah, but you are driving a certain kind of 
person to a site, as opposed to an information either/or, A or 
B.
    Mr. Solomon. But the Web site would have told you, you 
know, where our regional offices are, what our procedures are.
    Mr. Rehberg. Well, you are a good lawyer but not a very 
good advertiser then. Because advertisements are to try and 
drive a certain customer or clientele into a business; and if 
you want to run it like a business, you are bringing a certain 
kind of clientele in by a one-sided click ad.
    Mr. Solomon. I understand what you are saying. But just the 
intent behind the ad, as I understand it from what the 
Inspector General found, was to increase hits on our Web page. 
And so it was just to bring traffic to our Web page.
    Mr. Rehberg. Would you mind then for a period of 2 days 
putting up a little ad that suggests, if you want to reject the 
union within your workplace, please click this ad? And then, 
you know, it would be the same.
    Mr. Solomon. I would also point that the ad that you read 
only ran, from the Inspector General's report, point 7 percent 
of the time. The one----
    Mr. Rehberg. I am just asking for equal time.
    Mr. Solomon [continuing]. Running 99.3 percent of the time 
was a much more even-sided----
    Mr. Rehberg. I am just suggesting, if you don't think it 
was an advocacy ad, why don't we--whatever percent--run the 
same ad?
    Ms. Liebman. We removed both ads as soon as we learned 
about them, and we didn't think they were appropriate to 
continue, anymore than what you are proposing would be 
appropriate. So we stopped them as soon as I learned about it. 
I knew nothing about it before that.
    Mr. Rehberg. Ms. DeLauro.
    Ms. DeLauro. I think that is the point. They are not there 
anymore. Did you know about it? Someone did it. You saw it. IG 
report. Bang. Done. Finished. Over. All right.
    So no advocacy involved, unlike what happened at Yale 
University where they put together a document to distribute to 
the employees when there was an organizing drive and a manual 
put together of how, in fact, you challenge the fact, talk 
about what all the bad consequences there are in terms of 
joining a union. And, quite frankly, what has really upset me 
was that basically implied that the people who are trying to 
put the union together are Mafia based. Actually, there was a 
ruling on that against the University in that case. But that is 
advocacy and not right. It shouldn't happen in any question.
    Anyway, I think the Facebook thing is very interesting, 
because 51 percent of Americans are on Facebook today. That was 
about 8 percent in 2008. It is a new world. Clearly, it is a 
new world for me in that regard.
    Mr. Kingston. It was better when it was just for kids.
    Ms. DeLauro. Anyway, a couple things. I don't know about 
the effect in terms of your transparency and your ability to 
communicate. This has to do with if we see the $50,000,000 cut. 
You talked about this weekly summary of cases making what you 
do more transparent to the public. How would that initiative be 
impacted by the proposed cuts?
    Ms. Liebman. Well, our ability to do all of our jobs would 
obviously be slowed up. We wouldn't be able to do it as 
quickly, I would assume.
    Ms. DeLauro. So in terms of transparency or what the cases 
are about, what the rationale is, both sides, all of the 
balance of what this effort is about would be transparent to 
the public. In the absence of the resources, that kind of thing 
goes away.
    Ms. Liebman. That is correct.
    Ms. DeLauro. Amicus brief, if I can, Chairman Liebman. Some 
people have tried to suggest that the current Board is pursuing 
an activist agenda, and the evidence they point to sometime is 
the invitations that have been issued for amicus briefs in the 
recent cases. Is requesting briefs from others not directly 
involved in the proceedings indeed a sign of activism or are 
there other reasons you would want to solicit broader views on 
a few of the cases that are before you?
    Ms. Liebman. Congresswoman, I have been quite perplexed by 
the criticism leveled at our seeking amicus briefing. To me, 
amicus briefing is a good practice. It is open. It is 
transparent. It is engaging. It invites participation by a 
broader segment of the labor management community than just the 
immediate parties to the dispute. It is open in the sense that 
it tells people what issues we are considering and thinking 
about; and it invites comments of any nature, whether it is 
legal argument, empirical evidence.
    To me, it is a good process. It doesn't say anything about 
the ultimate outcome of a case. Amicus briefing is all about 
being informed, being open, inviting participation. To me, it 
is a form of good government.
    Ms. DeLauro. I might add that, in terms of third party 
briefs, Cynthia Estlund, who is the Catherine Rein Professor of 
Law at NYU--this is on the rulemaking issue, just the point you 
made before--talks about its advantage. It allows for more 
thorough consideration of a wider range of views on policy 
issues with implications that extend beyond the parties to a 
particular case, facilitates more efficient adjudication of 
cases raising recurring issues, tends to promote policy 
stability because rules tend to last longer than precedents 
adopted through adjudication.
    So these are about the--rulemaking in amicus briefs in 
terms of soliciting a broader range of ideas, et cetera.
    Let me just ask--I think I have a second here, in which 
case I don't know if I can----
    Mr. Rehberg. Go ahead.
    Ms. DeLauro. We have got some time. Thank you, Mr. 
Chairman.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Mr. Chairman, no further questions, but I 
might just comment to my subcommittee chairman over in the AG 
Committee that when you have got lawyers in front of you and 
lawyers to the left of you and lawyer spouses to the right of 
you, it is a little bit like that Jimmy Buffet song ``Fins''. 
You know, fins to the left, fins to the right, and you are the 
only bait in town.
    Thanks, Mr. Chairman.
    Mr. Rehberg. Mr. Kingston.
    Ms. DeLauro. No lawyer here or spouse.
    Mr. Kingston. Mr. Chairman, I have some questions I want to 
submit to the record regarding the St. George warehouse case 
and the Groversnor Resort case, which I understand the counsel 
has asked for stiffer penalties for unfair labor practices. And 
if you want to say anything about it, I have a series of 
questions I don't think I can cover in 5 minutes, but I wanted 
to----
    Mr. Rehberg. And, as always, we will keep the record open 
for the purposes of submitting questions for the record and ask 
that you in a timely fashion respond.
    Ms. Liebman. Be happy to.
    Mr. Kingston. Another question I have, how does the Board 
select which cases appear before you? Because I know that there 
are more cases than you can deal with. How do you decide?
    Ms. Liebman. Well, I am not sure I understand the question. 
We do not have a certiorari procedure except for our pre-
election representation case matters where a party would seek 
review and we grant review only if we think there is a serious 
issue presented. Otherwise, we have to decide every case that 
is presented to us. If a party files exceptions to our 
decision, whether it is the general counsel responding, an 
employer or union, they have a right to file those exceptions, 
and we have an obligation----
    Mr. Kingston. So you have to do every one then.
    Ms. Liebman. We have to do every one. We can pick the 
order, but we have to decide every one.
    Mr. Kingston. Okay. And then let me just get back on this 
Google case. How much money was spent by that employee to get 
the ad? You say it was a Google grant?
    Ms. Liebman. No money. It was a Google grant.
    He misunderstood. He applied for this grant. Apparently, 
you have to represent whether you are a 501(c) organization. He 
told the Inspector General that he thought that the government 
doesn't make a profit so it comes within that. So he made a 
mistake.
    Mr. Kingston. Who was the employee and was he fired?
    Ms. Liebman. He was not fired. He is a junior-level IT 
specialist, and he was--we use the word--the parlance--
``counseled''. He was----
    Mr. Kingston. But he was acting on his own?
    Ms. Liebman. He was acting on his own.
    Mr. Kingston. Was his supervisor fired then if he was kind 
of an innocent junior----
    Ms. Liebman. I believe that----
    Mr. Solomon. We have counseled both the employee and the 
supervisor, and we have also put in place a system of checks 
and balances that it could never happen again, that no employee 
outside of the contracting office, the acquisitions office has 
authority to sign anything on behalf of the National Labor 
Relations Board; and we will make sure that this never happens 
again.
    Mr. Kingston. It seems, you know, we all have sort of a 
general policy that the only ones who can talk to the press, 
for example, would be the Member or the press person, and 
certainly the military has those rules. And it would appear 
that it would take a high degree of audacity or lack of 
supervision for somebody just to go out on his own and put in 
an ad like that and there not to be some very serious 
repercussions.
    Mr. Solomon. As I said earlier, the intent was simply to 
get more traffic to our Web site, and----
    Mr. Kingston. Why would that employee--is that his job, to 
get traffic to your Web site? He is an IT guy. Why would he----
    Mr. Solomon. In hindsight, no. But he thought it was a good 
thing. He helped design the Web site, and he thought it was a 
good thing to do. I mean, the chairman and I----
    Mr. Kingston. He could do all this and no one knew it? He 
was just designing Web sites and going out----
    Mr. Solomon. It was a fluke. The supervisor thought that, 
even under the grant, that it only lasted 3 months. And so the 
supervisor never checked, and it just kept going. And the 
chairman and I knew nothing about it, and the moment we did, it 
stopped.
    Mr. Kingston. All right.
    Mr. Rehberg. We will start another round, and thank you 
all.
    Can you estimate for me how many times you have an election 
off site or remote by absentee ballot? And what I want to get 
at is the e-card check opportunity or potentiality and the 
rulemaking that is going along with allowing the opportunity 
for voting on the Internet. So I will give you a heads-up as to 
where I am heading with this, but I would like to know 
currently what percentage of votes occur off site or in remote 
locations.
    Mr. Solomon. I will have to get you that statistic, but it 
is a very small percentage of our elections that are handled 
presently by mail ballot. Our presumption is that they are by 
manual ballot and the manual balloting occurs on the employers 
premises only. The only times it doesn't is if the employer 
refuses to allow us on the premises, and then we arrange a 
remote site.
    Mr. Rehberg. One of the things that we hold near and dear 
to ourselves is we do not allow remote voting in Congress for 
one reason or another. We want people to be here. I would never 
come to Washington if I didn't have to. I would stay in 
Montana. And so you can understand the potential for abuse when 
you have off-site, remote voting, especially over the Internet.
    What kind of comments are you getting on the e-card rule?
    Ms. Liebman. We have not done a rulemaking on----
    Mr. Rehberg. But you are gathering information, so there is 
a difference between----
    Ms. Liebman. Some months ago, we put out a request for 
information through the acquisition or procurement process just 
to find out what firms are out there, what businesses are out 
there that provide electronic voting services for either on-
site or remote electronic voting. The National Mediation Board 
I believe was using this pretty consistently for their 
elections.
    We know that electronic voting is conducted or is permitted 
in several States. So it is an evolving technology, and we put 
out this request for information just to find out what firms 
are doing it, how they do it, what safeguards there are, and--
--
    Mr. Rehberg. Do you think it would be a necessity for a 
statutory change to allow the opportunity for e-voting or do 
you think you have the statutory authority to go through a 
rulemaking procedure and create a rule that, in effect, 
circumvents the will of Congress so far on the card check 
concept?
    Ms. Liebman. Well, let me just say that all we have done so 
far is seek the information through the acquisition procurement 
process.
    Mr. Rehberg. Right.
    Ms. Liebman. Should we ever decide that we wanted to 
propose electronic voting of some sort, we would certainly do 
it through a public rulemaking process with opportunity for 
notice and comment.
    Mr. Rehberg. So you think you have the statutory authority 
to create e-card check.
    Ms. Liebman. What the statute provides is that the Board 
shall certify a union, if it wins after a secret ballot 
election. And, of course, at the time the statute was written, 
no one had electronic voting in mind.
    So the question I think would be whether electronic voting 
would be within that statutory language. We got these comments 
from a variety of firms that do this. We got some comments--
really sort of unsolicited comments--on the merits of it. That 
wasn't what we were asking at the time. We had those comments.
    I can tell you that the Board has taken no further action 
on this issue. We have not engaged in further--
    Mr. Rehberg. Would there be a judicial review of a 
regulation if the rulemaking authority occurred?
    Ms. Liebman. Sure, there is judicial review of any 
rulemaking permitted, just as there is judicial review of our 
unfair labor practice decisions. A little different standard, 
but there is judicial review available.
    Mr. Rehberg. There is judicial review in all rulemaking 
within the NLRB? I was under the assumption or understanding 
that not necessarily.
    Ms. Liebman. Well, I guess my lawyer will correct me if I 
am wrong, but we have done this--as I said, we have done 
substantive rulemaking essentially once, and it was subject to 
challenge, as I mentioned, in 1991. It was unanimously upheld. 
We just haven't done it in between, but my understanding is 
that, under the Administrative Procedure Act, that judicial 
review is available if an agency does rulemaking. That has 
happened with a lot of other agencies.
    I stand corrected if I am wrong on that.
    Mr. Solomon. You are right.
    Mr. Rehberg. All right. Then I stand corrected. I am going 
to go back and look at my documentation and my data and see, 
and then I will correspond with you one way or the other. Thank 
you.
    Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman.
    Let me just ask a follow-up question, Ms. Liebman. Is the 
NLRB planning to effectuate the Employee Free Choice Act by 
rulemaking?
    Ms. Liebman. No, Congresswoman, we are not able to do that.
    Ms. DeLauro. Would those changes to labor law, in your 
view, require a statutory change?
    Ms. Liebman. The changes that were proposed in the Employee 
Free Choice Act, in my view, would require Congress to 
effectuate; and we certainly respect what we are able to do and 
what we are not able to do. We have no intent to usurp the role 
of Congress.
    Ms. DeLauro. I thank you. Because I want that to be part of 
the record. Thank you.
    Let me also mention to you, there is always a lot of 
discussion that we hear about the NLRB. It is partisan place, a 
polarized place, conflict between the Republican and Democratic 
Members, between the supporters of management and the 
supporters of labor. I wonder how much that view reflects 
reality.
    In your statement, Chairman Liebman, you mentioned the 2-
year period when there were only two Board members, yourself 
and a Republican Board member; and I believe you said that the 
two of you reached agreement on some 600 cases.
    Ms. Liebman. Correct.
    Ms. DeLauro. What lessons do you draw from that experience? 
Does it tell us that there really is pretty broad agreement 
about much of the fundamental day-to-day work of the Board?
    Ms. Liebman. Yes, thank you for your question.
    I completely agree with the point you just made. For the 
vast bulk of what this agency does on a day-to-day basis, there 
is broad agreement. No one disagrees with the basic principles 
of law which are stabilized and have been stabilized for 
decades. A very small percentage of the cases actually come to 
the Board itself for adjudication. The vast majority, as you 
heard, are settled before that. And of the cases that come to 
the Board for decision, well more than half of those decisions 
are unanimous. It is probably maybe 2 percent of those cases 
that create any noise, and they are generally cases of topical 
interests, novel issues, some ways new. So there are people who 
have strong interests in the outcome of those decisions.
    Just to answer the question a slightly different way, the 
Board is supposed to have five members at any one time--three 
members of the President's party, two of the opposition. The 
composition of the Board are terms of 5 years. They expire on a 
rotating basis. So at any one time there are going to be 
different views on the Board.
    I did spend 27 months alone with Member Schaumber; and we, 
to the surprise of many, were able to reach agreement nearly 
600 times. I think that tells you in part how stable the vast 
bulk of the doctrines and the precedent and the law are under 
this statute.
    Let me also mention that I have been on the Board now for 
13 and a half years. I am the third-longest-serving member of 
the Board in its history. I have served with 16 different 
individuals, both Democrats and Republicans. I think I have 
enjoyed good relations with all of them, both Democrat and 
Republicans. We sometimes have differences about how to 
approach the law, but that is just part of this law. That is 
part of the legal system. That is part of what goes into this 
rule of law under this very important statute.
    Ms. DeLauro. Isn't it also true that some would say that 
because there were two people, three people, et cetera, that 
the decisions are--you know, skewed. We can't really call into 
question the decisions, but there hasn't been over the years a 
full complement--can you just comment on that--a full 
complement of members. Would that there would have been, 
because, obviously, it is the way to go. But just give us a 
comment on that, if you will.
    Ms. Liebman. I don't remember this--we actually looked this 
up recently, but I think there has been a full complement of 
members--meaning all five--probably less than two-thirds of the 
time. In my 13-and-a-half years, I have served on every single 
configuration--five member, four member, three member, two 
member, and even 6 weeks by myself. So that is unfortunate, 
that the appointment process has become so difficult.
    Ms. DeLauro. Thank you very much.
    Thanks, Mr. Chairman.
    Mr. Rehberg. Mr. Kingston.
    Mr. Kingston. Thank you, Mr. Chairman.
    Madam Chair, one of the things, though, that is just the 
reality right now in our budget situation, and I think your 
testimony scanned both of them, and what you just said to Ms. 
DeLauro is right out of your testimony. I think it has been 
very good. You still have a 2-percent increase, which isn't 
much, and Lord knows if we, Republicans and Democrats alike, 
had been holding Federal spending to a----
    Now, how is my light red, Mr. Chairman? Who is keeping 
track over there?
    Mr. Rehberg. Final round.
    Mr. Kingston. I have a question. What I still don't 
understand, though, is I think, even if this committee 
advocated for you for the 2 percent, I think it is going to 
have a difficult time getting it passed in this budget 
environment. So my question would be--and I am not the chair, 
don't hold the majority of votes, but let's just say we came 
back to you and said, we have got to do a 5-percent cut. What 
would happen to you?
    Mr. Solomon. You mind if I take this?
    Mr. Kingston. Well, actually, it is your testimony, not Ms. 
Liebman's anyhow, so yeah.
    Mr. Solomon. In a nutshell, we would have to cut our FTEs. 
We presently are at 1671. As it has been said, 90 percent of 
our budget is fixed. It is compensation and rent and security, 
and so FTEs would have to be cut. We would have to cut 
training. We would have to cut investments in IT, which are 
critical to our future and----
    Mr. Kingston. But let me ask this. There is an assumption 
in this town that all employees are working their tails off. 
Let's say there is an assumption in this building, there is 
even a pretense that everybody is actually killing themselves.
    I actually know of somebody whose son worked for the 
Department of Labor, very bright college kid, got a summer job 
there, was paid $11 an hour and never given any work, and after 
2 weeks quit because he said, you know, it is wrong for me to 
go in every day and read a novel.
    I talked to people at the Pentagon; and you know if you 
stand in the parking lot at 3 o'clock in the day, you are 
taking your life in your hands.
    Lots of people within these departments will say, yes, 
there is a critical core in every agency and every 
administration that works their tails off 20 to 30 percent and 
then there is a whole bunch of folks who just really don't. 
They stretch, you know, a 2- to 3-hour workday into 8 hours and 
probably----
    Ms. DeLauro. I think probably the same is true of the 
Congress, Jack.
    Mr. Kingston. Certainly not in any office from Connecticut 
or Georgia. Maybe Montana. I don't know.
    But I mean, you know, really as managers and stewards of 
public dollars in an environment where of every dollar we spend 
40 cents is borrowed, we need to look at payroll, because that 
is where the money is.
    Mr. Solomon. I understand that, Congressman, and it is hard 
for me to come up with an answer other than trust me. But, you 
know, we are lean and mean. We have cut our FTE through the 
years to what we feel is absolutely essential for us to serve 
the public, to serve the taxpayers, to help the economy in 
resolving these workplace disputes; and, as has been said 
several times before, we have no programs to cut. All we can 
cut are people. And, you know, a 5-percent cut would mean 40, 
50 or even more cut in our FTE; and it is going to directly 
detrimentally affect how we do our business and how we serve 
the public.
    Mr. Kingston. I know it is difficult. In our own office, we 
have three less employees this year. Each one of those three 
employees was very productive, but as the Appropriations 
Committee took a 9-percent cut, then individual offices took 5 
percent. So if you were a Member of Congress on the 
Appropriations Committee you had a deeper cut than other 
offices. And I understand it, but then I think, you know what, 
this is what the environment is.
    Mr. Solomon. And, Congressman, as I said in my opening 
statement, we have put together a task force to really study 
whether we are going to an electronic case filing system, which 
means that employees will be able to access their files 
anywhere, anytime. So we will look at our footprint around the 
country and our business processes, and I think there will be 
economies of scale in that, but it still takes people to handle 
these cases.
    Mr. Kingston. Yeah. It is very tough, and I understand. So 
thanks.
    Mr. Rehberg. Which brings me to I guess a question about 
the regional offices. Are you looking, as part of your study, 
at the opportunity to consolidate the regional offices and use 
the new----
    Mr. Solomon. Yes, Mr. Chairman.
    Mr. Rehberg. I won't take my full 5 minutes. I will turn it 
over to Rosa in just a second here.
    Mr. Rehberg. I knew I had read it somewhere.
    I was reading a paper on specialty health care, and maybe 
you could respond to this. Because this is a representation 
case--which, obviously, I don't know what a representation case 
is--there will be no opportunity for direct judicial review and 
the Board could begin implementing the decision immediately in 
other cases. So that----
    Ms. Liebman. If I could just clarify that. What happens in 
the judicial review process is that the representation case 
decision--that is where we decide that we are going to hold an 
election in XYZ unit. That is not immediately appealable. If 
the union wins the election, the employer can then get judicial 
review by refusing to bargain. We then issue an unfair labor 
practice complaint charging the employer with a refusal to 
bargain, and then it goes to court.
    Mr. Rehberg. The question then becomes, do you then move 
beyond just that particular case waiting for judicial review or 
a lack thereof and you begin applying the same unit 
determination broadly?
    Ms. Liebman. Well, as with all of our decisions, once they 
are in place, we would follow it. If another similar fact 
pattern came up and if the same legal principle was at issue, 
yes. I mean, we tend to follow our decisions in like cases. But 
there is judicial review available through that mechanism.
    Mr. Rehberg. But my fear is again the budgetary aspect of 
representation case then being broadly interpreted among many 
other entities, creating additional units and then ultimately 
it costing us more in our annual budget that we look at in the 
FTEs.
    Ms. Liebman. I really don't foresee any major change in our 
budget needs as a result of the Specialty Health Care decision.
    Mr. Rehberg. Ms. DeLauro, you will be the last.
    No, you have gotten your chance.
    Ms. DeLauro. Sorry, Jack.
    Mr. Kingston. My first time on the committee.
    Ms. DeLauro. I would like to place into the record a letter 
from Fred Feinstein, who was the former General Counsel of the 
NLRB from 1994 through 1999, and his point that he is concerned 
about the $50 million in cuts. The principal effect of 
underfunding the agency would be to increase the time it takes 
to resolve issues, disputes before the agency, et cetera.
    So for the record, Mr. Chairman.
    Mr. Rehberg. Without objection.
    [The information follows:]

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    Ms. DeLauro. And then I would just ask our two witnesses 
here, in your statements both of you talked about the 
importance of the National Labor Relations Act, the work of the 
Board. Yet I wonder if some people have the idea that your work 
is no longer relevant. Could you help us to understand why the 
law and the work of your agency is still very much relevant--
how important it is and how much it matters to the lives of 
working people, which goes back to what it was about when it 
was established in 1935?
    Mr. Solomon. Thank you, Congresswoman.
    I would just give you a little sense of the 9 months that I 
have been Acting General Counsel. I had a case come before me 
in which we felt that the employee was fired for union activity 
and, in reading the facts of the case, the employee was not, in 
fact, paid minimum wage. In fact, he received no wages, except 
tips; and a benefit that he received--and I put benefit in 
quotes--was that he could live in the employer's bathroom. And 
this is 2011, and I feel that he needs our help.
    On the other end of the scale, we have the NFL owners who 
have filed a charge in our Manhattan office that, if we find 
merit to it, we would force the players association back to the 
bargaining table; and there are those that would love for us to 
do that in the hopes that we would save the football season.
    And, in the meantime, we have the things like Facebook and 
Twitter that are coming up.
    And so, in short, there is 7 percent of the workforce that 
is unionized, but there is 93 percent that is not unionized. 
The Act applies to them equally, to the ones that are 
unionized. And these people need us. On both sides.
    Ms. DeLauro. Ms. Liebman.
    Ms. Liebman. Thank you.
    I think Mr. Solomon stated it eloquently. But let me also 
add that it may be hard for us in this room to remember 1935, 
but for any student of history I don't think anyone could doubt 
the value that this statute has had in our society and in our 
legal system.
    What this law sets up is a rule of law, a system of 
governance for the resolution of conflict and disputes in the 
workplace. There will be conflicts and disputes between labor 
and business for as long as there is labor and business. We 
don't create the conflict. The conflicts come to us. We try to 
resolve them; and that is a very, very important social 
function, I think.
    For workers, it gives them a possibility of a voice in the 
workplace, if they want it. For those workers who choose to 
engage in collective bargaining with their employers, the 
institution has served this country well. It enables the 
parties to reach their own solutions without government 
intervention. I think this continues to be a very important 
institution in the law for our society and our economy.
    Ms. DeLauro. Many thanks for your service. Many thanks for 
the work of the agency in both protecting workers and 
employers. I think that you both demonstrated the 
evenhandedness with which this agency strives to and succeeds 
at achieving. So thank you very, very much.
    Mr. Kingston. If the gentlewoman will yield.
    Mr. Rehberg. Mr. Kingston, we would like to hear from you 
one more time.
    Mr. Kingston. I would just like to say to our friend, the 
chair, that you spent 27 months with a Republican. Rosa and I 
spent 19 years together, and she can tell you how good it 
really can get.
    Ms. DeLauro. I will tell you.
    Mr. Solomon. Can I do one thing, just to clarify? I made a 
misstatement to Congressman Kingston. At a 2 percent cut, we 
would have to cut our FTE by 40 or 50. But with a 5 percent 
cut, we would probably be in the 100 to 120 range.
    Mr. Rehberg. Meeting adjourned. Thank you.

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                                           Thursday, April 7, 2011.

               DEPARTMENT OF LABOR JOB TRAINING PROGRAMS

                               WITNESSES

ANDREW SHERRILL, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY, 
    U.S. GOVERNMENT ACCOUNTABILITY OFFICE
DOUGLAS J. BESHAROV, PROFESSOR, UNIVERSITY OF MARYLAND SCHOOL OF PUBLIC 
    POLICY, AND DIRECTOR, WELFARE REFORM ACADEMY AND CENTER FOR 
    INTERNATIONAL POLICY EXCHANGES
MASON BISHOP, PRINCIPAL, WorkED CONSULTING AND FORMER DEPUTY ASSISTANT 
    SECRETARY FOR EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF LABOR
RAY UHALDE, VICE PRESIDENT, WORKFORCE/EDUCATION POLICY, JOBS FOR THE 
    FUTURE, AND FORMER DEPUTY ASSISTANT SECRETARY, U.S. DEPARTMENT OF 
    LABOR
    Mr. Rehberg. Good morning, and welcome. Nice to have you 
all here this morning.
    And we will begin by, I believe, an opening statement by 
Ranking Member DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    I want to say a thank you to our four distinguished 
witnesses for taking the time to testify for us this morning.
    Mr. Chairman, as we sit here today, 13.7 million of our 
fellow Americans are unemployed. And at a time when jobs are 
harder to find than ever and our economy is changing so 
dramatically, we need efficient and effective job training 
services like those provided by the Workforce Investment Act in 
order to help citizens to get back on their feet.
    No investment is more critical than investment in our human 
capital, and job training and reemployment services are part of 
the core, essential role for Government--helping responsible 
people succeed from their own hard work.
    And yet, Mr. Chairman, the majority's budget for this year, 
H.R. 1, effectively terminates the Federal Government's role in 
workforce development. This is a vital role of Government that 
had the support of both parties under President Nixon and 
President Reagan.
    Let us be clear about what this means. Currently, the 
Federal Government covers the vast majority of the cost of the 
public investment in job training and placement programs. If we 
terminate our investment in this area, States will not be able 
to afford to make up the difference. They will have no recourse 
but to shut these programs down.
    Where will people go to get this vital job training and 
placement assistance? The majority does not seem to have an 
answer or even to be concerned about it. And so, under their 
plan, we are hearing that 3,000 One-Stop career centers will 
suspend enrollment in programs this summer and will likely 
close their doors later this year.
    Up to 30,000 disadvantaged students will lose access to 
work experience and earning opportunity through summer youth 
employment programs. The Job Corps will serve 10,000 fewer 
participants while also shuttering centers, and the Green Jobs 
Program will be eliminated. And at a time when long-term 
unemployment is staggering, millions of American workers would 
lose access to reemployment and job training services 
completely.
    In fact, the Workforce Investment Act supports job training 
programs all across the country with proven results. Over the 
past 2 years, WIA programs have seen a 233 percent increase in 
participation from 3.4 million workers served in 2008 to just 
over 8 million in 2010. And even in this tough economy, of over 
half the people seeking help, 4.3 million Americans nationwide, 
have found jobs with the help of these services.
    Businesses also rely on training programs to fill vacant 
positions with qualified and skilled workers. These cuts will 
hurt them, too.
    Some have suggested that our federally financed workforce 
programs, as currently constructed, are not achieving adequate 
results. I am interested in pursuing that discussion today 
because according to the vast quantities of research that I am 
aware of, the opposite is true.
    We will hear today about the need to move to a voucher 
program so that we can focus on training instead of core and 
intensive services. But I doubt that that is what the framers 
of this program had in mind.
    Still, that does not mean that there is not room for 
improvement. We can always do better, especially when the 
livelihood of millions of Americans is at stake.
    So, Mr. Chairman, I thank you for convening this hearing, 
and I am looking forward to today's testimony.
    Mr. Rehberg. Great. Just a brief warning. Unfortunately, 
normally we do hold pretty strictly to the time. I try and 
respect your time as well as ours and have us out of here by 
noon. But it looks like we are going to be voting somewhere 
between 11:15 a.m. and 11:30 a.m., and we will not be able to 
reconvene because then we begin the debate on the CR, and we 
are not allowed to have an Appropriations Committee hearing at 
the same time that anything is being debated on the floor 
having to do with the budget.
    So it is one of those technical issues. It is a rule. So we 
will do the best we can to hear your opening statements, and 
then I just implore the Members during their questioning if 
they don't feel compelled to fill the entire 5 minutes, that 
would be a good thing, and we will get more than one round in. 
Otherwise, chances are we will only get one round of 
questioning in.
    So why don't we begin? Mr. Sherrill.
    Mr. Sherrill. Mr. Chairman, Ranking Member DeLauro, and 
Members of the subcommittee, thank you for inviting me here 
today to discuss the findings from our recent work on 
fragmentation, overlap, and potential duplication in federally 
funded employment and training programs and our prior work on 
the Workforce Investment Act.
    As you know, we recently issued two key reports in this 
area. The first was mandated by Congress and outlined 
opportunities to reduce potential duplication across a wide 
range of Federal programs. The second focused more specifically 
on Federal employment and training programs and built on 
reports we have issued in this area since the 1990s.
    Today, I will discuss what we have found regarding 
fragmentation, overlap, and duplication of Federal employment 
and training programs, the role that WIA activities can play in 
addressing these conditions, and what additional information 
would assist Congress.
    For fiscal year 2009, we identified 47 federally funded 
employment and training programs administered across 9 Federal 
agencies. The programs reported spending approximately 
$18,000,000,000 on employment and training services that year. 
Seven programs accounted for about three-quarters of this 
spending, including the WIA Adult, Dislocated Worker, and Youth 
Programs.
    The target populations being served by the most programs 
were Native Americans, veterans, and youth. Forty-four of the 
47 programs overlap with at least one other program in that 
they provide at least one similar service to a similar 
population. However, differences may exist in eligibility, 
objectives, and service delivery.
    We did more in-depth analysis of three of the largest 
programs--Temporary Assistance for Needy Families, the 
Employment Service, and WIA Adult Programs. We found that these 
three programs maintain separate administrative structures to 
provide some of the same employment and training services, such 
as job search and job referral, to low-income individuals, 
although there are differences between the programs.
    However, data limitations make it difficult to determine 
the extent to which individuals may be receiving the same 
employment and training services from these programs. Federal 
agency officials acknowledge that greater administrative 
efficiencies could be achieved in these services but also said 
that other factors, such as the proximity of services to 
clients, could warrant having multiple entities provide the 
same services.
    Congress passed WIA partly in response to concerns about 
the fragmentation and inefficiencies in Federal employment and 
training programs. WIA established One-Stop centers and 
mandated that many Federal employment and training programs 
provide services through the centers in all local areas.
    In our 2007 study, we found that a typical One-Stop center 
in many States offered services for eight or nine required 
programs onsite. And one State offered services for 16 required 
programs onsite. While co-location does not guarantee 
efficiency improvements, it affords the potential for sharing 
resources, cross-training staff, and may lead to the 
consolidation of administrative systems, such as information 
technology.
    Consolidating administrative structures and co-locating 
services may increase efficiencies, but implementation could 
pose challenges. We found that Florida, Texas, and Utah have 
consolidated their workforce and welfare agencies, and 
officials said this reduced the cost and improved the quality 
of services, but they couldn't provide a dollar figure for the 
cost savings.
    WIA Adult and Employment Service Programs are generally co-
located in One-Stop centers, but TANF employment and training 
services are co-located to a lesser extent. We recently 
recommended that the Secretaries of HHS and Labor work together 
to develop and disseminate information on some of these 
initiatives at the State and local levels to shed light on the 
extent to which they could serve as models in other places.
    As part of that effort, we recommended that they examine 
the incentives for States and localities to undertake that kind 
of initiatives, and the agencies agreed.
    Nearly all employment and training programs track multiple 
outcome measures--most often entered employment, employment 
retention, and wage gain or change. However, little is known 
about the effectiveness of employment and training programs. We 
found that only 5 of the 47 had conducted any impact studies 
since 2004. Labor has been slow to comply with the requirement 
to conduct a multisite control group evaluation of the WIA-
funded programs, and they currently have it underway. But it 
expects that it won't be completed until 2015.
    Up to now, Labor has completed two nonexperimental, less 
comprehensive studies of the WIA Adult and Dislocated Worker 
Programs, which found that, on average, programs had positive 
impacts in the States examined.
    The recently enacted GPRA Modernization Act of 2010 
provides some opportunities for Congress to have additional 
oversight in this area because the act requires more 
crosscutting goals and programs and more congressional input.
    In conclusion, sustained attention and oversight by 
Congress will be critical in addressing these issues of 
fragmentation, overlap, and potential duplication. And our work 
highlights two areas where congressional oversight could 
facilitate progress--enhancing program evaluations and 
performance information and fostering State and local 
innovation.
    That concludes my statement. I would be happy to answer any 
questions.
    [The information follows:]

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    Mr. Rehberg. Great. Thank you.
    Mr. Besharov.
    Mr. Besharov. Mr. Chairman, Members of the committee, thank 
you very much for having me here.
    I am a professor at the University of Maryland. And so, my 
claim to expertise in this regard is that we held a conference 
on WIA about 2 years ago and published many of the papers being 
discussed now. I have published the papers by Carolyn Heinrich 
and Kevin Hollenbeck that are being studied by the committee, 
but also papers on the other side that have said we need to do 
a better job on the research. So that is true as well.
    In any event, I would like to shift this discussion just a 
little bit. Too often, the question asked is do we need WIA? Do 
we defund it? Do we reduce the funding?
    We are in the middle of the deepest downturn for employment 
that we have had since we began keeping records. More than 10 
percent of the American workforce is either unemployed, has 
given up looking, or is working part-time when they want to 
work full-time.
    And yet, there are 2.8 million jobs available today. 
Business is saying that the unemployed aren't qualified for 
those jobs. It is looking for skills other than the skills of 
the unemployed workers today to fill those jobs, or they are 
going abroad with those jobs.
    So I come to this problem by asking how do we fix our 
Nation's job training system, given this deep need? Spells of 
unemployment are now longer than they have been since we have 
been keeping records, since 1948, almost twice as long.
    We have millions of people who don't have the skills for 
the future. We are going to talk a little bit about whether 
WIA's results are sufficient or not, and we may get into that 
in detail with some of the questions. For now, I am just going 
to say that my reading of the research, including the papers 
that I have published, tells me that WIA doesn't do nearly 
enough.
    I am just going to read--because there is going to be, I 
think, a little bit of discussion about this--Carolyn 
Heinrich's actual assessment of her work and others. She says, 
``The Adult Program clearly satisfies the benefit-cost standard 
if the earnings impacts continue for 2 or 3 years.'' And this 
is what she said, ``Which seems plausible.'' Not for sure. 
Plausible.
    But she, like almost every researcher who has looked at 
this issue, thinks that the Dislocated Worker Program is not 
cost effective either for the Government or the trainees. In 
fact, Kevin Hollenbeck from the Upjohn Institute on Workforce 
Policy concludes that the average displaced worker who goes 
through the program loses 10 to 17 percent of his earnings over 
a period of time.
    So this doesn't mean defund the entire program. What this 
means is we have a giant problem ahead of us. Let me take this 
opportunity to review what I think are the important things for 
this committee to consider. Many of them are parallel to what 
Mr. Sherrill said. I know Ray Uhalde's work. I think it is 
parallel to some of the things he stands for as well.
    First of all, we really do have too many job training 
programs. This is the time to cut back the number, combine 
them. In the next years, we will add some back. And 10 years 
from now, we will come back and we will cut them back again. 
But there has to be a little bit of haircutting going on, some 
combining of these 47 programs.
    More importantly, I would say, as in Germany, as in the UK, 
we have to better connect our unemployment system with our job 
training program, something the Obama administration started to 
do and then didn't take it rest of the way. We have to realize 
that Pell grants and student loans are part of our national job 
training program, clarify what they do and how they work with 
WIA agencies.
    These are big issues, and they involve many more billions 
of dollars than WIA itself.
    We should require cost sharing from trainees to make the 
systems more accountable. I would also say that it is time to 
make the States help pay for this program. They should have 
some skin in this game. My experience is when someone helps pay 
for a program, it gets a little better.
    And finally, I want to say, as someone who tries to use the 
data that comes from the Department of Labor--Andy said it the 
fancy way--no one believes the data that comes from the 
Department of Labor. How else can I put it?
    There has been a decade and a half of reports from GAO that 
say please improve the data. And this has gone through a 
Republican administration, and a Democratic administration. If 
this committee does nothing but give added impetus to an 
improvement of the Department of Labor's recordkeeping and data 
collection, it would be making a major reform.
    Thank you very much.
    [The information follows:]

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    Mr. Rehberg. Thank you.
    Mr. Uhalde.
    Mr. Uhalde. Good morning, Chairman Rehberg, Ranking Member 
DeLauro, and Members of the subcommittee. Thank you for 
inviting me to testify.
    The Nation is at a crossroads, facing two urgent 
priorities. We have to restore fiscal discipline, reducing the 
Federal deficit and shrinking our long-term debt. But at the 
same time, we also must grow the economy in the face of intense 
international competition, creating jobs and expanding 
employment and economic opportunities for all Americans.
    Most people agree economic growth and broadly shared 
prosperity depend importantly on the education and skills of 
America's workforce. As Congress and the administration 
negotiate the full 2011 continuing resolution and then go on to 
fiscal year 2012, it is essential that the urgency of deficit 
reduction not override the critical investments in the 
education and skills of the U.S. workforce, especially at this 
fragile point in our recovery with 13.5 million people still 
unemployed.
    So we have to move forward on both fronts. H.R. 1 or 
similar cuts would eliminate all funding for the WIA Adult, 
Dislocated Worker, and Youth Programs for states and local 
communities, and several vital national programs in program 
year 2011, starting this July 1st, leaving about 8 million 
people who used WIA last year without services or a place to 
turn for help finding work.
    And those who think that the unexpended carryover funds 
would see the system through to next year are just misinformed. 
I urge the Members of the committee to avoid the cuts to 
programs such as WIA that contribute to our economic growth and 
job opportunities.
    And it is no secret that WIA is in need of reauthorization. 
It was originally authorized in 1998, signed in August when the 
unemployment rate stood at 4.5 percent. Not only do we face a 
much different economy, but practice in the field has also 
progressed significantly.
    Both the House and Senate authorizing committees, we hope, 
will emphasize proven practices and system innovations in 
proposals for reauthorization that are currently under 
development. To say that WIA should be reauthorized, though, is 
not the same as saying that WIA programs are not effective. On 
the contrary.
    My reading of the evidence is pretty clear that WIA's core 
and intensive services and the training for disadvantaged 
adults have been shown time and again to pay off in terms of 
higher employment rates and earnings. The evidence on training 
effectiveness for dislocated workers is mixed, but strong 
results have been shown in studies examining community college 
training for dislocated workers, particularly if training is 
provided for 1 year or more for technical occupations including 
healthcare.
    This focus on long-term, high-demand training is precisely 
what the workforce system used with the Recovery Act funds that 
were received and which we expect WIA reauthorization to push 
forward on.
    When WIA was enacted in 1998, Congress was responding to an 
earlier GAO report identifying 163 Federal programs. WIA 
consolidated 50 of them into what is now the Nation's primary 
workforce delivery system. WIA further streamlined service 
delivery by integrating access to at least 13 of these 
federally funded programs at the street level in the One-Stop 
career centers.
    Today, GAO has identified 47 different programs. In 
reality, 76 percent of all funding and 91 percent of all 
participants identified by the GAO are served through the 
programs under the Workforce Investment Act.
    While improved system alignment, more co-location at One-
Stops, and some consolidation where appropriate would likely 
improve quality and efficiency, significant savings shouldn't 
be expected. Most of these programs, including those under WIA, 
have received funding reductions in real dollar terms over many 
years and are significantly underfunded relative to their 
mission and need, especially given the 234 percent increase in 
demand for services the last 2 years. Congress should use the 
GAO findings as a guide to obtain increased system alignment 
and administrative savings, but not as a rationale for 
significant cuts in program services.
    To enhance the effectiveness of training, especially for 
dislocated workers, and address many of the concerns raised by 
the evaluations, at least three strategies should be adopted.
    First, sector-based and on-the-job training should become 
common practice nationwide to boost earnings, as in the 
Jacobson and P/PV-Aspen studies. Second, reduce the substantial 
foregone earnings dislocated workers experience while they are 
in training by accelerating their completion time to credential 
attainment and reemployment. This can be done. And third, 
expand the use of technologies and career navigation strategies 
to better match workers with either jobs or training.
    Finally, the Congress has to reauthorize the Workforce 
Investment Act.
    Thank you very much.
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    Mr. Rehberg. Thank you.
    Mr. Bishop, welcome.
    Mr. Bishop. Thank you.
    Chairman Rehberg, Members of the committee, thank you very 
much. And I appreciate the opportunity of being able to come 
before you and talk about how we improve economic opportunities 
for families through appropriate job training.
    I come to you today as somebody who has both been involved 
at a large community college at the local level in Utah; 
somebody who has been involved in workforce and welfare reform 
at the local level, as was cited in the GAO report, in Utah; 
and somebody who oversaw national public policy.
    And it seems to me that the real question before you today 
is one, what is our national policy goal with regard to these 
programs? Secondly, is the current system as designed adequate 
to meet that national policy goal? And third, if not, what kind 
of reforms do we need to implement in order to make it so?
    To me, the national policy goal is very clear. Both 
President Obama and Vice President Biden in the last few months 
have discussed this, as well as the Gates Foundation, other 
foundations, and many other individuals. And that is we need to 
be able to provide better opportunities for individuals to 
enter postsecondary education and training in this country.
    The data is staggering when it comes to those who do not 
have this access. If you have a high school education or less, 
you face lower earnings, higher unemployment, and all of the 
BLS and other data show that the fastest-growing jobs and the 
jobs that are going to be in demand over the next 10 years are 
going to require postsecondary education and training.
    Therefore, it seems to me that as we have this discussion, 
we need to take a real hard look when it comes to job training 
programs, are we actually training individuals?
    The evidence to me is pretty overwhelming that the current 
system as designed is not meeting this national public policy 
goal. In fact, the workforce investment system, when it was 
created in 1998, really had two overarching objectives, and we 
have heard some of this today already.
    One was to consolidate funding streams. There were many 
more than there are today. And secondly, the idea was to create 
One-Stop career centers where, at the local level, a variety of 
programs would come together to fund that local One-Stop career 
center and fund programs and services to individuals who enter 
the doors of that One-Stop and access the myriad of these 
programs.
    The problem is we didn't go far enough. And let me just 
explain what is really going on out there. We essentially, in 
my opinion, have two parallel job training systems in this 
country just within the Department of Labor.
    The first is a State-based system called the Wagner-Peyser 
Act. You hear Employment Services discussed quite a bit. 
Wagner-Peyser funds the employment services. Employment 
services are essentially helping somebody find a job. It is 
light-touch, low-cost services.
    Under a department regulation that was promulgated in the 
late 1990s, these services can only be provided by State 
employees, with the exception of three States where they 
created a pilot program. And Colorado, Massachusetts, and 
Michigan have flexibility, but nobody else does. So employment 
services must be provided by State merit staff employees.
    The second system we have is funded under the Workforce 
Investment Act, where the monies flow to the States and then 
continue and flow down to the local workforce investment 
boards, the bulk of the funding streams of these three funding 
streams. So, essentially, you have a locally based, locally 
administered WIA system and a State-based employment service 
system.
    Now, the WIA system, as we have heard, authorizes three 
levels of services--core, intensive, and training. The irony 
is, especially with the fact that Wagner-Peyser is mandated to 
be provided by State employees, is that the core services 
provided by WIA by local employees are exactly the same as the 
State-based employment services.
    So all of the core, in particular, that you hear about are 
the same as the employment services provided by the State 
employees, and this has major ramifications. And I discuss this 
in my testimony. I don't have a lot of time to do so today. 
Under current TAA grants that are out for competition that 
community colleges are applying for, it has created all kinds 
of confusion because TAA, under department regulation recently 
promulgated in the last year, must also be provided by only 
State employees.
    So what are we going to do about it? I suggest in my 
written statement three overarching reform efforts. The first 
is we need to radically revamp programs in order to make funds 
more available for participants to enter into postsecondary 
education and job training.
    We did an individual training account experiment a few 
years ago, and it showed that when given maximum choice, 
individuals will take the training funds and will enter 
appropriate training. It doesn't drive up costs, and the 
employment outcomes were exactly the same as those who are 
getting training through the current system.
    Secondly, I do believe we need to consolidate major funding 
streams. The reality is we call them--WIA a job training 
program. It should not be called a job training program.
    If we are lucky, right now, we are training maybe 250,000 
people per year exiting out of those programs, if we are lucky. 
It is training very few individuals. These millions of people 
you hear getting services are primarily getting very light-
touch core services coming into the One-Stops.
    Finally, I think that--well, let me also mention that we 
also have a proliferation of job training programs throughout 
the Federal Government right now. Department of Energy, 
National Science Foundation, HHS, DOL, Department of Education, 
they are all putting out postsecondary education training 
grants, all over the country.
    We have probably paid for things like energy efficiency 
training and curriculum about 10 times over.
    Mr. Rehberg. Mr. Bishop, I am going to go ahead.
    Mr. Bishop. Yes, sorry. Yes, thank you.
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    Mr. Rehberg. I ask the first question, and I am going to 
grant you my time to continue.
    Mr. Bishop. Okay. So I can wrap up.
    Mr. Rehberg. And then if you could, maybe at the same time 
answer, I was going to ask you about money going to One-Stop--
--
    Mr. Bishop. Yes.
    Mr. Rehberg [continuing]. Versus vouchers, and I don't 
think the budget has changed much since you have left. So why 
don't you go ahead and finish your statement.
    Mr. Bishop. Okay.
    Mr. Rehberg. And then use the rest of my time to answer my 
question.
    Mr. Bishop. Okay. Thank you, Chairman.
    And I apologize. There is a lot to get in in a short amount 
of time.
    Because the last thing I think we really need to ask 
ourselves, if the national policy goal is to help individuals 
enter postsecondary education and training, the question is, 
and it gets to the One-Stop infrastructure. I have now seen in 
the last 3 years, at least in one location or one State, in 
Utah, that I really believe we ought to take a hard look at 
whether community colleges and other education and training 
institutions could also provide the One-Stop functionality.
    The reality is--and I have seen this through grant 
applications and other things we have done--is that community 
colleges, as they get education and training grants, are trying 
to figure out what is the role of the One-Stop system, the WIA 
system in this?
    And that role really, at its best, is to help with intake 
of workers into these training programs, and then on the back 
end, they help--maybe help those people get employment. But the 
reality is the community colleges are also working with the 
same employers the WIA system is working with. We are all 
hitting up the same employers to help with curriculum and sit 
on workforce investment boards and the like.
    And so, to me, the reason we are not training very many 
people through the WIA system is because we have this duality. 
Most of the costs of the programs of WIA and Wagner-Peyser are 
going to core services and to fund the infrastructure costs of 
the system, building leases, personnel costs, and those kinds 
of things. There is very little money left over for training.
    Mr. Rehberg. And how much do you think that is?
    Mr. Bishop. Well, I can tell you, if you look at the four 
programs, taken together, in the $4,000,000,000 to 
$5,000,000,000 in funding, and we are maybe training 250,000 
people. That tells you that the bulk of that money is going to 
infrastructure.
    Mr. Rehberg. Okay.
    Mr. Bishop. And one of the things that can be looked at in 
regulation is the definition of administrative and program 
costs. I would recommend that as well because a lot of things 
that could be administrative costs are actually tagged as 
program costs in the program.
    I don't have a dollar figure, Mr. Chairman. But it is 
pretty dramatic.
    Mr. Rehberg. Okay. I am going to ask Mr. Besharov then a 
question, and that is, in your view, have the local workforce 
boards been effective in curbing unemployment, or has it been--
how would you react to--I think I know your answer. So then how 
would you react to his suggestion of maybe consolidating the 
functions back at the local level?
    Mr. Besharov. Well, I think there has to be a major 
consolidation. The question is how best to do it to create a 
mission-driven--oh, my goodness, we can use cliches here--but a 
mission-driven program, whether that means consolidating and 
creating one program at the local level or loosening the rules 
about One-Stops. My understanding is, for example, that most 
States now discourage private providers from even bidding on 
those programs.
    Everywhere one looks, this seems to be a program, and I am 
going to go beyond WIA to job training in general, a program 
captured by the trainers, not the trainees. And so, I would be 
extremely supportive of exploring how to undo that, whether it 
is with a strengthened voucher or whether it is with a 
streamlined program at the local level.
    Mr. Rehberg. Could it be done with a flexible grant to the 
States rather than picking winners and losers as far as a 
community college or something? Could we just identify the 50 
States and divide it up and give them one flexible grant?
    Mr. Besharov. If you did that, I hope you ask the States to 
participate in the spending. I would hate to have the States 
have this money without any responsibility themselves for 
this----
    Mr. Rehberg. I wrote ``skin in the game'' down.
    Mr. Besharov. Thank you.
    Mr. Rehberg. So I got that message.
    Mr. Besharov. It is a technical term. We talk about that at 
the university all the time.
    Mr. Rehberg. Yes.
    Mr. Besharov. The other thing I would add, just to make 
that point just a little further, we have an unemployment 
insurance system that is in crisis. The States are broke, and 
that is going to come back to haunt, I think, this Congress 
before the next election.
    And more money is going to have to go into the State 
unemployment system. That will be a further time to think about 
the connection between the unemployment programs and the job 
training programs.
    Mr. Rehberg. Mr. Sherrill, in about 30 seconds, do you have 
anything to add?
    Mr. Sherrill. I agree. I mean, looking for opportunities 
for consolidation, getting input from folks on the front lines, 
State and local views here. With regard to the vouchers, we 
have prior experience with what was called ``career advancement 
accounts,'' where three States plus some of the auto industry 
areas had some pilots and demos. So I think it would be a good 
idea. I don't believe that the evaluations have been publicly 
issued on those to see how that could inform the discussion.
    Mr. Rehberg. Okay.
    Ms. DeLauro?
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Just a couple of comments. First I have some additional 
information on the subject of job training that I would like to 
have put into the record.
    Mr. Rehberg. Without objection.
    [The information follows:]

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    Ms. DeLauro. And I would also like to submit for the record 
a letter from 900 businesses, expressing their support for the 
current workforce system.
    Mr. Rehberg. Without objection.
    [The information follows:]

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    Ms. DeLauro. Thank you.
    With regard to administrative costs, an exhaustive study 
conducted by Demetra Nightingale of the Urban Institute 
concludes that the only way to save by consolidating job 
training programs is by cutting services. Administrative costs 
are so low that most of the costs in these programs are in 
services.
    So there is conflicting information about with regard to 
administrative costs, and that report is entitled 
``Administrative Cost Savings Resulting from Federal Program 
Consolidation.''
    I was intrigued by Mr. Bishop's comments about the 
recommendation to evaluate whether community colleges, and 
especially proprietary universities, can serve as One-Stop 
centers. Right now, as I understand it, there are 195 One-Stops 
in community colleges and that the opportunity is open to 
proprietary colleges as well.
    I might add with regard to the proprietary colleges, that 
the U.S. Department of Education data shows higher default 
rates for students who attend for-profit schools compared with 
those attending public or nonprofit schools. Staggering number 
of students are leaving for-profit schools, presumably many 
without completing a degree or a certificate.
    To boost enrollment, some for-profit schools recruit large 
numbers of new students each year. Students at for-profit 
colleges make up less than 10 percent of people receiving 
higher education, but up to 44 percent of those defaulting on 
Federal student loans.
    Nearly 25 percent of all Pell grant dollars, almost double 
the percentage from a decade before, go to for-profits. In 
2008-2009, the three largest recipients of Federal financial 
aid in the country were for-profit colleges, and on average, 
they received three-quarters of their revenues from Federal 
grants and loans.
    Further, as I looked at the background information, your 
own background information, Mr. Bishop, it appears that Phoenix 
University, with which you have a relationship, that is your 
employer, in essence, would benefit from the policies that you 
are advocating here today.
    And with regard to Pell grants, I might also add, I will 
just say this. I heard your comment about Pell grants, that you 
are a strong proponent of Pell grants. But there are people on 
this committee who believe that Pell grants are a form of 
welfare. I don't happen to view it that way. I think that they 
are an opportunity to get an education.
    But again, Mr. Bishop, given the data on Pell grants, where 
is the evidence that the proprietary schools would make better 
use of taxpayer dollars with training vouchers? I don't make up 
the data about proprietary schools. Perhaps your own 
association with a proprietary school could lend some 
information of how that is working in the face of what the data 
is with regard to those schools?
    Mr. Bishop. Okay. Well, first of all, let me make clear for 
the record that I am here representing myself. I started 
employment with the University of Phoenix on February 14th of 
2011, and none of my comments reflect their position. So let me 
just say that for the record.
    Ms. DeLauro. Well, but, in fact, you do have an 
relationship with a for-profit school.
    Mr. Bishop. Yes, right.
    Ms. DeLauro. You are affiliated with a proprietary college?
    Mr. Bishop. Sure, I am. Yes, I am. Proudly so.
    Ms. DeLauro. Good.
    Mr. Bishop. And I would say, secondly, that nothing in my 
statement makes any value judgments or determination on whether 
community colleges, nonprofit providers, or proprietary schools 
would do better, do worse, or get any sort of amount of any of 
this money.
    What I suggest is, is that under the current structure of 
the system, very, very few people are getting training. We have 
lots of discussion. The current administration is very 
supportive of trying to help individuals get postsecondary 
education credentials, and this program is doing so at a very 
minimal rate.
    Ms. DeLauro. I want to make a----
    Mr. Bishop. That is what I suggest.
    Ms. DeLauro. I would like to make one other point with 
regard to your comments, which is about merit staffing.
    Mr. Bishop. Yes.
    Ms. DeLauro. And you emphasized that.
    Mr. Bishop. I did.
    Ms. DeLauro. Merit staffing is essentially the choice 
between federal dollars supporting public employees versus 
contractors. I happen to sit on the Agriculture Appropriations 
Committee and used to chair that committee just about a year 
ago. And the issue we dealt with was in the states of Texas and 
Indiana, which contracted out their services on the food stamp 
programs. Those cases became the two biggest failures that we 
have had in administering the food stamp program. We spent 
millions of taxpayer dollars to start that system, and now we 
have to pull back.
    Both states had to stop using contractors versus what were 
called merit staff.
    Mr. Bishop. Mr. Chairman?
    Ms. DeLauro. Thank you, Mr. Chairman. My time is--Mr. 
Chairman, my time is completed. The gentleman's time is 
completed.
    Mr. Bishop. May I just----
    Mr. Rehberg. As a matter of courtesy, I would suggest to 
the ranking member that she not misquote the chairman of this 
committee. I have never said that Pell grants are a form of 
welfare. And I will correct the record, and I will continue to 
correct the record.
    As a matter of comity, I would suggest we not enter down 
that path or the minority Members are not going to enjoy this 
subcommittee as well as they have enjoyed it up to this point.
    Mr. Bishop, I give you the opportunity to respond.
    Mr. Bishop. Thank you.
    My comments on State merit staffing have nothing to do with 
public versus private contracting. What they have to do with is 
the delivery of services because under Wagner-Peyser, a local 
county employee, public employee; a local city public employee; 
or any other public employee who is not a State employee can't 
provide Wagner-Peyser services.
    So it has nothing to do with public versus private. It has 
to do with only State employees providing services that other 
public employees are providing through the WIA system.
    Mr. Rehberg. Thank you, Mr. Bishop.
    Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.
    Dr. Sherrill, it is doctor, isn't it? It doesn't say there. 
But in your testimony, you have said that little is known about 
the effectiveness of employment and training programs because 
only 5 of the 47 programs reported that they had conducted any 
impact study since 2004. Is that correct?
    Mr. Sherrill. That is correct.
    Mr. Alexander. You also say that the impact studies to 
measure the success of job training programs may not be cost 
effective for smaller programs. Does it make any sense at all 
for Congress to continue funding programs if we don't know 
whether they are working or not?
    Mr. Sherrill. Well, I think this is an important issue for 
you to consider as we look at opportunities for consolidation, 
et cetera, because this has been a recurring theme in our work 
on the Workforce Investment Act over the years. Not enough is 
known about what works, what doesn't work in terms of the 
research.
    We have looked at the Department of Labor's research agenda 
recently. We found that more accountability is needed in terms 
of processes for tracking the studies, for issuing studies in a 
timely way so that they can inform public policy, in terms of 
getting expert input on their research agenda. So we really 
think that there are more opportunities on the research front.
    Mr. Alexander. The individuals that are running or working 
at the One-Stop centers, what qualifications do they have to be 
there? Are they professionals? Are they trained to do what they 
do? Who oversees that and makes sure that they are properly 
trained?
    Mr. Sherrill. Well, we haven't looked specifically at the 
training qualifications. Local areas have a lot of flexibility 
in terms of how they set up their programs, the extent to which 
they contract out for service providers, community colleges, et 
cetera, and in terms of the kind of people that they use in-
house to do the programs.
    The local workforce investment boards are supposed to have 
a key role in overseeing the process and having employers have 
an employer-driven focus there.
    Mr. Alexander. Thank you, Mr. Chairman. Note the time left, 
please.
    Mr. Rehberg. Duly noted.
    Ms. Lee.
    Ms. Lee. Thank you, Mr. Chairman.
    Good morning. Let me thank all of you for being here, and 
this is such an important issue. For so many of our 
constituents who historically have been shut out of the 
workplace for whatever reasons, job training is essential as a 
pathway out of poverty.
    In my district, and Mr. Uhalde, let me ask you about Job 
Corps. In my district, well, we have a Job Corps center in 
Treasure Island that serves young people in my district, and it 
trains about 800 students, employs about 245 staff. One of 
their emphases is on the healthcare occupations and 
professions. They train students as certified nursing 
assistants, licensed practical nurses, other healthcare 
occupations.
    Wanted to ask you about funding cuts in terms of the impact 
on Job Corps' ability to train really the next generation of 
healthcare workers, EKG technicians, medical assistants, dental 
assistants. Because we know that the healthcare industry is a 
growth industry, and so I am concerned that some of the cuts 
could really stifle and stop the training for jobs that are 
going to be good-paying jobs of the future.
    Secondly, let me just ask you as it relates to private 
sector employers, some believe that job training and readiness 
programs administered by the Department of Labor really provide 
virtually no benefit to private sector employees. So I would 
like to ask you in terms of what your take is on how job 
training and employment readiness programs have benefitted or 
not benefitted private employers?
    Mr. Uhalde. Thank you.
    With regard to Job Corps, of course, there is the proposed 
cuts in H.R. 1 that would eliminate $300,000,000 from Job 
Corps' budget, and I believe there is a rescission of 
$600,000,000 from the program. Those obviously will reduce the 
number of students or corps members that Job Corps is able to 
serve from about 70,000 to something less.
    Job Corps is the one national program that we have that has 
been evaluated rigorously for youth that has been able to 
demonstrate a statistically significant improvement of about 12 
percent in earnings up to 3 or 4 years for all the students. 
And for the older students, even more. It is a program that 
infuses both academic and occupational training and 
instruction. It is for very difficult to serve dropout youth, 
and that and a couple other programs around the country are 
about the only ones that are really effective.
    So we should tread carefully. Job Corps is making a lot of 
improvements. They are moving more to high school diplomas 
rather than GEDs, more industry-recognized credentials. So I 
think that is important.
    With regard to business, WIA provides a lot of services for 
business. The services include rapid response services. When 
businesses have mass layoffs, plant closings, States move in 
and actually start engaging workers in training and placement 
before they even leave the job sometimes.
    Secondly is layoff aversion services for businesses. Third 
is economic development partnering to help grow economies and 
attract businesses. GAO in 2005 did a survey of WIA, found that 
about half of employers are aware of the One-Stop system. About 
three-quarters of large employers use some of the core services 
for the One-Stops.
    Smaller employers, about one-quarter to one-half of them 
use it. And the primary use is to fill job vacancies, and about 
three-quarters of employers report they are satisfied.
    So it has a terribly important role, and the last thing I 
would say is that it is important to get to know the needs of 
business in those industry sectors so that you can translate 
business needs into curriculum and training capacities in 
colleges or proprietary schools. And that conversation has to 
be constant, and workforce boards do that.
    Ms. Lee. Okay. Thank you, Mr. Chairman.
    Mr. Rehberg. Who is next? Mr. Simpson.
    Mr. Simpson. Oh, that would be me. Thank you. Thank you, 
Mr. Chairman, for holding the hearing today.
    And thank you all for being here.
    Everyone on this panel and I think everyone in Congress 
knows the importance of job training. I read a report not too 
many years ago that the average high school graduate is going 
to have to be completely retrained for a new job, not just 
upgraded skills, but a new job seven times in their lifetime.
    The days of being able to graduate from high school, go to 
work in the factory, and retire 50 years later are gone. In 
fact, one of the most fascinating things I saw on TV a few 
years ago was they asked a bunch of fifth graders what they 
wanted to be when they grew up, and there was the typical 
answers of fifth graders. You know, I want to be a policeman or 
a fireman or whatever, or a cowboy. No, nobody said 
congressman. [Laughter.]
    One student answered, though, that I thought was kind of 
interesting. He said, ``I don't know. I don't think it has been 
invented yet.'' And that is the reality.
    So we are all interested in job training. I was very 
interested in the aspect of community colleges because that is 
kind of where I have been focused, and I wrote it down before 
you said it that community colleges are going to be more and 
more important as lifelong education, not just continuing 
education. But lifelong education becomes more and more 
important in the future.
    Let me ask you just a general question. If there was one or 
two things you could do, and I will ask each of you to answer 
it as briefly as you can, one or two things that you could do 
to improve the job training of this country. Not necessarily 
this program, but the job training in general, what would you 
do?
    I will start with you.
    Mr. Sherrill. I think I hit the theme already in terms of 
just getting better information about what works and what 
doesn't and getting more of local innovation, State innovation 
at that level, too, is important to look for cost efficiencies 
and effectiveness.
    Mr. Besharov. A number of the other witnesses have talked 
about the fact that there has been research and experiments 
about giving the trainees greater control of what training they 
get, and that research, I think, is accepted by most analysts. 
The trainees can be trusted to do as good a job as the public 
employees.
    And the second point I would make, since you asked for two, 
I was listening to this argument about community colleges and 
so forth. It is a much broader problem than that. In the UK, 
the Labor government started a consolidation of job training, 
unemployment, and disability programs and privatized the 
provision not just of the training, but of the One-Stops. 
Privatized it to the amount of 1,600,000,000 pounds a year, and 
they thought it was perfectly fine to let all sorts of 
qualified bidders propose to provide job training programs.
    I think we ought to open up the doors to more models, and 
the only way we are going to do that is to break the yoke of 
this being a one kind of program nationwide.
    Mr. Uhalde. Mr. Simpson, I won't repeat some of the things 
that have been said. Let me say a couple things.
    To draw from the evidence that has been presented on 
evaluations, there are two things that make the cost of the 
expenditures on training effective. One is to have a high rate 
of return after one leaves the program, and the other, 
particularly for dislocated workers, is to reduce the foregone 
earnings that dislocated workers experience when they are in 
training.
    That is where I would disagree with Doug. I don't think 
trainees ought to have cost sharing. They share the cost. They 
give up earnings when they invest their time in training. So to 
improve the outcomes, we need to have closer connections with 
business and industry to have these sectoral and other 
approaches that make for a steeper rise in the earnings of 
individuals when they leave the programs.
    And then, secondly--and this applies not only for WIA, but 
for community colleges and all training programs for dislocated 
workers--is we have got to recognize the time-sensitive nature 
of their time. They want to get back to work.
    So eliminating this semester process for community colleges 
and other proprietary schools and being able to get workers 
into training quickly, compressing it so they do training 5 
days a week, not Tuesdays and Thursdays for an hour and a half 
each day; articulate the sequence of the courses so that the 
end of one course's exam qualifies you for the next course, not 
some remediation.
    So there are things to accelerate completion.
    Mr. Simpson. Mr. Bishop, since we went down the line and 
you got left out, I will grant you 30 seconds to respond as 
well.
    Mr. Bishop. Thank you.
    I will just say very quickly again if the goal of job 
training that is funded by the Federal Government is to help 
people get skills and credentials, then I think there are two 
overarching things that must happen. One is we have got to stop 
the proliferation of funding and appropriating millions and 
billions of dollars to programs all across the Federal 
Government for job training, especially in agencies and 
departments that have no business being involved in job 
training, and figure out how do we have a much more targeted 
approach.
    And secondly, I would do every single thing I could to 
figure out the best ways to get funds in the hands of people to 
pay tuition, fees, and those other costs. The greatest barrier 
to individuals in this country right now getting access to 
postsecondary education and job training is financial.
    Mr. Rehberg. Ms. Roybal-Allard.
    Ms. Roybal-Allard. The January 2011 GAO report notes that, 
and I quote, ``Even when programs overlap, the services they 
provide and the populations they serve may differ in meaningful 
ways.''
    Mr. Uhalde, have you found this observation of our 
workforce development system to be true? And in your 
experience, have you found that the program overlap documented 
by the GAO leads to duplicated services across programs?
    Mr. Uhalde. I think the GAO has well documented the overlap 
of programs, the proliferation--I can't even say the word. But 
all these programs, particularly the programs beyond the 
Workforce Investment Act that are in a variety of these other 
departments and agencies. But that is a lot different than 
saying that any individual is getting benefits from multiple 
training programs.
    Most of these programs are not funded to match their 
mission or their need. The Adult Program in WIA is a universal 
access program. So it is going to overlap every one of the 
other 46 programs. But it is not actually duplicating services.
    Now the administrative efficiencies we talked about, I 
think, are pretty substantial in trying to make sure that they 
are coordinated and aligned, that they are pulling in the same 
directions. The common performance standards that the last 
administration tried to do across programs is terrific. I 
failed a decade ago trying to do the same thing, and it is 
important because you can't have people looking at different 
goals and expect their programs to line up and be 
complementary.
    Ms. Roybal-Allard. And one of the reasons also is don't job 
training programs, aren't they tailored to meet unique needs of 
the American workforce, such as veterans, disabled workers, 
low-income youth, and migrants?
    Mr. Uhalde. Absolutely. You wouldn't expect general 
services programs to be able to serve people with severe 
disabilities, for example, in many cases. Much of the 
proliferation of programs is, in fact, Native American programs 
because every time we legislate a program, we have to do it for 
the Indian Nation.
    We have veterans programs that replicate these programs, 
and I don't think this Congress is going to be eliminating 
veterans employment and training services across the board. And 
there are special needs that migrant seasonal farm workers, for 
example, have that you need to have a program.
    What we do, though, is we need to bring them within the 
workforce investment system, as we do with farm workers, Native 
American programs. I would advocate bringing TANF full bore 
inside the One-Stop system, food stamps, employment and 
training, the SNAP program. Not to eliminate these programs, 
but to make sure that we use the administrative efficiencies of 
workforce boards and the One-Stop and be able to align the 
services so that they are complementary and not at competing 
ends.
    Ms. Roybal-Allard. I was very pleased that Secretary Solis 
recognized the importance of rigorous evaluation and created 
the Chief Evaluation Office in 2009 to increase the 
department's capacity to conduct high-quality, rigorous 
evaluations.
    Mr. Sherrill, have you noticed any improvement since 2009 
in random assignment evaluations by ETA, and how does that 
compare to the years between 2001 and 2008?
    Mr. Sherrill. Well, we have done, as I mentioned earlier, 
reports that have focused on ETA, Department of Labor's 
research program, and identified opportunities for further 
improvements in that area. And we have a report that will be 
issued in just a few weeks, later this month, that goes into 
further detail on the steps that ETA has taken to improve its 
research program and the extent to which its research 
priorities reflect key national employment and training issues.
    So please stay tuned for that further update on progress 
there.
    Ms. Roybal-Allard. Okay. And does the GAO have any reaction 
to the $10,000,000 rescission from ETA's evaluation funds for 
the current program year included in H.R. 1? For example, do 
these cuts have the potential to delay any further the 
evaluation improvements that Secretary Solis has funded and 
that the GAO has recommended since 2004?
    Mr. Sherrill. Well, in general, we think it is important to 
have sufficient money to do the research that is needed in 
these areas. We haven't looked specifically at the effects of 
that.
    Mr. Rehberg. Mr. Flake.
    Mr. Simpson. He's not here.
    Mr. Rehberg. Is gone. All right. [Laughter.]
    Well, Mr. Kingston, you are next.
    Mr. Kingston. No, I think Mrs. Lummis is next.
    Mr. Rehberg. Then Mrs. Lummis.
    Mr. Kingston. One of the disadvantages of the way you keep 
time and call on people is that you are fair, and it is a real 
pain in the neck for those of us who come late. [Laughter.]
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Well, thanks, Mr. Chairman.
    And I want to acknowledge, Dr. Besharov, I think I remember 
you from the Budget Committee, a Budget Committee hearing about 
a year ago, and I used to be on the Budget Committee. It is 
nice to see you again.
    And you had some thoughtful, innovative ideas then. I see 
you do again. So I want to pursue that line of questioning, and 
I would ask others to chime in as you feel motivated.
    You recommend allowing trainees more say in how they are 
trained and means testing the benefit on a sliding scale. And 
you know means testing makes some people squeamish, but it is 
an intriguing idea. And I say that because I come from the 
State of Wyoming, which has been identified as one of the two 
best-run States in the Nation, and we do a lot of 
experimentation, and we can, quite frankly, because we are more 
nimble than other States.
    We have the smallest population in the Nation. And we do a 
lot of joint legislative-executive projects that allow the 
legislators and the executive branch to work together to try to 
reform things. So could you talk a little more about how you 
see that working? Especially the means testing component 
because I think you apply a different connotation to that term 
than sometimes we do here on Capitol Hill.
    Mr. Besharov. It was my way of saying that--Thank you, by 
the way, for the very kind words. And I think there were a 
number of people here.
    Ms. DeLauro. That were on the Budget Committee.
    Mr. Besharov. Yes, yes. This is an indirect answer. Ray 
talked about the fact that much of this training is on the 
schedule of the trainer, not the trainee. And I have seen this 
time and again.
    Often the training provided under WIA, for example, is 
provided during surplus hours, whether it is a community 
college or some other job training program. And it is Tuesdays 
for 9 months, when it could be Monday, Tuesday, Wednesday, if 
not Thursday and Friday. I don't want to get carried away about 
this. I teach in a university. We don't want to go there. 
[Laughter.]
    But our students, this is a graduate school where I teach, 
our students pay to sit in the room. And they get angry at us 
when we cancel classes. Undergraduate students don't get angry 
because their parents are paying.
    Mrs. Lummis. Right. Yes.
    Mr. Besharov. They have an investment in the training they 
are getting, and they are taking that training because they 
expect to get a better job when they graduate. That is why they 
pay us to talk to them.
    Something like that, without getting carried away, I think 
should at least be tried--Ray just scratched the surface. I 
know only a little bit about the details of the programs around 
the country. But I see it wherever I look; job training 
programs that are provided because they have the equipment to 
do something that is no longer relevant, and the trainees don't 
have a choice because it is that or nothing.
    I think the trainees need to be part of the team that says 
we want better training, and part of the way to do that is to 
give them--those who can afford it. Now I am not talking about 
people who are on welfare and so forth, but those who can 
afford it to help pay for it because then I think, like the 
students in my school, they will insist on a better training 
experience.
    I wouldn't jump into this. I would try it, though, and see 
if it worked.
    Mrs. Lummis. Well, thank you.
    And my next question is about this proliferation of job 
training programs that has been alluded to. I think 47 job 
training programs across the $18,000,000,000 Federal job 
training spectrum. And of course, they all develop their own 
little constituencies and advocacy groups, and so consolidating 
will be a challenge.
    Again, referring to my own State, when we have done it, 
program consolidations and trying to rationalize, State 
government, we did it through these special committees, where 
you had some legislators and some executive branch people and 
then some people from the private sector or nonprofit community 
who could contribute their thoughts as well, such as our 
panelists today.
    Can you, any of the panelists, in fact, any of the Members 
of Congress who are here, too, offer ideas about how that can 
be done successfully?
    Mr. Rehberg. Your time is up. [Laughter.]
    Mrs. Lummis. I was just getting rolling, Mr. Chairman.
    Mr. Rehberg. I might point out that my staff tells me that 
I was, in fact, correct. Mr. Kingston was next.
    But if you want to suggest to a woman from Wyoming, a 
rancher, that ladies first. Good luck. She is tough. 
[Laughter.]
    Mr. Kingston. He is a southern gentleman.
    Mr. Rehberg. Yes. You are up. Go.
    Mr. Kingston. She is also on a subcommittee I might need 
her vote on. [Laughter.]
    And she may go over to Ms. DeLauro on some issues. So I 
have to keep her happy.
    But actually, where she left off, I would like to ask that 
question for the record under the assumption that you would not 
be able to answer it spontaneously right now. But for the next 
several months, there will be continuous talk about the 47 
Federal jobs training programs.
    So what I would like to ask you is could you each submit if 
you were the one to consolidate it, how would you consolidate 
those? Would you consolidate them down to 1 or to 10, 15, or 
would you expand them to 60? And if you could do that, I think 
it would be enormously helpful to all of us, wherever you are 
on the spectrum.
    So I would like to ask that for the record.
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    Mr. Kingston. And then I want to know, Mr. Bishop, you 
talked about 250,000 people who come out of the system, and I 
want to get a clarification. Are you saying 250,000 actually 
graduate into the workforce and have a job, as opposed to 
millions who take the courses? What was that 250,000?
    Mr. Bishop. Thank you. Thank you, Mr. Kingston.
    It is, right now, if you look at the ``millions of 
participants'' that are getting services through the workforce 
investment system, roughly 250,000 of them annually are 
participating in job training services. I reference in my 
written testimony that according to the last time period that 
is listed on the Employment and Training Administration's Web 
site, under the WIA Adult Program, only 130,000 people out of 
about 1.2 million participated in actual training services.
    Mr. Kingston. Well, what do the rest of them do?
    Mr. Bishop. They are involved in the core services and 
intensive services. It is light touch, low cost. Workers come 
into the One-Stop center. They may look on the--get some 
assistance with reemployment, get a referral to a job, and off 
they go.
    Mr. Kingston. Can you give us, probably for the record, a 
breakdown of the 1.2 million? And I could see they don't need 
all of it, but you are saying they do get what they want out of 
it, and they move on. And do they move on to the workplace?
    Mr. Bishop. Well, again, the Employment and Training 
Administration's Web site and other reports have been cited, 
look at the employment earnings and job retention outcomes of 
various participants out of these programs.
    Mr. Kingston. What I think would be of interest to this 
committee is where do we get the most bang for our buck----
    Mr. Bishop. Right.
    Mr. Kingston [continuing]. In terms of investing it? And 
then the next question is in the three States--Colorado, 
Michigan, and Massachusetts--on the employment service 
programs, do you have their results versus the other States?
    Mr. Bishop. I do not personally know. I am not sure. Maybe 
Mr. Uhalde knows if a study was done on that. He was involved 
in that regulatory framework.
    Mr. Kingston. How long has the pilot been going on?
    Mr. Bishop. Since the late '90s, wasn't it?
    Mr. Uhalde. Since the late '90s, and there is a study. 
Department of Labor can----
    Mr. Kingston. How does it look? How does it look?
    Mr. Uhalde. My recollection is there was certainly no 
difference between the three States that have pilots----
    Mr. Kingston. No lessons learned? No distinction 
whatsoever?
    Mr. Uhalde. You know, it has been a long time. But DOL 
would be glad to get that study and make it available for the 
record.
    [The information follows:]

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    Mr. Kingston. Yes, when we do a pilot program, it would 
appear that we want to find out if there is a different way, a 
better way, or a worse way, and it would appear that there 
would be--that information would be readily accessible or 
something that is----
    Mr. Uhalde. Yes, sir. It has been a decade since I was 
involved in that.
    Mr. Kingston. Okay. I have a number of questions that I 
will have on the second round or submit for the record. But I 
don't think with the time allotted, I can start a new one. But 
that is what the questions were.
    Let me see, one other program. I do want to say, Mr. 
Uhalde, Job Corps is privately administered in a lot of places. 
Correct?
    Mr. Uhalde. Yes. Each center is contracted out, and except 
for a few run by Civilian Conservation Corps as I recall, type 
programs or Interior and Ag.
    Mr. Kingston. And those contractors, some of them do a 
better job than others, we would assume?
    Mr. Uhalde. That is correct. Sure, and they recompete them, 
and they score them and rank them. And then some get thrown 
out, and they get new contractors.
    Mr. Kingston. And I think that is something that we want to 
know about more because I think it would be of interest to both 
parties and all philosophies that this is a situation where you 
do have private contractors doing a Federal program, and you 
are grading those contractors on their effectiveness.
    Mr. Uhalde. Absolutely.
    Mr. Kingston. Thank you.
    Mr. Rehberg. Thank you.
    Dr. Besharov, you referred to the Heinrich study, and I was 
going to ask you a question about that. Can you tell us a 
little bit about how it was conducted and expand a little bit 
more on the findings of the Dislocated Worker Program?
    Mr. Besharov. Let's see, do we have about 5 hours?
    Mr. Rehberg. Yes.
    Mr. Besharov. So the key issue is the difference between a 
randomized experiment and a statistical manipulation of data. 
That is not meant to be a negative word. In particular, the 
Heinrich study is called a propensity score matching study.
    In a randomized experiment, we randomly assign people to a 
treatment group and a control group. And the reason we do it 
randomly is there are various characteristics of people that we 
can't observe. They are called unobserved characteristics.
    So it is not enough to say that someone is a male in 
California with 3 years of experience doing this or that. There 
are other things we don't observe about people, such as 
motivation, and that is why we do a randomized experiment.
    When a randomized experiment is not available, there are 
other statistical techniques that are attempted. One is called 
propensity score matching. We look at the people who are in a 
program, and we try to scale how likely they were to be in a 
program by whether they have 3 years of education, whether they 
were men, whether they were 42, whatever it is. And then we 
look statistically for people like that in the two groups and 
match them.
    I have already described something that involves a lot of 
computer work back and forth, and it is extremely difficult, if 
not impossible, to judge the quality of this work unless one 
redoes it because it is a black box.
    Carolyn Heinrich is one of the best researchers in the 
country. I am proud, as I said, to have published this paper. 
So I like it. A lot of people like it. But it is based on this 
kind of research, which is, in the end, very difficult to judge 
its validity. We all feel better if it is a randomized 
experiment.
    The Department of Labor feels better if it is randomized 
experiments. Carolyn Heinrich would feel better if it was a 
randomized experiment. We all feel that way.
    So she did this study----
    Mr. Rehberg. I am going to ask you to wrap up real quick 
because I want to ask Mr. Bishop if he was there at the time.
    Mr. Besharov. She did this study, and she found, like so 
many other people, that the Dislocated Worker Program--and I 
want to say this just yet again--was found not to be cost 
effective even for the people in it, let alone the taxpayers. 
And she found that the Adult Program could be cost effective, 
probably.
    The important thing here is let's at least do something 
about the Dislocated Worker Program. Let's not defend the whole 
darned thing.
    Mr. Rehberg. Okay. Mr. Bishop, were you there at the time 
of the study, or had you left already?
    Mr. Bishop. What year?
    Mr. Rehberg. 2008, and we are just finding out about it. We 
are a little surprised about that.
    Mr. Bishop. I left in 2007.
    Mr. Rehberg. Okay. Are you familiar with the study?
    Mr. Bishop. I am.
    Mr. Rehberg. Could you respond to----
    Mr. Bishop. Well, again, Mr. Besharov is exactly right. The 
challenge we have is that on a lot of our evaluations, we don't 
know if the service delivery, the service that the individual 
got actually made an impact. And let me give you one example.
    We talk about core services and the results of those core 
services. An individual could come into a One-Stop center, get 
registered in the program, meet with a career counselor, be 
registered as somebody getting core and intensive services, 
leave that One-Stop, go out and search for a job on his or her 
own, get a job on his or her own, and get credit under the WIA 
system that the WIA system helped that person get employment 
because they used the unemployment insurance wage record that 
that person now has as the cross-match against the WIA 
participant record.
    So the problem and I think what Mr. Besharov is pointing 
out is without random assignment, we really don't know if that 
intervention made a difference or not because there are so many 
variables involved in that individual's job search. Not 
speaking for him, but----
    Mr. Uhalde. Could I----
    Mr. Rehberg. You bet. Absolutely.
    Mr. Uhalde [continuing]. Augment that? But we do know for 
core and intensive services through six randomized experiments 
in Texas and Washington, South Carolina, New Jersey, Minnesota, 
that core and intensive services for dislocated workers where 
either they are early UI claimants or getting ready to exhaust 
that it speeded up the reemployment of those individuals back 
to jobs, didn't harm their wage, and reduced unemployment 
insurance benefits and increased the tax revenue to the public 
so that these more than pay off the Government.
    So 40 percent says GAO of WIA services are spent for 
training. My colleague says that is not enough. We should do 
more. But 60 percent are core and intensive services that are 
unequivocally cost effective and get people jobs quickly.
    Mr. Rehberg. Thank you.
    My time has expired. But if you have 30 seconds, do you 
want to answer that or not? Probably not. Stay out of it if you 
can. [Laughter.]
    Mr. Rehberg. All right. Ms. DeLauro.
    Ms. DeLauro. I thank you.
    I want to thank Mr. Uhalde for that comment because that is 
what I wanted to press. Sixty percent is spent on core and 
intensive WIA services, job search assistance and career 
counseling. In addition to which with the individual training 
accounts, as I understand it, you have to provide about 5 hours 
of counseling before moving on to this effort, and it is that 
counseling and those efforts that make this--well, you are 
shaking your head no, Mr. Besharov. But it is in the data that 
the 5 hours are required.
    Anyway, let me move on. I don't see a lot of money flowing 
these days. We are talking about $50 a person for core and 
intensive training, and they have used the service. They go 
there. Anybody who has gone to a One-Stop watches what these 
folks are doing, and it is about $4,000 per person for 
training.
    I want to see where there is the impetus and where there is 
the will and the openness to try to look at what we are going 
to do in spending $4,000 per person in this economy, in this 
budget year, when what we have seen with H.R. 1 is removing all 
of the funding essentially for Federal job training programs.
    I would like to again submit for the record the comment, I 
have an op-ed from Carolyn Heinrich here, who says, in fact, 
that the dislocated workers, as you pointed out, Mr. Besharov, 
as accurate, but what continues to receive less emphasis are 
the positive program effects for typically more disadvantaged 
WIA Adult Program participants. So I think her op-ed in terms 
of her commentary on her own research, if we can put that into 
the record?
    Mr. Rehberg. Without objection.
    [The information follows:]

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    Ms. DeLauro. On just an aside point, I will say this. Mr. 
Chairman, don't take issue with the minority. I think the 
people that you need to take issue with are the Huffington Post 
and their recent article. And I just forward that to you 
personally, and you ought to correct the record with them if 
that isn't exactly what you said with regards to Pell grant.
    Mr. Rehberg. If I might? And I won't take up your time.
    Ms. DeLauro. This is my time. It is my time.
    Mr. Rehberg. I won't take up your time.
    Ms. DeLauro. Thank you.
    Mr. Rehberg. You said somebody suggested that Pell grants 
were a form of welfare, and you will not find those words in 
that at all. ``A form of welfare.''
    Ms. DeLauro. It says ``are becoming the welfare of the 21st 
century.'' I just want you to take issue with the Huffington 
Post, not with the minority.
    Mr. Rehberg. I take issue with your mischaracterization of 
my quote.
    Ms. DeLauro. Well, it is not. You have got to take issue 
with the Huffington Post. It equates it with food stamps, with 
low-income energy assistance, Section 8 housing. This is not 
the purpose of this hearing, but we did talk about----
    Mr. Rehberg. You brought it up.
    Ms. DeLauro. I did. Because we talk about Pell grants. And 
we talk about how useful Pell Grants are in terms of training 
and getting an education but when we are looking at H.R. 1, it 
would cut back $845 to the Pell grant program that would affect 
9 million students.
    Mr. Rehberg. So you are not willing to withdraw your 
misstatement or mischaracterization----
    Ms. DeLauro. I don't have a misstatement, Mr. Chairman.
    Mr. Rehberg. The words ``a form of welfare'' were never 
spoken.
    Ms. DeLauro. I would simply direct you again to the 
Huffington Post.
    I want to talk about studies, Mr. Uhalde. Some of the 
evidence presented today uses a quote from Barnow and Smith--
and this is Mr. Besharov's testimony--2008, to sum up evidence 
on job training programs.
    It looks as if the quote doesn't specifically apply to WIA 
or its predecessor program, the JTPA program, J-T-P-A. Earlier 
in the report, Barnow and Smith note the positive impacts of 
JTPA. It was studied carefully and was found to have positive 
overall results. Another specific study relating to WIA is the 
impact study. It, too, finds generally positive results.
    We need to find better ways to train dislocated workers. 
Believe me, we have to do something about TAA, which has never 
worked for dislocated workers. But generally, there is positive 
results on training efforts.
    And we looked at the literature. There is a study that was 
done for the World Bank by two eminent economists and former 
chief economist at the Labor Department, and the study is 
``What We Know About the Impacts of American Employment and 
Training Programs on Employment, Earnings, and Educational 
Outcomes.''
    Its summary, and I am quoting this--this is not my words. 
``It is one of the best of the large body of quantitative 
literature on the effectiveness of American training and 
employment services in improving labor market outcomes, 
complementary of U.S. training programs for disadvantaged 
adults and job search assistance.''
    What is concerning to me is the notion that we should be 
stepping away from the WIA program and from providing a 
significant Federal commitment in this policy area during 
difficult economic times. With the weight of the evidence, 
should we be stepping away from the WIA program and what it is 
doing in an effective way in terms of job training in these 
times?
    Mr. Uhalde. Thank you, Ranking Member.
    Well, clearly, in my statement, I say, no, we shouldn't be 
stepping away. I think the weight of the evidence--I think the 
weight of the evidence for adults is positive and generally 
positive. Doug can barely get those words out, but it is. It is 
positive.
    Mr. Besharov. I can't use the button. That is all. 
[Laughter.]
    Mr. Uhalde. And that is one where you can go back to the 
randomized experiment in JTPA for disadvantaged adults, and 
JTPA is clearly positive and returns $1.50 for every $1 
invested by the taxpayer for training and employment services 
for disadvantaged adults.
    The problem we have is making dislocated worker training 
more effective. I have suggested a couple things. I would also 
endorse a couple things that we have done, trying to better 
link unemployment insurance with training for dislocated 
workers that is making sure that workers can get training while 
they are on unemployment insurance, which the Obama 
administration tried to do.
    Ms. DeLauro. Thank you.
    Mr. Uhalde. And Pell grants, trying to make them useful for 
adults because they are designed for 18- to 24-year-olds.
    Mr. Rehberg. Mr. Alexander? Then Mrs. Lummis.
    Mrs. Lummis. Oh, is it my turn?
    Mr. Rehberg. No, but I am going to go to you next. 
[Laughter.]
    Mrs. Lummis.
    Mrs. Lummis. What about Ms. Lee? Don't we have----
    Mr. Rehberg. Well, he passed. Mr. Alexander passed.
    Mrs. Lummis. Okay.
    Mr. Rehberg. Mrs. Lummis.
    Mrs. Lummis. Thanks, Mr. Chairman.
    Well, I would like to pick up that line of questioning that 
I had to drop earlier because I was too verbose, and it has to 
do with consolidating these programs. How do you recommend that 
we consolidate?
    And an additional comment on Indian programs because I used 
to also be on the Natural Resources Committee, and I note that 
Indians have to go through the BIA and the agency of substance 
for everything. So they have an additional hoop for everything, 
and that seems completely ridiculous for the Indian nations as 
well.
    So could you, anybody, jump in and comment, how do you 
recommend we go about this?
    Mr. Uhalde. I won't suggest programs. I will suggest that 
there have been attempts. Back in '98, we tried to consolidate 
more than we did under Workforce Investment Act. Fundamental 
problem is the committee jurisdictions in the Congress.
    We have proliferation of programs across agencies. They 
proliferate across these committee jurisdictions, and it is 
very difficult for the HELP Committee in the Senate to reach 
over to the Finance Committee and do something about welfare 
reform and TANF, for example.
    So it is somewhat easier in the House, and the issue may be 
that one way these things have been dealt with in the past is 
to have a committee, a special committee set up in the Congress 
that draws from the various committees to address an issue like 
this.
    Mrs. Lummis. And then I would ask some of our veteran 
Members of Congress, have any of you ever participated in one 
such committee before?
    Do they happen? Do they work? Does anybody----
    Wow, nobody has.
    Mr. Besharov. Well, I think the healthcare bill moved 
through the House that way.
    Mr. Kingston. Yes, healthcare did that.
    Ms. DeLauro. We have committees of the whole on the floor. 
We did that with regard to healthcare. We dealt through 
healthcare, we dealt with that kind of----
    Mrs. Lummis. Oh, but you know, you didn't have committees 
where what is being suggested here is where the various 
committees of jurisdiction over job training programs that are 
peppered throughout Government getting together and saying we 
think this one works better than this one or consolidating----
    Ms. DeLauro. Well, sure. You have got a recent proposed 
transfer, I think, of the elderly community service program. It 
is moving from Labor to HHS.
    Mrs. Lummis. And how did that come about?
    Ms. DeLauro. I am going to just assume that there were 
conversations--yes, well, I am just told this, that the 
administration has task forces like that. I can give you some 
examples with regard to food safety. You and I should talk 
about this because I have been wanting to consolidate the 15 
agencies into one single food safety agency. We now have 15 
today that deal with food safety. So there is always an 
opportunity to consolidate.
    But you are looking at a number of places, particularly 
with this budget proposal that has come out in various areas, 
which looks at consolidating a number of programs. And the 
agency task force on food safety, it is Ag, it is HHS, and 
there is maybe one or others who are discussing this.
    Mrs. Lummis. Okay. Well, I will talk to you about the Ag 
programs. How could we replicate that on job training programs? 
Any thoughts?
    Mr. Besharov. Here is why we are having this argument about 
the effectiveness of WIA. In 1994, when the Republicans last 
took over, we had a proliferation of childcare programs. And 
one of the first things they did was to collapse and coordinate 
them.
    Now I think everyone agrees that the coordination and the 
consolidation was good. There is an argument about how much 
money was put in and so forth. Here, the reason I think there 
is an argument about WIA is the question: What does the future 
of job training look like?
    If you are satisfied with WIA, you consolidate by putting 
everything in WIA. If you are not satisfied with WIA, and with 
all due respect, I am not satisfied. It doesn't matter whether 
it is a little effective or not, it is not enough effective. 
And I would, like Mr. Uhalde, look at food stamp training. I 
would look at the coordination with Pell grants and student 
loans because that helps drive this.
    And I would look at the unemployment program, and I would 
think about wrapping that up in a program to meet the skills 
mismatch in this country.
    Mrs. Lummis. Thank you.
    And Mr. Chairman, I yield back.
    Mr. Rehberg. Thank you.
    Ms. Lee, before we begin, I am told by staff that 
subcommittees do it the way I suggested. If somebody passes, it 
goes to the next on this side. That is how I will run this 
committee. I apologize if there was some confusion. It was not 
intended as a slight, and that will be the rule from here on 
out.
    Ms. Lee. Thank you very much.
    Let me ask Mr. Uhalde again, I just want to ask a little 
bit more about the budget cut implications for YouthBuild, the 
reintegration of ex-offenders, dislocated workers. In many 
communities, populations of people really and our constituents 
need job training. Of course, ex-offenders so that they have 
the skills so they can move forward and get a job and not go 
back to prison.
    Our young people need the types of job training and skills. 
Some will or some may or may not go to college. Many now are 
helping with their families, paying the rent, buying food. And 
what just overall are the implications of these cuts?
    And also what is the status of our summer youth job 
program? We tried last year to bump up to about $3,500,000 for 
summer youth jobs. We never were able to get that done. And 
what is going to happen this summer?
    Mr. Uhalde. Thank you, Ms. Lee.
    With regard to YouthBuild and the reentry and ex-offender 
programs, the budget would zero out YouthBuild. It proposed a 
significant reduction in the ex-offenders.
    These are particularly unfortunate because we are finding 
for ex-offender programs that, in fact, not only are they 
becoming effective in getting employment for ex-offenders, but 
because of that, it reduces recidivism. So you can look at 
these as public safety programs, crime reduction programs, by 
helping workers be able to get jobs who are ex-offenders.
    YouthBuild has not had a random assignment evaluation, but 
something that is suggestive of their youthful offender program 
that also shows promise. And now the department has launched a 
random assignment experiment, and hopefully, it will confirm 
those results and others.
    Summer jobs--Recovery Act provided $1,200,000,000 to the 
department in February, and the department launched or the 
workforce system at the local level launched 350,000 summer 
jobs in a remarkable achievement. They recruited all the 
employers for that.
    There is not a request, as far as I know, from the 
administration for continued funding for summer employment. But 
we need to look at it. We are at nearly 10 percent 
unemployment. It is depression-era unemployment for young 
people in this country. The employment rates are disastrous for 
young people.
    Mr. Rehberg. Ms. Lee, if you would yield back some of your 
time, we could get the last two Members before we have to go 
vote.
    Ms. Lee. Sure.
    Mr. Rehberg. Because we can't come back. It is up to you.
    Ms. Lee. Okay. That is fine.
    I will just ask you later why the administration didn't 
request funding for summer youth jobs.
    Mr. Rehberg. And the record will remain open.
    Mr. Kingston.
    Mr. Kingston. Thank you, Mr. Chairman.
    First of all, I wanted to say for the record and those who 
have been listening to the discussion about the chairman's 
comments on a radio program, which was reported by the 
Huffington Post. I have got the transcript, and I am going to 
quote for the record. I believe these are your words.
    ``I am not suggesting that college students are welfare 
recipients. I am just saying that the program itself is 
expending so quickly, it is moving beyond the Federal 
Government's ability to pay. And the reason, as I understand 
it, is that the Pell grants are going from $19,000,000 to 
$43,000,000 in a Department of Education budget that is only 
$48,000,000.''
    So, to me, I want to associate myself with your remarks 
because I think they are critical and that we are spending 
$11,000 in Pell grants per student if, right now, it is 
nationwide there are 9 million students on there. And they can 
be in school as long as 9 years with no requirement that they 
get a degree and that there is discretionary money in the 
program after they have paid for tuition, books, 
transportation, supplies, and room and board.
    So I think it is something that, given an increase of 
anything that goes from $19,000,000 to $43,000,000, we do have 
to look at. So I just wanted to clarify that, as I understand 
it.
    Also I wanted to ask for the record, I am concerned, are 
you guys--I know earned income tax credit does not come under 
your department, but do you coordinate with earned income tax 
credit? Because if the Hollenbeck study shows that the average 
wage for people getting out of WIA is $16,000 a year and kind 
of the public assistance package, if you will, is about $20,000 
a year, then for many people who go through job training, there 
is no incentive. You have to have that earned income tax 
credit.
    But do you guys talk to each other? Is there a 
coordination?
    Mr. Rehberg. If you could answer very quickly, I want to--
--
    Mr. Kingston. Then you know what? Let me ask you for the 
record, the other thing I want to mention also is I understand, 
I saw a statistic yesterday that really shocked me that from 
2008 to 2010, 1.1 million jobs went to migrant workers, 35 
percent who were illegal aliens. But 1.1 million jobs went to 
migrant workers.
    And as we look at a 10 percent unemployment rate and an 
inner-city unemployment rate and a youth unemployment rate 
which are maybe twice to three times that number, certainly 
that has got to be something that is of concern, too, as we 
look at the job situation----
    Mr. Rehberg. Could we get that for the record?
    Mr. Kingston [continuing]. And I would like to have your 
comments. And also, Mr. Chairman, if we ask a question for the 
record, we will have an answer before the markup. Correct?
    Mr. Rehberg. Yes, that is correct.
    Mr. Kingston. Thank you.
    Mr. Rehberg. Ms. Roybal-Allard, you are the last. Yes?
    Ms. Roybal-Allard. I would like to yield 30 seconds to the 
ranking member.
    Ms. DeLauro. I think the Chairman needs to really take 
issue with Huffington Post because in the way they have 
characterized his remarks. Look, I have been often 
mischaracterized in a whole variety of publications, on the 
radio or elsewhere. But in this radio interview, it says he 
compared Pell grants to welfare.
    Mr. Rehberg. And I do take issue with her. But I did not 
want to bring Huffington Post in as any kind of a----
    Ms. DeLauro. Well, but I mean, it is a publication that is 
a reputable publication. Maybe some don't regard it that way. 
And I have taken my 30 seconds.
    Ms. Roybal-Allard, your question?
    Ms. Roybal-Allard. Mr. Uhalde, Mr. Bishop's testimony 
suggests that revamping the job training system in a way that 
targets less funding to staff-assisted and counseling services 
and more to helping participants pay for the costs of 
postsecondary education and training would be a good way to go.
    As I understand it, among the unemployed 25 and older, 2.1 
million have a bachelor's degree or more; 2.7 million have 
attended some college, including those who have completed an 
occupational or vocational program; 3.5 million have only a 
high school degree; and 1.6 million do not have a high school 
degree.
    Given the different educational level of the participants, 
are there benefits to having both training and counseling 
services provided by WIA, and how do you think reducing 
counseling services, what kind of an impact will that have on 
the ability to support and train job seekers and get them into 
the workforce?
    Mr. Uhalde. You know, the One-Stop career centers see a 
range of people. I think Mason is correct in saying that we 
shouldn't call WIA a job training program because it is both an 
employment and training program.
    And that means that it has to do a diagnostic, an 
assessment of everybody that comes in, and try and help those 
people decide what services are best for them. WIA doesn't 
rubberstamp everybody and tell them what kind of service they 
need. WIA offers a menu, and people decide.
    The counseling, as all of these six experimental studies 
have shown, is enormously valuable for those people that it is 
appropriate for. That is, counseling, job referrals, job 
placement, and those things.
    If we want to beef up training, which I don't think anybody 
would object, it shouldn't come at the expense of those 
services. It should come in addition, and that means getting 
money from somewhere else. And since Congress won't appropriate 
new monies, we should probably look where it is best to bring 
other resources in.
    Mr. Rehberg. I apologize for us having to leave. We will 
begin debating the CR afterwards. So, again, we can't.
    The record will remain open for additional questions, and 
we would expect timely answers to those questions, as stated, 
before the markup of the subcommittee.
    Thank you very much.

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                                         Wednesday, April 13, 2011.

   EXAMINING FRAGMENTATION AND OVERLAP OF FEDERAL EDUCATION PROGRAMS

                                WITNESS

GEORGE A. SCOTT, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY 
    ISSUES, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE
    Mr. Rehberg. Welcome. It is a pleasure to have you before 
our committee. As I suggested, we are only scheduled to go 
until noon. I doubt if it is going to take that long. Since you 
are the only witness, I am not going to turn the clock on on 
your opening statement, but I am going to turn it on for Ms. 
DeLauro now. No, not really.
    Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Welcome, Mr. Scott.
    As I said last month at our hearing on Medicare payments, I 
think everyone in this room agrees that our government should 
be as efficient as possible, and the hard work of the 
Government Accountability Office helps us to make that happen. 
Time and again, GAO research has helped us to fulfill our 
oversight responsibilities to see that the American taxpayers' 
dollars are being spent as wisely as possible. So I want to say 
a thank you to the office for compiling this report, and 
especially to you, Mr. Scott, Director of Education, Workforce, 
and Income Security at the GAO. I am again delighted that you 
are here today.
    The report before us today looks to pinpoint overlapping 
responsibility and possible duplication in our Federal 
education and job-training efforts. We are specifically looking 
at education today and the programs that are designed to 
improve teacher quality. In drawing our attention to where 
repetition and fragmentation exists, this report is beneficial.
    I agree with the concept that overlapping and duplicative 
mandates can degrade the quality of the Federal Government's 
response. For example, I know from my own work on food safety, 
that responsibility for keeping our food supply safe and 
uncontaminated is spread across 15 different departments and 
agencies. This is 14 agencies too many, and it is one of the 
main reasons why I have called for a single food agency, 
because duplication in this regard increases costs and 
increases redtape.
    All of that being said, it would seem to me that the real 
question before us today is whether overlapping and duplication 
are one and the same thing. We need to delve deeper into the 
GAO findings, better understand what each of these terms mean 
and how GAO uses them. As the report states, quote, ``Some 
overlap can occur unintentionally, but it is not necessarily 
wasteful.'' In other words, while some of the teacher-quality 
programs may overlap in intent, they may not necessarily do so 
in execution. As such, we need to examine what exactly these 
education programs are intended to do and whether or not they 
are effective at reaching their goals. With such a great 
emphasis placed on teacher quality today and education reform 
efforts, it is imperative that we get this right. I hope this 
is something we can work towards today.
    Also, as the report states, the administration has already 
begun the process of consolidating overlapping programs. For 
example, both the President's 2012 budget and his 
reauthorization proposal of the Elementary and Secondary 
Education Act argue for condensing and consolidating many of 
these programs. I presume these decisions are being made after 
careful study. And although not the purview of this 
subcommittee, I hope we will take advantage of the Secretary 
and his staff's expertise on these matters before making any 
decisions. I would also hope in discussing these potential 
consolidations of programs today that we all share the same 
goal of making the Federal Government's role in education more 
and not less effective.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Mr. Scott.
    Mr. Scott. Mr. Chairman, Ranking Member DeLauro, and 
members of the subcommittee, I am pleased to be here today to 
discuss what is known about fragmentation and overlap among 
teacher quality programs. In 2009, the Federal Government spent 
over $4,000,000,000 to improve teacher quality. Based on our 
recent work, we identified 82 distinct programs designed to 
help improve teacher quality. However, there is no 
governmentwide strategy to minimize potential duplication among 
these programs. We believe that the Congress can take steps to 
help address this issue by considering options such as 
requiring improved evaluations of programs and consolidating 
existing programs.
    Federal efforts to improve teacher quality have led to the 
creation of a variety of programs across the government. 
Specifically, we identified 82 programs administered across 10 
Federal agencies designed to help improve teacher quality 
either as a primary purpose or as an allowable activity. Many 
of these programs share similar goals. For example, 9 of the 82 
programs support improving the quality of teaching in science, 
technology, engineering, and math, and these programs are 
administered across 5 Federal agencies. Further, in fiscal year 
2010, the majority of these programs we identified received 
$50,000,000 or less in funding, and many have their own 
separate administrative structures.
    The increased number of programs has resulted in 
fragmentation that can frustrate efforts to administer programs 
in a comprehensive manner, limit the ability to determine which 
programs are most effective, and ultimately increase costs. For 
example, 8 different education offices administer over 60 other 
Federal programs supporting teacher quality.
    While all the Federal programs we identified support 
teacher quality efforts, several overlap. For example, we found 
that 14 of the programs administered by Education overlapped 
with at least 1 other program in terms of sharing similar 
objectives, serving similar target groups, or funding similar 
activities.
    While a mixture of teacher-quality programs can target 
services to underserved populations and yield innovations, the 
current programs are not structured in a way that enables 
policymakers to identify the most effective practices. 
According to Education officials, it is typically not cost-
effective to allocate the funds necessary to conduct rigorous 
evaluations of small programs. Therefore, many of these 
programs are unlikely to be evaluated. Also, it is more costly 
to administer multiple separate Federal programs because each 
program often has its own policies, applications, and reporting 
requirements.
    As this subcommittee considers spending priorities and 
options to address potential duplication, approaches you can 
consider include enhancing program evaluations, fostering 
coordination across programs that span multiple Federal 
agencies, and consolidating existing programs. Information 
about the effectiveness of programs can help guide policymakers 
in making tough decisions about how to prioritize the use of 
resources and improve the efficiency of existing programs.
    However, in 2009, we reported that while evaluations had 
been conducted for many or some of the teacher quality programs 
we identified, little is known about the extent to which most 
of them are achieving their desired results. Recognizing the 
importance of program evaluations, Education has proposed to 
increase the number of its discretionary programs that use 
evaluations and implement rigorous evaluations of its highest-
priority programs and initiatives.
    In addition to improving program evaluation, Congress can 
foster coordination for programs that cross Federal agencies. 
For example, Congress can establish requirements to ensure that 
Federal agencies are working together on common teacher quality 
goals.
    Finally, Congress may choose to combine programs serving 
similar target groups into a larger program. To the extent that 
overlapping programs can continue, it is important that they be 
better aligned to ensure that they are complementary rather 
than duplicative.
    In conclusion, reducing fragmentation and overlap among 
Federal teacher quality programs is clearly challenging. These 
are difficult issues to address because they may require 
agencies and the Congress to reexamine the structure, funding, 
and performance of a number of programs or activities. In light 
of these challenges, sustained attention and oversight by the 
Congress will be critical.
    This concludes my prepared remarks. I will be joined today 
by Bryon Gordon, Assistant Director with us at GAO. He is one 
of our K-thru-12 education experts. We would be pleased to 
answer any questions you may have at this time. Thank you.
    Mr. Rehberg. Thank you very much.
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    Mr. Rehberg. What areas identified in the report have the 
greatest potential for immediate savings? Of course, I really 
appreciate your report, and it was meaningful. We don't want to 
do damage, obviously, to any of our training programs in any of 
our areas of improvement for our teachers. However, as you know 
and you have summarized pretty well, we have a financial crisis 
looming, whether we want to admit it or not. So we are going to 
have to look at immediate midterm and long-term solutions. Most 
of the long-term solution is going to occur in the authorizing 
committees. As far as immediate savings, are there some areas 
that you can identify?
    Mr. Scott. One of the challenges we faced in doing this 
work, is that it is often difficult to identify particular 
savings resulting from consolidating programs. However, as I 
noted, the Department has put forward a proposal to start to 
consolidate some of these programs--I believe 38 into 
approximately 11. So, from our perspective, at least that 
provides a common ground or a start of a discussion about where 
we can go in terms of potentially consolidating some future 
programs.
    One of the challenges with identifying particular savings 
is that oftentimes administrative costs related to 
administering programs are not readily available in many 
instances. So although there may be some efficiencies gained, 
identifying particular cost savings can be challenging.
    Mr. Rehberg. Of the 38 that are going into 11, your use of 
the $50,000,000 or less was hard to evaluate. Are all of those 
38 that are being recommended being consolidated at $50,000,000 
or less?
    Mr. Gordon. No, they are not. For example, they include the 
Improving Teacher Quality State Grant program, which is a large 
program, nearly $3,000,000,000.
    Mr. Rehberg. Again, there will always be some controversy 
about the private sector, but are there some savings that might 
be able to be foreseen in the short term with better 
coordination with the private sector?
    Mr. Scott. We don't address the issue of better 
coordination with the private sector in our work. One of the 
things we do point out is there can be some opportunities 
across various Federal agencies to improve coordination. GAO 
has done some work that speaks to this idea that to the extent 
you have common performance goals, common performance measures, 
to the extent agencies are coordinating in terms of their 
strategic planning to ensure that the programs across various 
agencies better align, I think there are clearly some 
opportunities to do better in that area.
    Mr. Rehberg. There are only so many areas that we have the 
ability to have oversight. The question always comes about the 
Recovery Act dollars; the cost of applying for the grants. Have 
you done much as far as these grants to make a determination 
how much the grantee is having to spend to apply?
    Mr. Scott. I know that is a question that frequently arises 
across a number of these competitive education grants. We are 
actually doing a couple of studies currently that we are hoping 
to report out this summer that may help address some of those 
questions. We are currently reviewing the Race to the Top 
program, which is a statutory mandate, and we are also 
conducting some work looking at the School Improvement Grants 
for the Senate Appropriations Committee. By the end of this 
year, early next year, we will have some work that might speak 
to this issue of not only the costs related to applying for 
these applications, but also the capacity of State and local 
education agencies to apply for these grants.
    Mr. Rehberg. Are you going to be looking at the rate of 
return for the States on the Race to the Top, or is that 
outside the purview or your evaluation?
    Mr. Scott. The Race to the Top work we are currently doing 
now is an early look at the Department's implementation of the 
program. We have visited a number of States. We will have some 
insights in terms of the State experience. But the primary 
focus of this initial study is looking at the Department of 
Education's early implementation of the program.
    Mr. Rehberg. Beyond the 38 to 11, are you going to be 
making additional recommendations?
    Mr. Scott. Not at this time.
    Mr. Rehberg. So if we were to request a follow-up GAO 
investigation, there would be that opportunity or possibility?
    Mr. Scott. We would be happy to discuss with you future 
work in this area. I would point out, though, that the 
consolidation proposal is by the administration. We did not 
recommend any specific proposal.
    Mr. Rehberg. Great.
    Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman.
    Mr. Scott, I would like to know if you can discuss the 
distinction between administrative duplication and programmatic 
duplication and how such a difference is applicable to your 
findings regarding the teacher quality programs. Does this 
report distinguish between the two? Also, I know I would find 
it useful to go through the definitional difference between the 
terms ``fragmentation,'' ``duplication,'' and ``overlap.''
    Mr. Scott. Thank you, Ms. DeLauro.
    In terms of the framework we use to look at these programs, 
when we use the term ``fragmentation,'' we are talking about 
instances where programs serve the same broad area of national 
need, but are administered across different offices or 
agencies. So that is fragmentation. That is the first step. You 
have a number of programs across a number of agencies or a 
number of offices within the Department. So that is the first 
step.
    The second step concerns overlap, and that is an instance 
where you have multiple agencies or programs that have similar 
goals engage in similar activities or strategies to achieve 
them or target similar target groups. So that is the second 
step.
    Finally, and what we discussed very broadly or generally in 
our report, is that the next step is duplication, where you 
actually have the same programs doing the same thing and the 
benefits being received by the same folks.
    As we point out very carefully in our report, we used the 
phrasing ``potential duplication,'' because in the course of 
our work, we did not actually find duplication of the programs. 
So we are always very careful to phrase it in terms of 
potential duplication.
    Ms. DeLauro. So you found no duplication. Would duplication 
then be indicative? Because when the chairman asked you the 
question about savings and duplication, I just think of an 
example where we have two efforts to put together an engine for 
the Joint Strike Fighter. This is in defense. It was the same 
thing. Now, that I would regard as a duplication. We are 
spending money for the two pieces. So you didn't find 
duplication.
    Mr. Scott. Correct.
    Ms. DeLauro. I heard your answer. It was difficult to gauge 
savings, you said, in terms of looking at this. Were you able 
to identify any cost savings to be achieved through 
consolidation? Where did you find specific examples of 
taxpayers' dollars being wasted that we might address through 
the appropriations process?
    Mr. Scott. In terms of specific waste, we did not look at 
this at a program-by-program level. Our work was focused on 
more generally the potential for, for example, administrative 
savings and efficiencies. If you talk to the folks at the 
Department of Education, they very clearly point out that to 
the extent you have multiple programs even within the 
Department, it does present challenges to them in administering 
those programs. I think that is partly the reason why they are 
putting forth this consolidation proposal, because they 
recognize to the extent you have fewer programs that you have 
to administer, it can also increase your effectiveness in terms 
of administering the fewer programs, as well as help you better 
target, for example, technical assistance to grantees.
    Clearly, there are trade-offs here, but from the 
perspective of the Department, and we certainly concur with 
their thinking, to the extent that you can start to consolidate 
some of these programs, it will better position the Department 
to more effectively administer and oversee the remaining 
programs.
    Ms. DeLauro. Many of the teacher-quality programs, as I 
understand it, cover many different areas. For example, you 
have got teacher preparation, professional development and 
incentives for teachers to work in high-need schools. These are 
diverse programmatic goals. Can you elaborate on how 
consolidating or eliminating some of these programs will still 
allow for these areas to be covered? Or can you elaborate on 
how we can consolidate or eliminate these programs without 
compromising their ability to cover these areas?
    Mr. Gordon. In terms of consolidating and making sure that 
the intent of the underlying programs that are being 
consolidated are kept, I do think the Department in its 
proposal for consolidation goes through and makes the case for 
the programs that are being consolidated how grantees that are 
benefiting from them could access those same types of services 
under these new programs. That is not something that we 
analyzed specifically, but I do think in terms of taking a look 
and making sure there is no unintended consequences of the 
consolidation, that is an area that warrants looking at more 
closely.
    Ms. DeLauro. And is that something you are going to be 
embarking on at someone's request, or do you do that?
    Mr. Scott. We don't have any additional work planned on 
teacher quality, but to the extent there is continuing 
interest, we would be happy to discuss with you further 
potential work you would like us to do.
    Ms. DeLauro. Thank you.
    Mr. Rehberg. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. Just out of 
curiosity, since much of this is really outside of our purview 
as an appropriations committee, has the authorizing committee 
asked you to testify before it on any of this, or have you done 
any reports with the authorizing committee on this?
    Mr. Scott. Thank you, Mr. Simpson.
    Actually, the Comptroller General was before the House 
Education and the Workforce Committee last week, testifying 
both on the teacher quality programs as well as the employment 
and training programs. And one of my colleagues, Andy Sherrill, 
was here last week testifying on those programs. So last week 
the Comptroller General did testify before the House Education 
and the Workforce Committee.
    Mr. Simpson. I hope they take that seriously as they do the 
reauthorization that is coming up. This is an example, and it 
is not just the only one; there are multiple across government. 
I think Ranking Member DeLauro mentioned food-quality programs 
earlier. I am chairman of the Interior Appropriations 
Committee, and it seems like every single agency has specific 
money to do climate-change studies, but there is no overall 
strategy of climate change. And I have thought of consolidating 
all of the climate-change money into a line item that is 
probably overseen by USGC or somebody else like that so we can 
get some coordination between all the different agencies within 
the government in terms of climate change; sort of the same 
thing that Ms. DeLauro is thinking about with food safety. I 
could go on with example of example after example of this type 
of thing.
    The first day I was on this subcommittee or on the 
Appropriations Committee, the first hearing I went to, there 
was an agency that we fund that does grants for small 
businesses to help them--low-interest loans, this kind of 
stuff. And I knew that there were other programs like that, and 
I had never heard of this one. I asked the guy how many 
programs there were that did essentially the same thing. He 
said, I don't really know. Afterwards, a lady came up to me and 
said, I do a conference on these types of programs, and there 
are 43 different programs that do essentially the same thing. 
Each one of them have a little different twist. This one is in 
the agricultural area, this one has minority population focus 
and stuff. I said, why couldn't you consolidate those into a 
program, because it makes it confusing for the constituents out 
there, when they are looking for a loan, where to go? The guy I 
was talking about actually was looking for a loan to start a 
small business and got it from the Department of Agriculture. 
Nobody would have ever thought of going there. You say that 
they are looking at consolidating--out of these 82 distinct 
programs designed to improve teacher quality, consolidating 38 
to 11 in this budget.
    Mr. Scott. Correct.
    Mr. Simpson. That is a start. But in my count, that leaves 
55 that do essentially the same thing. Has anybody talked about 
blowing up the system--and I only mean that in rhetorical 
terms--and saying, the way this grows is every time we 
reauthorize a program, we add a new program, a new provision, 
and usually with some Senator's name attached to it, as a new 
program. Whether it duplicates or not, it is a new program that 
we start.
    I would like to see somebody step back and say, okay, if we 
didn't have a program for teacher quality, none existed, what 
would we do to put one into place that made sense for the 
American people, for education, for our Federal budget? Is 
anybody doing that that you are aware of?
    Mr. Scott. As I mentioned, the Department, to its credit, 
has put forward a proposal to start some consolidations of a 
number of programs. Additionally, one of the things the 
Department has done and is committed to doing is looking to 
obtain funds for additional evaluations of programs. One of the 
consistent messages you will hear from us at GAO is about the 
importance of conducting rigorous evaluations of various 
programs and activities so that we have a better sense of what 
works and what doesn't. To the extent we can conduct those 
evaluations, we may get a better sense, of those programs we 
might want to consider continuing. Likewise, for those that are 
not achieving the desired outcomes. Clearly, that is a topic 
for discussion about to what extent, if at all, do you want to 
continue to fund those kinds of programs.
    In addition to the Department of Education proposal to do 
more rigorous evaluation, we also think it is important for 
agencies across the Federal Government to think more 
strategically and work more collaboratively across the various 
programs. For example, we are currently doing some work looking 
at STEM education. When we reported on this 6 years ago, we 
found that there were over 200 STEM programs across 13 Federal 
agencies, spending about close to $3,000,000,000. Once again, 
to the extent that those Federal agencies can better 
coordinate, at least that will start to address some of the 
challenges in terms of ensuring these programs are working 
effectively and not unnecessarily overlapping or duplicating 
each other.
    Mr. Simpson. One of the real challenges you have, and I 
found it on our side of the aisle, and I am sure it is true on 
the other side of the aisle, is that when someone proposes 
something like this, as the President is proposing, every one 
of these programs builds up its own constituency. It is 
difficult to overcome that, but we have to do that.
    Thank you.
    Mr. Rehberg. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.
    I thank you, Director Scott, for your presentation. I want 
to make it very clear that whether we are Ds or Rs, all of us 
agree on the need to eliminate ineffective or unnecessary 
programs. We have to be good stewards of taxpayer dollars and 
maximize resources. In fact, I remember this was a key 
initiative of Al Gore way back when.
    I am very pleased that you are focusing on this now. There 
are, however, some members of the committee who may truly 
believe that the Federal Government should have a more limited 
role in education, and that Federal programs are duplicative of 
State and local programs. Frankly, I would like to invite 
anyone with that point of view, come to Yonkers. It faces a 
potential 37 percent workforce reduction for next school year. 
That comes on the heels of having to lay off 187 teachers and 
employees before this school year began.
    So I just think we want good programs, effective programs, 
but more than ever our schools do need Federal assistance, 
including teacher quality programs. I guess if there were a 
cookie-cutter approach to teacher quality, for those of us who 
have been working on this issue way back when I was a PTA 
president, we would be doing it. So the large number of teacher 
quality programs is testament to the essential role teachers 
play in education. And we have a responsibility not to waste 
money, but to give the teachers the tools that they need.
    I was very interested in your mentioning 200 STEM programs 
because I do think teacher quality programs should be provided 
and tailored for specific fields. For instance, STEM education 
is so vital to our economic future, we need to do a better job 
providing assistance to teachers in science, technology, math, 
the first two of which are ever-changing.
    Looking at the numbers, 31 percent of public school 
students in fifth through eighth grades are taught math by a 
teacher with a degree or certificate in math. The physical 
sciences, it is only 7 percent. And these are difficult fields 
to master, but we have to focus on how do we help these 
teachers in tough budgets. That is why I am a strong supporter 
of helping teachers in STEM fields. In fact, when it comes to 
Teachers for a Competitive Tomorrow, which helps universities 
establish undergraduate programs leading to bachelor's degrees 
in STEM fields with teacher certification, more than 
$450,000,000 has been authorized just last year. We only 
appropriated $2,000,000. So maybe we have to look at that 
adjustment--$450,000,000 authorized, $2,000,000--when this is a 
key area where we really need help.
    Now, we know we have to reduce, get rid of as best we can, 
unnecessary duplication, but I don't think it is a bad idea to 
have one program for STEM teachers and another for English 
teachers. So my question is, I know that a program with 
duplication is the difficulty. The problem with duplication is 
difficulty comparing programs. Can you tell us, of the 200 STEM 
programs, which ones have been most effective? Are you looking 
at eliminating some, and if so, which ones? And how are you 
making that determination?
    Mr. Scott. The number I cited from STEM programs is from 
work we conducted and issued a report back in 2005. We are 
currently doing some work for Chairman Kline, the House 
Education and the Workforce Committee, where we are attempting 
to look to, first of all, update the numbers in terms of the 
number of STEM programs, the number of agencies, and the amount 
that is being spent on those programs. We are also----
    Mrs. Lowey. Do you know, by the way, of the 200 programs 
about how much is spent cumulatively on them?
    Mr. Scott. I believe, from the report we did in 2005, it 
was about $3,000,000,000. I think most of that was spent by NIH 
and the National Science Foundation. As I said, those numbers 
are dated. As I mentioned, we are in the process of updating 
that report.
    In addition of better understanding the number of programs, 
the number of agencies and dollars spent, we are also looking 
at those programs in the same framework. We are going to try to 
determine to what extent there is the fragmentation, overlap, 
and potential duplication in those programs. Our plan is to 
report out late this year, early next year, on that. We 
anticipate it will be the part of the next round of overlap 
duplication reports that we will be issuing next spring. So 
stay tuned.
    Mrs. Lowey. I look forward to it. The sooner you can get 
that information out--I think you see support on both sides of 
the aisle. And I truly thank you.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Mr. Flake.
    Mr. Flake. Thank you, Mr. Chairman.
    Thank you for your testimony. With all these programs--and 
kind of leading on with what Chairman Simpson was saying--we 
seldom see these consolidations occur unless there is either a 
threat of withholding funds or some kind of cutback; is that 
not right? Is that the case? Or, do we see these actually take 
place, these consolidations, without that hammer?
    Mr. Scott. As I acknowledged before, while we certainly 
haven't specifically evaluated the Department of Education's 
proposal in terms of at least taking a positive step forward, I 
would certainly like to acknowledge the Department for doing 
that. That said, that does leave a broad number of other 
programs across other agencies where those agencies haven't 
taken those steps thus far. And so clearly that is one place to 
start at, in addition to looking at the Department's proposal.
    There can be opportunities for you all to hold other 
agencies accountable for their programs; for example, requiring 
them to, to the extent they fall under the jurisdiction of your 
committee, provide more detailed information in their budget 
justifications about the programs, what is known about the 
effectiveness of those programs. You might also build in some 
requirements, for example, they actually do conduct some 
rigorous evaluations of those programs.
    So clearly for those agencies with teacher quality programs 
within your jurisdiction, there are opportunities for you all 
to directly hold them accountable for the activities they are 
undertaking and see to what extent they are trying to 
coordinate with the Department of Education and other agencies.
    Mr. Flake. Your focus has been on the Department of 
Education here, but have there been other GAO studies on the 
other agencies, and is one agency doing more effective analysis 
and monitoring and some kind of metrics of their results? Are 
any other agencies, to your knowledge, doing it better than the 
Department of Education?
    Mr. Gordon. In terms of program evaluations? Well, in terms 
of program evaluations, we looked at the Department of 
Education, HUD, and HHS in a study that we did last year, and 
actually the Department of Education does have some good 
practices in terms of how it plans for them and carries out its 
program evaluations. We can certainly provide you with some 
more details on what we found in that report.
    Mr. Flake. Do I infer that the others do not?
    Mr. Gordon. For that study what we looked at is we looked 
at agencies that we call the mature agencies in terms of 
program evaluations. We didn't look at other agencies to say in 
terms of what the best practices were. But we did see some 
consistent practices across those agencies in terms of how they 
plan for and carry out their program evaluations. For example, 
with the Department of Education, one thing that they do is 
they tie their planning process into their budgeting process to 
make sure they have the resources to carry out their plans. So 
they do have certainly some good practices at the Department of 
Education.
    Mr. Flake. Thank you.
    Mr. Rehberg. One of the things that we always try and do, 
there is always a clear difference of philosophy of whether the 
Federal Government ought to be involved in education and to 
what extent, and to what extent can we allow the flexibility at 
the local level. Did your report address at all an efficiency 
that could be created by larger block grants and additional 
flexibility for the local level as opposed to the Federal 
Government trying to manage all these independent programs?
    Mr. Gordon. We didn't get into that analysis specifically. 
When we did work on teacher quality programs back in 2009, we 
did survey State agencies of higher ed as well as State 
educational agencies. We did hear from them that they did face 
some challenges in administering these programs and trying to 
coordinate across these programs. So to the extent there was 
any streamlining at the Federal level, that could also benefit 
at the State level.
    Mr. Rehberg. You always worry about--because what you are 
really trying to do is put money in the hands of people that 
are actually going to be able to use it rather than the 
administrative costs and such. Are you looking as part of your 
new evaluation, your consideration of the evaluation of the 
programs, are you going to be looking at the difficulty of a 
grantee moving across programs? Clearly one teacher might be 
able to use additional programs. And it would help us in 
knowing both for the Education Committee, the authorization 
committee, for creating a streamlined process or a block grant 
process, but also understanding the difficulty we are creating 
for the grantees and the money that might be able to not 
necessarily be saved. We don't necessarily always have to be 
cutting money. We can also just take more money from the 
duplication of administration or grant application and apply it 
back to what we are attempting to do.
    Mr. Scott. Clearly, through reauthorization there could be 
some opportunities, for example, to ensure that various 
definitions are more consistent across programs, and, that 
might ease the burden for grantees applying. As I mentioned 
before, hopefully some of the work that we are doing on the 
Race to the Top and the School Improvement Grants will help 
provide some additional insights into some of the challenges 
that grantees face when having to compete, at least in the case 
of Race to the Top and School Improvement Grants, almost 
simultaneously for some of these competitive grants. So 
hopefully later this year we will have more insights on that.
    Mr. Rehberg. Have you moved beyond just the administration 
cost aspect into the economics; the inefficiency of the 
economics of some of the programs? Or is that beyond?
    Mr. Scott. That is beyond the work that we have done to 
date.
    Mr. Rehberg. But you could do it. It is just beyond.
    Mr. Scott. Depends on the scope and how we define what we 
would be looking at.
    Mr. Rehberg. It could become part of your protocol in your 
recommendations for greater evaluation.
    Mr. Scott. Clearly, as I said before, one of the things 
that we will continue to say is that it is important for the 
Federal agencies as part of their--not only for existing 
programs, but to the extent they want to propose new programs 
or initiatives, to ensure that they state very clearly and have 
clear program goals or objectives; clear performance metrics so 
you know whether they have achieved the desired results; and 
have built in, to the extent feasible, a rigorous evaluation of 
those programs so that we can routinely check in to ensure that 
programs are achieving their desired results. Without those 
things it is pretty hard to know at the end of the day what 
works and doesn't.
    So I think it is really incumbent on Federal agencies, 
including the Department of Education, to continue to make 
progress in conducting more rigorous evaluations of existing 
programs and providing better justifications for new programs 
they might want to propose.
    Mr. Rehberg. Thank you.
    Ms. DeLauro.
    Ms. DeLauro. Thank you very much.
    Have you formally evaluated the Department of Education's 
consolidation plan?
    Mr. Scott. No, we have not.
    Ms. DeLauro. I'm referring to the plan that is in the 2011 
and 2012 budget requests. Is it your sense that they are on the 
right track, given what you have talked about in terms of 
consolidation?
    Mr. Scott. As I mentioned, we haven't formally looked at 
it, so I want to be careful here, but from a standpoint of 
having a starting point, I do want to give the Department 
credit for that. At least it is a starting point.
    Ms. DeLauro. You said you have looked at Education, HUD, 
HHS. Have you looked at, or have you been requested to look at, 
the Department of Defense regarding duplication and overlap, et 
cetera? How about the Department of Homeland Security or the 
Department of Agriculture? With Agriculture, you did on the 
food safety piece. But, in other words, in terms of looking at 
fragmentation, overlap, duplication, have you done those 
agencies?
    Mr. Scott. In terms of various teacher quality programs?
    Ms. DeLauro. No, I am talking more broadly in terms of this 
issue of, again, fragmentation, overlap, and duplication of 
programs.
    Mr. Scott. Yes. Actually the large report we issued across 
a range of agencies and programs last month did address those 
various agencies, I believe. We would be happy to make sure you 
get a copy of that.
    Ms. DeLauro. Fine. Thank you.
    A couple of other things. You didn't find duplication among 
the education programs we are discussing here today?
    Mr. Scott. Correct.
    Ms. DeLauro. You didn't find waste, as I understood.
    Mr. Scott. As I mentioned, we were not looking specifically 
for waste.
    Ms. DeLauro. I understand that.
    Mr. Scott. That was not within the scope of what we were 
doing.
    Ms. DeLauro. It is hard to calculate the savings, as you 
said. And the Department is moving in terms of some 
consolidation.
    Now, this is a question that is on my mind. Do we have 
enough trained staff, and do we provide enough in terms of 
appropriations to deal with the Department's program 
evaluation? Is there a level of appropriation that you would 
recommend for program evaluation at the Department for fiscal 
year 2012? Because your point before was in terms of the 
analysis at the agencies. So is there enough trained staff now? 
Should we provide additional resources to train personnel to 
carry out the analysis, and should we move as quickly as we can 
to see how we can impact fiscal year 2012?
    Mr. Gordon. In terms of program evaluations at the 
Department of Education, what we have heard from them is that a 
lot of their funding for those evaluations comes out of the 
authority and the funds under the individual programs, which 
can be challenging for them, particularly with the smaller 
programs, because it doesn't create enough funds. The 
Department has currently embarked on a new process to develop a 
strategic plan for program evaluations, and they said as part 
of that process they will work to identify programs where they 
would need additional funds or where they lack authority to use 
funds for evaluations.
    So to the extent that they have requested that, that would 
be an area that this committee could help with.
    Ms. DeLauro. I appreciate that. Oftentimes, if that kind of 
request comes, there are differences in viewpoint as to whether 
or not that merits an appropriation. But I am asking for a 
professional view, given what you have looked at and what you 
have uncovered here. Are we currently providing sufficient 
appropriations to the Department for program evaluation? Do you 
have any suggestions as to a level that we ought to be looking 
at so that we can use our authority here to create a better 
outcome, if you will, and to avoid duplication and 
fragmentation or overlap?
    Mr. Scott. In terms of level of appropriation for research 
evaluation, I am going to leave it to the Department to speak 
to sort of the adequacy of their evaluation funding.
    Ms. DeLauro. Talk to me about the principle of doing that. 
You are a professional operation, the GAO, and you make 
recommendations. You make recommendations to us that we ought 
to take a look at increasing funding for program evaluation in 
order that these agencies--this agency--might be able to 
perform better.
    Mr. Scott. As we previously mentioned, the Department has 
put forward a proposal. Given the stakes here, I think it is 
appropriate for you all to consider whether the Department 
should receive additional funding for research and evaluation.
    That said, in an age of limited resources, I understand 
that there will be trade-offs here. But given the fact that 
until we know more about what works and what doesn't, it puts 
us in--puts you all in a very tough policy standpoint of 
understanding where to make these difficult choices.
    Ms. DeLauro. Mr. Scott, I am going to take that as a yes.
    Mr. Rehberg. Mr. Kingston, you missed the first round. We 
are in round number two, and you can go next.
    Mr. Kingston. Thank you, Mr. Chairman.
    I wanted to ask you on page 8, your three recommendations, 
about number 3, consolidating existing programs. How much of 
that actually has to be done by Congress versus done within the 
agencies themselves? It would appear to me it would just kind 
of be a good government, commonsense thing, that where you 
could consolidate, particularly the infrastructure, the 
personnel, that it would make sense, without Congress mandating 
it.
    Mr. Scott. To the extent you have specifically authorized 
programs, that will fall to the Congress to come back and 
consolidate those programs. I think, where possible, to the 
extent the various agencies can wring out some more 
administrative consolidations within agencies, clearly that is 
a possibility.
    Mr. Kingston. I don't see, though, on page 10 where you 
list the ones that statutorily have to be--and just scanning 
it--and it might be in there, but if it is not in there, if you 
could provide it for the record on which ones actually would 
need congressional actions and which ones could be done in 
house.
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    Ms. DeLauro. Would the gentleman yield for a second? 
Because I think that is so relevant, what kind of legislative 
action should the Congress undertake in order to address the 
challenges. Let us look at ourselves first.
    I thank the gentleman.
    Mr. Kingston. Thank you.
    And the other question that I had was on recommendation 
number one. And I notice that at the bottom of your page 8, you 
said that the GAO reports there were 151 different Federal K-12 
early childhood education programs, but half of these have not 
been evaluated, including 8 of the 20 largest programs. Why is 
that the case? Why would we have a program that we don't 
evaluate?
    Mr. Scott. The work that we reference there is from a 
report we issued in 2010. That work did not speak to the issues 
of overlapping, fragmentation, or duplication. That work was 
simply an attempt to catalog the number of K-thru-12 and early 
childhood education programs. As we point out, a number of 
those programs, including some of the largest, had not been 
evaluated. That said, however, some of the main programs had 
also undergone some evaluations. Oftentimes it just depends on 
agency priorities and available resources.
    One of the things that we also point out, there are two 
challenges to doing this work. One of the challenges we always 
face in doing this kind of work is even defining exactly what a 
program is. Depending on who you talk to you, the various 
agencies, OMB, you come up with very different ideas what a 
program is, and therefore you end up with very different 
numbers.
    The second point is the extent of evaluations, not all 
programs will rise to the level that you really want to make 
the significant investment to do rigorous evaluations. And 
other times some programs have been longstanding, and yet the 
agencies have not taken any actions to evaluate them.
    So there are just a couple of things going on in terms of 
why there might be some gaps in evaluations.
    Mr. Kingston. Switching back to page 2 or 3, you talked 
about congressional oversight would be very helpful. As a 19-
year veteran up here, I do agree with you we do need more 
oversight. But I also know that there are certain dog-and-pony 
shows that this town enjoys, where you bring people up, you 
have a GAO report, press release, everybody pounds their chest 
for a while, and then it goes away.
    The reason I was late today, I came from a defense hearing. 
As you know, the GAO report identified $70,000,000,000 in waste 
and overruns. We are kind of getting into that a little bit. 
But in the testimony that the Secretary actually said that 
this--he said something, and I don't want to quote him because 
I will misquote him, but he said something like, we always get 
this from the GAO. And you are thinking, well, let's do 
something about it.
    But on the oversight, from your standpoint, what would be 
the effective congressional oversight? Is it the rhetoric, is 
it the action? Because sometimes I just have to question is 
there actually a follow-up action? And this doesn't matter who 
the administration is or who the majority in Congress is.
    Mr. Scott. As we pointed out in that broader duplication 
report, some of these programs, some of these challenges are 
longstanding. I think it is important for the Congress to 
continue, for example, to hold hearings like this to shed light 
and get a better understanding of exactly what is going on. 
Additionally, for programs within your jurisdiction, I think 
there are a couple of things you can do. As I mentioned before, 
you can require the departments to do better coordination. You 
can ask the departments in terms of their budget justifications 
to provide clear information in terms of what is the ultimate 
outcomes of these programs, what sort of performance metrics do 
they have in place, and how will we know at the end of the day 
whether these programs work.
    These are specific questions that you can ask of the 
departments when they come up with their budget justifications. 
I think after that it is continuing to follow up to ensure that 
they are providing the necessary information you have 
requested.
    Mr. Kingston. Thank you.
    Mr. Rehberg. Mr. Simpson.
    Mr. Simpson. When you mentioned that there were 82 distinct 
programs on teacher quality across 10 different Federal 
agencies, what are those 10 Federal agencies? I am trying to 
figure out who the hell is involved in teacher quality.
    Mr. Scott. We are searching for our list here. The 
Department of Education, Department of Defense, Interior, EPA, 
the James Madison Memorial Fellowship Foundation, National 
Endowment for the Humanities, Department of State, Agriculture, 
National Science Foundation, and NASA.
    Mr. Simpson. Wow. I suspect if you look at it, most of 
those are involved because of an authorization by Congress, and 
that it would take legislative action to change those things. 
While they might be able to coordinate different programs 
within an agency, if you are going to coordinate this across 
the Federal Government, it is going to take Congress' 
involvement to address this. And really, should the Department 
of Interior be doing teacher quality improvements versus 
somebody else, or should it be done better by someone else?
    What this reminds me of--not really a question--but what it 
reminds me of is about 26 years ago, I started working on 
school consolidation in Idaho. We have 44 counties, 119 school 
districts. Everybody was really interested in that until it was 
their school district. I found out what their biggest problem 
was not the fact that you could save administrative costs. In 
some counties we have a countywide school system; in others, 
the county I live in, there are five school districts, which 
means you have five administrative costs, five superintendents, 
all of the staff that goes with that, and everything else. What 
parents were really afraid about is the Broncos wouldn't be 
able to play the Panthers. And we were never talking about 
closing schools, we were talking about consolidating 
administration. Today, 27 years later since I first started in 
that endeavor, there are still 44 counties, and there are still 
119 school districts.
    I suspect we are going to have the same difficulty in 
something like this in trying to reorganize it. What we need is 
instead of a plan to consolidate 38 into 11 in the Department 
of Education, we need an overall plan, and that would involve 
more than just one authorizing committee. And somehow I think 
Congress needs to take on some of these challenges. And I don't 
have the answer to it, obviously, or I would be not in 
Congress.
    But I appreciate your testimony. It is a challenge that we 
have not only in teacher quality programs, but in a variety of 
programs that continue to expand, build a constituency, and 
then seem to be there forever.
    Mr. Rehberg. Will the gentleman yield?
    Mr. Simpson. Yes.
    Mr. Rehberg. You are absolutely right. But, unfortunately, 
it is a fundamental program with an unbalanced budget and no 
balanced budget requirement. The State of Montana had the same 
situation. We have a lot more school districts than you have. 
As a matter of economics, eventually some of those school 
district did, in fact, consolidate their administrative 
function. And yes, the biggest fights we had were what were you 
going to change the name of the team to. It actually, while not 
violent, becomes extremely emotional, on the edge of.
    Mr. Simpson. We actually put in our funding formula an 
incentive to consolidate. They got more money if they 
consolidated. Still didn't happen. It is a gut-wrenching idea 
to do that.
    Mr. Rehberg. We went through the same arguments during the 
1980s in Montana and a little bit in the 1990s, in 
telecommunications, fiberoptics, and such; a lot of the 
opportunity for consolidation there. Savings could be had, and 
school districts finally came to the conclusion, but ultimately 
was because the taxpayers got tired of paying for it. Here we 
just don't have that same pressure because we are allowed to 
run trillion-dollar deficits, and it is no big deal.
    Mr. Simpson. Just to add to what you say, I think 
opportunities sometime present themselves when we have budget 
challenges like we have in this, in that it is going to force 
us to look at more effectively delivering these programs. I 
don't think anybody on this committee or anybody that I am 
aware of isn't in favor of teacher quality programs and 
improving teacher quality.
    One of the other problems that really bothers me is that we 
have focused so much on teacher improvement and teacher 
quality. I have never seen a successful school, a really 
successful school, that didn't have a quality principal. And we 
don't focus on that, and we need to focus on it more. Thank 
you.
    Mr. Rehberg. Mr. Flake.
    Mr. Flake. Just a comment following on this. We have had 
the same fights in Arizona. I think every State has had the 
same. It just points out an observation I had before is that I 
don't think this is going to happen, even if the administration 
is calling for it or whatever else, unless there are budget 
cuts and it is forced. Frankly, that is what drives the 
process, as it should. One, we are spending too much in my 
view, the Federal Department of Education, without commensurate 
results. And to the extent that the cuts that have been 
proposed and are being proposed will force consolidation and 
force some realignment and reassessment, that is a good thing, 
because in my experience that is about the only thing that 
actually does force it. Thanks.
    Mr. Rehberg. Ms. DeLauro. I am going to pass.
    Ms. DeLauro. On that point, because I think we did have an 
earlier discussion here that you did not assess effectiveness 
of the programs identified, I think that is an important issue 
here. You did not assess the effectiveness of the report; is 
that correct?
    Mr. Scott. That is correct.
    Ms. DeLauro. We know we have 82 programs. You laid out your 
definitions of fragmentation, of overlap, of duplication. You 
have said you didn't find waste. They were not looking at that. 
You did not find duplication. And you said it was very hard to 
define savings. However, you did say that there is a need for 
an analysis of how one can look at these efforts. And clearly 
effectiveness is a measure. In order to determine whether or 
not a program is effective, one has to have an analysis of the 
effectiveness, and in order to do that, one needs to have 
resources in order to do evaluation. If we do not regard that 
as an important factor, and skimp at this end, we are never 
going to know whether or not what we are funding is working or 
not.
    So I think you can't just say that if you just cut it all, 
then somehow you magically will come to a better system. It is 
about an analysis. It is about training people who understand 
analysis, can carry it out, so it isn't at the whim of one 
person or another of some uninformed judgment. Because analysis 
is a scientific process, and that will be a determinant as to 
whether or not this program works or this program doesn't work, 
and then we can say let us jettison what we don't think works 
and let us focus and put our funds into those that do. So that 
initial piece of analysis is critical, and the resources for 
that piece is critical.
    Let me just ask you, Mr. Scott, in the report you note two 
programs have overlapped in teacher quality because they can 
both be used to attract career changers: Teacher Quality 
Partnership Grants and Transition to Teaching. I am interested 
in these specifically because I think they provide a good 
example of two separate and distinct programs in their mission 
and in the work that they do.
    The Teacher Quality Partnership program, as I understand 
it, is designed to reform university-based teacher preparation 
through rigorous clinical preparation, collaboration with arts 
and sciences, preparing candidates to teach diverse learners, 
and partnerships between universities and high-need local 
education agencies and schools. While the program is open to 
career changers, I don't think that that is the goal or the 
mission of that program.
    Transition to Teaching is a valuable program. It 
concentrates solely on developing roots for career changers to 
become teachers. It is not meant to reform teacher preparation.
    Can you speak a little bit about why GAO decided to 
highlight these programs in a report? How are the programs 
duplicative or wasteful? Is it because both programs are open 
to career changers? It would seem to me that the programs are 
fundamentally different; would you agree?
    Mr. Gordon. I think your example actually illustrates some 
of the challenges to doing these analyses because as we point 
out, many of these programs allow for multiple types of 
activities. So you can have two programs that have multiple 
objectives and allow for multiple activities. So they do 
overlap, as you point out, in this case with career changers. 
So they may not be duplicative of each other, but they may 
overlap in some aspects that they have with each other. So the 
analysis is very complicated to try to tease out the extent to 
which they could duplicate each other.
    Ms. DeLauro. But what would be useful is to understand how 
effective each of these programs is. That would appear to me to 
be the central question, and as far as I can tell from your 
report, we are not in a position right now to answer that 
question. If we truly want to find out what is working or not 
working, then we need program evaluation and resources to carry 
that out so we can say this program is a ``yes'' and this 
program is a ``no.''
    Thank you, Mr. Chair.
    Mr. Rehberg. Getting close to the end. We have two Members 
that have additional questions, and we will call on Mr. 
Kingston first and then Mr. Flake.
    Mr. Kingston. Thank you, Mr. Chairman.
    And I think this is a great report, but I would say, 
though, it is kind of a teaser, because we are halfway across 
the water. I want to get back to my question which Rosa had 
also picked up on is I really would like under the 
consolidation of existing programs your recommendations of 
which ones do need statutory authority to do and which ones 
could be done maybe by report language urging the bureaucracy 
to do it themselves.
    And then I want to go back to page 3 on teacher 
enhancement. Often when I am in a town meeting, I ask people, 
how many of you had a good teacher? And the hands go up. How 
many of you had a bad teacher? Hands go up. Then I say, can you 
give me how you could define the difference? And I notice that 
we do spend a lot of money for assessment tools on evaluation 
of a teacher and how a teacher could be distinguished, a good 
teacher from a bad teacher. Is there anything in the Department 
of Education that tackles that?
    Mr. Gordon. I think I will have to get back to you on that 
one.
    Mr. Kingston. Well, you know, it is very important because 
we have all had good teachers. We have all had bad teachers. We 
want to nourish good teachers. We want to get rid of the bad 
teachers, and the system wants to get the bad ones out. So I 
think it is something that it would be good to have a useful 
tool to know.
    One question I would have, internationally, we see these 
tests that American students are falling behind on math scores. 
Have we ever looked at, well, how much of that is a teachers 
issue? Do we look at a Japanese math teacher versus an American 
math teacher or the way that they are teaching math in these 
countries that they are outscoring us so much?
    Mr. Scott. Yes. I am not aware of any GAO work that has 
looked at that issue. We would be happy to go back, and to the 
extent we have some prior GAO work on that, we would be happy 
to send it to you, but I am not aware of any.
    Mr. Kingston. Okay. Also, in Georgia we passed in 1985 QB--
Quality Basic Education Act, and you know, it had some good and 
bad. It had a career ladder for teachers, and that was the one 
part, once the bill was passed, that people fought against, the 
teacher groups did. But one result of that is continuing 
educations and master's degrees by teachers.
    Have you ever evaluated the value added in a kindergarten 
teacher having a master's degree versus a kindergarten teacher 
that doesn't have a master's degree? Because as you know, once 
they get the master's degree, you get locked into a 5- to 
$10,000 salary difference, and if a teacher is going to be 
there for 20 years teaching kindergarten, you are locked into 
that limit.
    Mr. Gordon. We have not assessed the specific impact of 
credentials on student achievement ourselves.
    Mr. Kingston. Well, would you venture to give an opinion 
that advanced degrees don't necessarily give a better product?
    Mr. Scott. Actually we haven't done any work on that. So, 
no, I would not venture an opinion on that.
    Mr. Kingston. But since States--and mostly States, but I 
think there is a Federal hook to it, too--are encouraged for 
their teachers to get graduate degrees, that is costing 
millions and millions of extra dollars in payroll. And it might 
be a waste of money; that somebody might just be a great 
teacher without all the fancy diplomas on the wall, and 
somebody with diplomas on the wall still might be a lousy 
teacher. And in terms of evaluating what is a good versus a bad 
teacher, it would appear that is in that mix, because, right 
now salary remuneration indicates if you have got a graduate 
degree, you are a better teacher, and we ought to be paying you 
more.
    Mr. Scott. As Bryan mentioned, we haven't done any work on 
that issue, but we will go back and take a look at to see what 
Education may have done on that.
    Mr. Kingston. Well, thank you very much.
    Mr. Rehberg. Sorry, Mr. Flake. Mr. Simpson jumped in ahead 
of you.
    Mr. Simpson. I just wanted to comment on the prior question 
on what Jack was just talking about and a short story to 
demonstrate the problem.
    One day a friend of mine that I graduated from high school 
with--this was 5 or 6 years ago--we were out playing golf 
together, and we were talking. We were talking about our high 
school education, you know, the old days, the good old days. 
And I mentioned who I think was my best teacher. Everybody 
hated to take her class because she was tough, but in 
retrospect, I think she taught me more than any other teacher I 
had. And I asked Lynn, I said, what did you think about so-and-
so? He said, I think she was the worst teacher I ever had. I 
said, who do you think was your best teacher? And when he 
mentioned it, I looked at him and said, you have got to be 
kidding; I would have put that down as my worst teacher.
    When you are measuring teacher quality, it is tough, 
because different teachers connect with students differently. 
And the same thing that works for this high-quality teacher 
here may need to be somebody else for another group of 
students. So we need to be careful when we are just saying, you 
know, trying to measure teacher quality, that is a tough goal.
    Mr. Rehberg. Mr. Flake.
    Mr. Flake. Just, again, the gentle lady from Connecticut 
mentioned that we have got to analyze these programs 
scientifically and otherwise. The trouble I have there as 
well--and I am not saying we shouldn't--but it seems that every 
time we are presented with the analysis, we reject it and then 
say, we just need to spend more money. And Exhibit 1 is Head 
Start.
    The last best information we have on Head Start is that any 
benefits gained are gone by the time the child exits first 
grade. We heard that at the last hearing. Now, there are 
studies that are under way again, but the last evidence we have 
is that. And now another program is the DARE program. We heard 
evidence a few years ago, a GAO study saying that the DARE 
program was not effective. I believe it was GAO. And I knew you 
wouldn't----
    Mr. Rehberg. I knew this would happen. I knew it.
    Mr. Flake. But the DARE program, again, no effectiveness. 
What did we do? We ramped up funding, I think, 20 percent.
    On our side of the aisle, a lot of conservatives push for 
abstinence education. The last evidence we had there, it wasn't 
working there either; yet still we move ahead and plow ahead.
    So it seems that nothing will lead to budget cuts unless we 
are just in a budget crunch, and that is my difficulty with, 
oh, let us do some more analyses. The analysis always comes 
back that, well, maybe if we spend a little more, we would get 
a different result, and so we never seem to get the costs under 
control. So I yield to the gentle lady to refute my claim.
    Mr. Rehberg. Ms. DeLauro.
    Ms. DeLauro. I would just say about Head Start--and I thank 
the gentleman. I know the gentleman brought up this study in 
another hearing but the fact of the matter is that there are 
many, many studies on Head Start, and there are many recent 
studies. I spent time a week ago in my district with the 
founder of Head Start, Dr. Edward Zigler, who would be the 
first person to say that Head Start programs that do not work 
should be shut down, and he has recommended such. In fact, he 
has a new book out talking about evaluating Head Start 
programs.
    But Head Start programs were designed to address a 
combination of efforts and goals. They include academic 
development, the socialization of children, and the engagement 
of parents in the education of their children. Head Start 
attacks all of those things and more. There are myriad studies 
out there about what Head Start does and how Head Start is 
effective. Head Start kids are less likely to be at odds with 
law enforcement. They are healthier children. They are better 
educated children. The studies are there.
    I want to reflect what has been said about the teachers. 
You can do all of the quality training of teachers that you 
care to do. That may be effective or ineffective. The fact of 
the matter is that we must also address the issues that we have 
in our communities and the environment where some of our kids 
are growing up today. Most low-performing schools are in high-
poverty areas of this country. If you don't take a look at the 
school itself and the principal, training for teachers to deal 
with the problems that youngsters do bring to school, whether 
it is health or nutrition or other areas, then we are not going 
to succeed. You can have the best teachers in the world, but if 
they are not equipped to work with children who are coming to 
schools with the deficits that they have, then we are not going 
to succeed.
    And that begins with early childhood education wherein you 
try to make up some of that deficit, both academically and 
socially, in order that children can build on their experiences 
and be able to perform well and to be able to succeed.
    I will provide you with all of the studies, and I will tell 
you that we know today. We have so many studies that tell us 
that when children learn, it is from zero to three, zero to 
five, and the kind of education you can provide and the quality 
of that education that you provide in those years sets the tone 
for their future. We don't need more studies in that area. We 
have them. We ought to heed them.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Thank you.
    Mr. Simpson, I couldn't agree with you more. I am actually 
reading a book right now by John Maxwell called Everyone 
Communicates; Few Connect, and I am going to give it to my 
daughter who is student teaching right now because it talks a 
lot about education and how some teachers connect and some 
teachers don't. Some teachers talk over the head, and they just 
want to impress their colleagues and be evaluated well. Others 
really do care about trying to make a connection with the kid.
    And I have often said many times that everyone comes to 
education in a little different way. I joke about it with 
myself just to make the point about I was involved in music and 
sports, and that is what kept me in school. But frankly, it is 
one of the things that did keep me in school, and we 
participated together in a fraternal banquet last night. Again, 
that is one of the things that kept me in college is joining a 
social organization that kind of made studying cool as opposed 
to what it was.
    So it is very difficult to evaluate teachers. That is why 
merit pay sometimes can be--you are not going to get a chance 
to talk, Jack.
    Mr. Kingston. If the gentleman will yield.
    Mr. Rehberg. I have to admit----
    Mr. Kingston. I just want to know what fraternity made 
studying cool. For the record, we have to know. You all were a 
fun date.
    Ms. DeLauro. I never belonged to a fraternity.
    Mr. Rehberg. Well, the sororities were there last night as 
well. There were about 3- or 400 of us at the banquet last 
night. When I spoke, I picked on Mr. Kingston a lot. So that is 
why I am not going to allow him an opportunity to get in front 
of the mike.
    So, just to close as well, as far as evaluations come and 
go, GAO has done some yeoman's work on Head Start, and one of 
the things you did identify within your GAO report--and I don't 
know if you did it, Mr. Scott--was the level of fraud that 
exists in Head Start with people that are signing up that are 
over the qualification income level and fraudulently signing 
kids up that don't even exist in some of these community 
programs, to the extent that it has been estimated that at 
least $500,000,000 is being spent in fraudulent Head Start 
programs.
    And so if we are not going to take your advice, how many 
more studies do we need you doing, or how many more 
evaluations, because that is one of the things or changes we 
tried to effect in this subcommittee. We won't just willy-nilly 
try and cut programs just for the good of cutting the program, 
we are trying to effect savings.
    So I want to thank you for identifying within the GAO 
organization some of the fraudulent actions that occur within 
Head Start. And, again, I am a fan. It is a big deal in 
Montana. We like it. But if we are not going to then seriously 
consider your studies, how many more evaluations need to be 
done--because if we even enter into, as Mr. Simpson said, an 
arena that has a built-in advocacy, all you are doing is 
inviting criticism without ever effecting change.
    So thank you for your study. We look forward to working a 
lot with you over the years.
    Ms. DeLauro. Mr. Chairman, I would just like to make one 
point if I can, because I think wherever fraud exists and abuse 
exists, it ought to be rooted out. We ought to be pretty even-
handed about that. I told you--and you know that I serve on the 
Agriculture Committee--we have been paying people who have been 
dead for years in agriculture subsidies, I think. Am I right, 
Mr. Flake?
    So I think we ought to be even-handed about rooting out 
that waste, fraud, and abuse in whatever program we have and 
whatever agency we have, and do so governmentwide. I think it 
would be a useful, useful effort.
    Thank you, Mr. Chairman.
    Mr. Rehberg. Thank you very much. Meeting is adjourned.
                                          Thursday, April 14, 2011.

                   UNITED STATES DEPARTMENT OF LABOR

                               WITNESSES

DAVID MICHAELS, ASSISTANT SECRETARY OF LABOR, OCCUPATIONAL SAFETY AND 
    HEALTH
JOSEPH A. MAIN, ASSISTANT SECRETARY OF LABOR, MINE SAFETY AND HEALTH

                       Introduction of Witnesses

    Mr. Rehberg. Welcome. Nice to have you. I appreciate you 
coming out today. Normally I do not give an opening statement, 
and I am going to turn it over to Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman. I wanted to 
say a thank you to our witnesses this morning, and I am 
delighted you are here and am anxious to hear your testimony.
    We are here today to discuss the budgets of two vitally 
important Federal agencies, the Occupational Safety and Health 
Administration, OSHA, and the Mine Safety Health Association, 
MSHA. As it happens, this year marks the 40th anniversary of 
the Occupational Safety and Health Act.
    Over those four decades, tremendous progress has been made 
in the realm of workplace safety. To note only a few examples, 
OSHA standards on cotton dust have virtually eliminated new 
cases of brown lung disease and its lead standard has 
dramatically reduced occupational lead poisoning.
    Most importantly, the number of workplace fatalities has 
been cut by more than half. It is estimated that 410,000 lives 
have been saved by the Act. If anything, it is clear that we 
need to continue to strengthen our workplace safety efforts. In 
2009, more than 4,000 workers were killed by injuries on the 
job, an estimated 50,000 to 60,000 people died of occupational 
diseases and there were more than 4 million work-related 
injuries or illnesses.
    If we have any doubt about the importance of workplace 
safety, let us recall some of the tragedies we witnessed last 
year. The disaster at the Upper Big Branch mine which killed 29 
coal miners; the explosion at the Tesoro refinery in Washington 
State which killed seven workers; the explosion and fire on the 
BP Transocean oil rig in the Gulf which claimed 11 workers' 
lives and did still untold damage to the environment and our 
economy.
    My district was also touched by tragedy. In February 2010, 
six workers were killed due to an explosion at the Kleen Energy 
Plant in Middletown, Connecticut. Along with the Chemical 
Safety Board and the panel convened by the Governor, OSHA has 
been instrumental in helping us figure out exactly what went 
wrong so it will not happen again.
    So, what these agencies do is tremendously important to 
protecting the health and the lives of American workers, and it 
is important for business as well. A robust OSHA and MSHA allow 
for a level playing field for small businesses and save 
companies money.
    As is mentioned in your testimony this morning, according 
to Liberty Mutual Insurance, work-related injuries and 
illnesses cost companies between $155 billion and $232 billion 
a year in direct costs, lost productivity and work retraining, 
and that is why 95 percent of business executives believe 
investing in workplace safety has a positive impact on 
financial performance, with 61 percent arguing a $3 return on 
every $1 investment in workplace safety.
    Yet during the previous administration, we saw years of 
slow growth in OSHA's budget that did not keep up with costs 
and the size of OSHA's staff dropped to the lowest level in the 
agency's history. The development of several important 
standards was stopped and enforcement was weakened.
    In the last couple of years, Congress was able to turn 
around this declining trend in resources. With increased 
funding provided in 2009 and 2010, the OSHA workforce has been 
rebuilt back to 2001 levels. We have leadership at these 
agencies firmly committed to the mission of protecting workers 
on the job. Enforcement has been stepped up against those who 
violate the law willfully and repeatedly.
    Unfortunately, the new majority has put these improvements 
at risk. H.R. 1, passed by the majority in February, would have 
cut OSHA's budget by almost $100 million, forcing the agency to 
lay off something like one-fifth of its inspection staff and 
greatly reducing support for State compliance efforts. In 
addition, more legislation has been proposed that would 
hamstring the development of new standards and rules needed to 
address serious workplace hazards.
    Fortunately, the appropriations legislation that the House 
takes up later today does not include any cuts to either OSHA 
or MSHA. In fact, we were able to secure a small increase for 
MSHA to help reduce the serious backlog of mine safety 
citations awaiting adjudication. However, I remain very 
concerned about the adequacy of the resources for both of these 
agencies and hope we will continue to keep in mind their 
importance as Congress works on future budgets.
    This is not big government or intrusive government. 
Spending Federal resources to ensure worker safety is not a 
frivolous expense. It is a necessity. No one wants to see any 
more lives lost or ruined by readily preventible injuries in 
the workplace, and we should all be able to agree that we 
should do everything in our power to protect our workers.
    I look forward to the testimony of our two witnesses, and 
thank you, Mr. Chairman.
    Mr. Rehberg. Thank you.
    Dr. Michaels.

      Assistant Secretary of Labor, Occupational Safety and Health

    Mr. Michaels. Chairman Rehberg, Ranking Member DeLauro, 
thank you for the invitation to testify about the fiscal year 
2012 budget request for OSHA. As Secretary Solis said in her 
testimony last month, winning the future requires a successful 
competitive market where all firms are playing by the rules to 
keep workers safe. Protecting workers is the right thing to do, 
and it also makes economic sense. Workplace injuries, illnesses 
and fatalities takes an enormous toll on this Nation's economy, 
a toll that we can ill afford.
    This year marks the 40th anniversary of the establishment 
of OSHA, and I think that by any measure this agency has been 
one of the true successes of government. Forty years ago, most 
American workers did not have the legal right to a safe 
workplace. Since that time, workplace fatalities and reported 
injury rates have decreased by more than 60 percent, but far 
too many preventable injuries and fatalities continue to occur.
    Today, an average of 12 workers are killed on the job every 
day and tens of thousands more are estimated to die every year 
from work-related diseases. More than 3 million private sector 
workers are seriously injured each year. Far too many of these 
injuries permanently impact the worker's income and destroy 
their family's middle-class security. The President's request 
includes an expansion of the compliance safety and health 
officer workforce to continue OSHA's commitment to preventing 
injuries, illnesses and fatalities.

                       OSHA'S ENFORCEMENT PROGRAM

    OSHA's enforcement program targets the most dangerous 
workplaces and the most recalcitrant employers. We recognize 
that most employers want to keep their employees safe and they 
make great efforts to protect them workplace hazards. But there 
are still far too many employers in high-hazard industries that 
cut corners on safety. For them, OSHA enforcement is clearly 
the best means to ensure the safety of their employees. Strong 
enforcement and meaningful penalties for those who don't follow 
the rules levels the playing field for those employers who are 
doing the right thing.
    OSHA is a small agency, so we rely heavily on workers to 
help identify hazards and work with their employers to control 
them. To protect those workers from possible retaliation, 
section 11(c) of the OSHA Act seeks to protect employees from 
discrimination when they report hazards or exercise other 
rights. Since the Act was passed, Congress has added 20 
additional whistleblower laws to OSHA's enforcement 
responsibility, protecting employees who report violations of 
trucking, airline, nuclear power, pipeline, environmental, 
rail, mass transit, consumer product safety and securities 
laws.
    The fiscal year 2012 budget request includes additional 
resources to help reduce the backlog in whistleblower claims 
and expedite the handling of complaints.

                      DEVELOPING OSHA REGULATIONS

    One of the primary responsibilities Congress has given to 
OSHA is to issue commonsense standards to protect workers. 
Developing OSHA regulations is a complex process that involves 
sophisticated risk assessments as well as detailed economic and 
technological feasibility analyses in order to ensure that our 
regulations protect workers and make sense for businesses. This 
process also includes multiple points where the agency receives 
extensive comments from large and small employers, professional 
organizations, trade associations, workers and labor 
representatives.
    The request includes funds to ensure that OSHA is able to 
continue its efforts in this area, as well as for the 
development of a injury and illness prevention program rule. 
Under this standard, employers would develop a program to 
address hazards in a systematic proactive way. This approach 
has been modeled by OSHA's voluntary protection program members 
and will also be based on the experiences of 15 States that 
have similar requirements.
    Finally, we know that the majority of employers want to do 
the right thing, but many just need more information and 
assistance. OSHA's active and growing compliance assistance 
program works to ensure that employers and employees understand 
workplace hazards and how to prevent them.
    For example, OSHA's on site consultation program provides 
free evaluations and advice to small businesses. Last year the 
program conducted over 30,000 visits to small businesses. These 
programs are run by States and receive 90 percent of their 
funding from OSHA. The budget request includes a $1 million 
increase for these activities.
    The fiscal year 2012 budget request reflects one of the 
country's major priorities, ensuring that the Nation's working 
men and women are welcomed home safely from work to their 
families. Secretary Solis and I are fully committed to a simple 
goal, good jobs for everyone, and no job can be a good job 
unless it is a safe job. We can accomplish this goal while 
being good stewards of the public's money.
    Mr. Chairman, thank you for inviting me today.
    Mr. Rehberg. Thank you.
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          Assistant Secretary of Labor, Mine Safety and Health

    Mr. Rehberg. Mr. Main.
    Mr. Main. Thank you, Chairman Rehberg, Congresslady DeLauro 
and members of the subcommittee. I appreciate the opportunity 
to be here today to discuss the President's request for the 
Mine Safety Health Administration's budget for fiscal year 
2012.
    First, I would like to report on MSHA's action since the 
April 5, 2010, explosion at the Upper Big Branch mine that 
tragically took the lives of 29 miners. We have made 
significant progress in MSHA's investigation of the Upper Big 
Branch explosion and most of the costs of the Upper Big Branch 
investigation have been supported by funds provided in the 2010 
supplemental, which remain available through this July.
    The underground investigation, which has been extensive, is 
nearing completion. Based on the evidence we have gathered so 
far, it appears that a low volume of methane and/or methane 
from natural gas provided the fuel for the initial ignition on 
or near the face of the tailgate side of the long wall shearer 
or cutting machine. Small methane ignitions are not uncommon in 
coal mines, but when proper safety measures are followed, these 
ignitions are generally controlled and extinguished.
    Our preliminary analysis shows, however, that at Upper Big 
Branch this small ignition was not contained or quickly 
extinguished. Instead, a small methane ignition transitioned 
into a massive explosion fueled by an accumulation of coal dust 
that propagated the blast. While the investigation is not yet 
complete, we know already that explosions in mines are 
preventable and that a workplace culture which puts health and 
safety first will save lives and prevent tragedy.
    I have deep respect for those who choose mining as a 
career. That is where I started my career as well. Mining is 
critically important to our economy and I believe that a 
commitment to safety is fully compatible with a thriving 
industry. In fact, we not only owe it to our miners, but also 
to those mine operators who play by the rules to do what we can 
to encourage all operators to live up to their obligations to 
provide a safe and healthful workplace.

                    FY 2012 BUDGET REQUEST FOR MSHA

    The budget request for MSHA for fiscal year 2012 is $384.3 
million. These funds will allow us to ensure that we continue 
to use all the tools at our disposal to effectively enforce the 
Mine Act and the MINER Act.
    After the explosion at Upper Big Branch, we needed to 
rethink how we approached mine safety and health. That took on 
new urgency, I think, for all of us. Our fiscal year 2012 
budget priorities reflect this urgency.
    For example, the President's budget request allows MSHA to 
meet its responsibilities to conduct complete and annual 
inspections of each mine and target the most egregious and 
persistent violators using MSHA's most aggressive enforcement 
measures, such as the impact inspection, the pattern of 
violations program and injunctive actions.
    Our impact inspections have proven to be one of our most 
effective enforcement tools and our ability to continue them is 
essential. We have conducted these impact inspections at times 
during off hours, taking hold of phone lines to prevent advance 
notice and covering key parts of the mine quickly before 
hazards could be hidden or covered up.
    The Upper Big Branch disaster also focused attention on the 
need to address the backlog of contested mine enforcement cases 
at the Federal Mine Safety and Health Review Commission. Delays 
in swift resolution of contested mine cases undermine MSHA's 
enforcement tools and put miners' lives at risk. The 2010 
supplemental has allowed the Commission, the Solicitor of Labor 
and MSHA to begin to reduce the case backlog. The 2012 budget 
requests an additional $18.3 million to continue the 
administration's backlog reduction efforts.
    The fiscal year 2012 budget also proposes $5.5 million for 
our regulatory program, an increase of $2.1 million from fiscal 
year 2010. The standards we are planning on moving forward are 
critical to implementing what we have learned from the Upper 
Big Branch disaster and to protecting the mine safety and 
health of our Nation's miners.
    One particularly important regulatory initiative is our 
effort to improve the broken pattern of violations program. We 
adopted new screening criteria and used those criteria to put 
14 mines on a potential pattern of violation. Some of these 
mines have successfully reduced their violations and some have 
not. MSHA has also published a proposed pattern of violation 
rule which would address laws in the current rule to meet the 
intent of the statute.

                    END BLACK LUNG ACT NOW INITIATIVE

    Another major regulatory effort is our work on dust 
initiatives. We will move forward on our End Black Lung Act Now 
initiative, which is designed to fulfill the promise made 40 
years ago by Congress to eradicate black lung disease. 
Thousands of miners have died from black lung and miners are 
still getting the disease, including younger miners.
    We are also reducing the risk of explosions in coal mines 
by moving forward our emergency temporary standard on rock 
dust. Our fiscal year 2012 budget includes two important dust 
initiatives, which will allow us to improve how we handle 
analyses of both respirable dust and rock dust.
    MSHA has taken a number of other actions as well to ramp up 
our efforts. This includes a proposed rule that would revise 
requirements for operator examinations of underground coal 
mines, as well as the issuance of a number of targeted 
compliance guidelines.
    I believe that many mine operators want to find and fix 
hazards in their mines themselves before they cause accidents 
or injuries. In order to assist mine operators, MSHA has 
undertaken extraordinary education and outreach efforts. That 
is why the President's fiscal year 2012 budget seeks $36.3 
million for education policy development activities.
    I have traveled the country----
    Mr. Rehberg. Sir, we will allow you the opportunity to have 
your testimony submitted for the record, if you could summarize 
very quickly, please.
    Mr. Main. I have traveled the country speaking to miners, 
mine operators, mining organizations and associations and 
listening to their ideas and concerns. We are working together 
to improve consistency in enforcement of the mining standards 
as well as to implement new compliance programs and initiatives 
to improve mine safety and health.
    I look forward to working with the committee so MSHA has 
the resources it needs to accomplish our shared goal of 
protecting our Nation's miners and assuring that they return 
home every day from work safe, and free of injury and illness.
    Thank you very much.
    Mr. Rehberg. Thank you very much.
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                               MINER ACT

    Mr. Rehberg. I will point out to you gentleman that the 
lack of attendance is not a lack of interest. We have quite a 
few subcommittee chairmen that serve on this committee, so from 
time to time they are in their own hearings. But we are honored 
to have our full committee chairman here, Mr. Hal Rogers, and I 
would like to turn it over to you for any statement.
    Mr. Rogers. Thank you, Mr. Chairman.
    Welcome to both you, Mr. Main and Mr. Michaels. Thank you 
for being with us today and giving us your testimony.
    As you know, the mining industry has proved a staple both 
for our Nation's energy supply and for our economy, and I 
witnessed generations of miners carry on this proud tradition 
in my region of Appalachian Kentucky.
    As you mentioned, we have recently commemorated the one 
year anniversary of the tragedy at West Virginia's Upper Big 
Branch mine. We policymakers and regulators have a special 
obligation to the 29 men who lost their lives on that fateful 
day, to their brethren who continue to make a living by 
traveling deep into those mines, and to their loved ones at 
home, to remain ever vigilant in ensuring that safety remains 
paramount and always in the forefront of our mines.
    That is why I was proud to support the comprehensive mine 
safety MINER Act in 2006. Notably, that Act strengthens the 
Federal Government's ability to enforce safety regulations, 
holding accountable operators with chronic and persistent 
health and safety violations.

                    BACKLOG OF MINE SAFETY CITATIONS

    I am pleased that MSHA's fiscal 2012 budget request 
includes increased funds to reduce the backlog of mine safety 
citations currently pending before the Mine Safety and Health 
Review Commission. The number of MSHA inspectors has increased 
exponentially in the last decade and has resulted in a 
commensurate increase in safety, but also an increase in the 
number of citations perceived as ``inconsistent'' or 
``arbitrary.''
    A startling IG report recently indicated more than a 
quarter of inspectors considered themselves deficient in 
technical training that is necessary to perform the duties that 
they were assigned.
    As you noted, Mr. Main, this backlog of nearly 20,000 cases 
has created an unacceptable delay in adjudicating appeals, 
which are vitally important to ensuring that safety standards 
are enforced and enforced uniformly across the 14,000 mines 
under MSHA's purview. Any step to reduce that backlog is a step 
in the right direction.
    All of that said, my colleagues and I have all expressed 
frequent flabbergastion at wrong-headed policies by this 
administration that would drive these mining jobs out of our 
economy when we need them most. Greenhouse gas emissions, 
surface mining guidance, coal ash regulation, taken together, 
this administration is poised to regulate all of these miners 
right out of their jobs.
    I look forward to discussing one of these proposed 
regulations with you today related to respirable coal mining 
dust. Significant concerns have risen about the data being 
utilized to develop this proposal and the availability of 
technology that would be needed to adhere to any new 
regulations.
    Thank you.

                     BACKLOG OF SERIOUS VIOLATIONS

    Mr. Rehberg. Thank you, Mr. Chairman.
    One of the interesting points that has been brought up, you 
mentioned it in your statement, was the serious backlog of 
violations, and I think we are all concerned about the serious 
backlog. We are also concerned about the serious violations. 
The problem is the backlog of serious violations is not 
necessarily creating the problem.
    I have gone through and spent a little time asking some of 
the mines around the country, some of the associations, some of 
the businesses around the country, and a couple of the ones 
that were sent to me, here is a violation for there were no 
single service drinking cups provided at the potable water 
cooler in the shop building.
    One of my mines in Montana, the violation was written 
because the toe spacing between ladder rungs was 2\3/4\ inches 
instead of 3 inches. The ladder had been there for years and 
was never previously cited by MSHA on other inspections. That 
becomes a citation.
    A citation was written because the mine failed to contact 
MSHA within 15 minutes of a storage facility catching fire, 
which would have been perhaps a danger. However, the facility 
was not owned by the mine or its parent company and was located 
30 miles from the mine housed on a railcar full of ore that 
originated from the mine and was en route to be refined. 
Therefore, MSHA considered it to be mine property, again, 30 
miles away owned in a building by someone else and subject to 
the requirements of contacting the agency after the accident.
    So, I don't think any of us would ever criticize OSHA or 
MSHA for any citation of a violation of a health safety issue. 
The problem is, you create problems for yourself when you are 
creating citations that become part of a backlog where the 
serious violations cannot be adequately considered.

                       EMPLOYEE SAFETY COMMITTEE

    One of my frustrations as I am talking to one of my 
facilities in Montana is they had an employee safety committee 
that was working very well with the old administration and 
moving along to try and have a safe workplace, and then when 
the new administration took over, it was canceled. There was no 
longer a connection between the agency that was enforcing the 
regulations and the law and the community that wants to work in 
the healthy workplace.

                         VOLUNTARY INSPECTIONS

    So I guess my question is, do you have a process in place 
for voluntary inspections? If they want to invite OSHA or MSHA 
to come in and voluntarily cite issues, or not cite issues, I 
hate to use that word, but identify potential problems, where 
they don't then end up on the list for coming back and then 
ultimately giving them a citation, because they are trying to 
do the right thing. And if you ever want to get together with 
some of the employees, I am not talking about the owners of the 
company, I am talking about the employees themselves who want 
to work in a safe environment, and they are as angry at you, 
MSHA, as they are oftentimes at their own management.
    Mr. Main. Yes, let me--there are probably about three or 
four issues in there. On the consistency issue, it is something 
we have been working hard on. The day I took this job, I 
realized half my inspectors had, as far as on-the-job 
inspection experience, about 2 years, and I have launched a 
number of projects to improve consistency. One of those was a 
training program for mine supervisors, which we are in the 
process of running all of our field supervisors through on how 
to manage the inspection process.
    But I have traveled throughout the country, met with 
several mining associations, aggregate associations, to 
actually talk through some of the complexities, because we 
are----
    Mr. Rehberg. Do you have a free inspection process?
    Mr. Main. Do we have a free inspection process?
    Mr. Rehberg. Yes, inviting them in, voluntary?
    Mr. Main. The Mine Act we are currently under was created 
in 1977 and it has a very straightforward requirement that when 
MSHA goes to the mine, the inspectors are obligated to cite 
what they see. That has been in the----
    Mr. Rehberg. So they can't just invite you in, voluntarily 
invite you in. But if you see something, then you are going to 
ding them. So what is the incentive to invite them in?
    Let me ask you, Dr. Michaels. I am going to run out of 
time.

                      SMALL BUSINESS CONSULTATION

    Mr. Michaels. We recognize the problem. In fact, we have a 
small business consultation program which we fund 90 percent 
of, but is run by States, so it is absolutely independent of 
OSHA. In fact, Montana, the Montana Department of Labor and 
Industry does that. They go to employers, and we like this 
program because it is before an OSHA inspector gets there. It 
is an OSHA inspector-type person who goes through and says here 
are the hazards, here is what you have to do. It is absolutely 
free to small businesses.
    In our budget request, we asked for a $1 million increase 
in that program. We think it is a very important program. It is 
unfortunately in some danger. In some States even 10 percent is 
difficult for them to match.
    Mr. Rehberg. As a courtesy, I always follow very closely 
the time on every witness and all of my colleagues, just so we 
can get as many rounds in as possible. I will probably come 
back to some of that and let you fully answer the question. But 
I really watch the time very carefully, just as a courtesy to 
my colleagues.
    Ms. DeLauro.

                       EFFECTS OF H.R. 1 ON OSHA

    Ms. DeLauro. Dr. Michaels, H.R. 1, the 2011 appropriations 
bill passed by the House in February would have cut OSHA's 
budget almost $100 million, about 18 percent below last year's 
level. Fortunately, the final bill that will be taken up later 
today does not include any cut to OSHA. Nevertheless, I would 
like to inquire about the effects of H.R. 1 in the event that 
cuts of this magnitude are proposed for fiscal 2012.
    So let me ask what impact would these cuts have on OSHA's 
ability to protect the safety and health of American workers. 
As well, if you could then quickly address this, one of the 
programs that would have been cut by H.R. 1 is the support for 
State occupational safety and health enforcement. What is the 
role of these State programs, what support is provided to 
States from the OSHA budget, and how important is that 
assistance to the States?
    Mr. Michaels. If H.R. 1 or the equivalent were to be 
passed, it would have a dramatic effect on OSHA's ability to 
protect workers across America. You know, OSHA and its State 
partners have about 2,200 inspectors to cover almost 8 million 
workplaces and 130 million workers. This program would cut 400 
OSHA employees, and 200 of those would be inspectors. In 
addition, another 155 inspectors would be eliminated from State 
plans.
    So it would quite a dramatic effect. We wouldn't be able to 
train our inspectors nearly as well. We would lose our ability 
to protect whistleblowers, who raise issues not just in OSHA, 
but around safe transit, safe commercial nuclear power 
reactors.
    We spend a major amount of our time working on emergency 
preparedness. OSHA in the Gulf, we had 35 to 40 people full-
time down there helping protect the workers, the 60,000 workers 
involved in the cleanup. It would be a big piece of our 
emergency budget. I could go on, but there are a lot of very 
big impacts.
    Ms. DeLauro. Quite frankly, what I would like to do and you 
can get this to us, I really do want to know what the 
implications are. I think it is important for us to get out 
what those implications are. We, some could say, dodged a 
bullet here, but I think we may be re-upping here for 2012.
    Mr. Michaels. I will provide them.
    Ms. DeLauro. Thank you very much.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2340B.166
    
    [GRAPHIC] [TIFF OMITTED] T2340B.167
    
                         PATTERN OF VIOLATIONS

    Mr. Main, the law gives MSHA certain additional enforcement 
powers when it finds that there has been a pattern of violation 
at the mine. I understand that MSHA has been trying to make 
better use of this authority in order to more effectively deal 
with some of the worst safety problems in the mining industry.
    Would you describe the pattern of violations process for 
us, the change you have been making and why you believe this 
authority is important? What have been the results of your 
efforts so far?
    Mr. Main. I think the short message is that Congress 
enacted a law in 1977 establishing a pattern of violations. 
This was after the Scotia mine disaster in Kentucky in 1976. 
They intended for the agency to go after mine operators more 
forcefully that had chronic----
    Ms. DeLauro. Repeat offenders.
    Mr. Main. Repeat offenders. So after the statute was 
enacted, there was an expectation that the agency responsible 
would enact regulations and prevent the action. Unfortunately, 
in the 33 year history, I think I have that right, but it is 
pretty close to 33 years, no mine had ever been placed on the 
pattern of violation as intended by Congress.
    Ms. DeLauro. In 33 years?
    Mr. Main. Thirty-three years. And right after I became 
Assistant Secretary, we began to look at the pattern process 
and had to deal with the backlog as well, because there is a 
fear we had that some mine operators may be contesting 
violations to avoid the potential pattern of violations process 
that was in place.
    We took a look at that, particularly after the Upper Big 
Branch disaster, and that became a very important issue, and we 
decided to make some substantive changes in the current 
administrative process. We looked hard at mines that would be 
selected, put in stiffer requirements for mine operators to get 
off, and really made mine operators who had trouble create mine 
management programs to clean up their act.
    We sent notice to 14 mine operators late last fall that 
they were on the new potential pattern violations, and thus 
far, eight mines have improved their compliance and two have 
not, and they have been placed on the actual pattern.
    Ms. DeLauro. I don't know if you have anything to say, but 
my time is going to run out and I wanted you to get that in, 
because it would appear to me after 33 years, we finally have a 
process in place because there are repeat offenders, is that 
correct?
    Mr. Main. There are repeat offenders, and it is a pretty 
stiff law that Congress created, and there was an expectation 
that we as an agency employ that.
    Ms. DeLauro. I don't know, Mr. Chairman. I think I have 8 
seconds here. If you have anything to say in 8 seconds, Mr. 
Main, go for it.
    Mr. Rehberg. Or two or one.
    Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman. And, by the way, 
congratulations on your elevation to this great chair.
    Mr. Rehberg. Yeah. Thank you.

                           PROPOSED DUST RULE

    Mr. Rogers. Mr. Main, on the proposed dust rule, tell me 
when the criteria document that you are relying upon from the 
Secretary of Labor advisory committee, when was that data first 
published?
    Mr. Main. The criteria document issued by NIOSH was in 
1995.
    Mr. Rogers. And is that the information that you are 
relying upon to propose the rule?
    Mr. Main. There are actually two documents or two different 
results that were provided that we have relied on. One was the 
1995 criteria document, and the second is a 1996 Federal 
Advisory Committee Report that was a committee comprised of 
labor, industry, academia, the government that developed 
recommendations for eradicating this disease.
    Mr. Rogers. Is it common practice for Federal agencies to 
rely on 15-year old documents when promulgating regulations in 
this highly technical field?
    Mr. Main. Well, there is current relevancy with the 
findings and recommendations made by those two reports. We are 
trying to deal with a disease that has been plaguing coal 
miners since we have been mining coal. Thousands of miners have 
died of this disease. The cost, I think, since the black lung 
provisions took place in the Mine Act----
    Mr. Rogers. Well, the question is, why did you rely upon 
15-year-old information? Surely there is more recent 
information about this problem. I have read it myself.
    Mr. Main. The disease is still with us. Miners are still 
getting the disease. We are finding younger miners showing----
    Mr. Rogers. You are telling me things that you can read in 
the daily newspaper. Why did you rely on 15-year-old 
information? Is there not newer information available about the 
impact of black lung in the mines, of dust in the mines?
    Mr. Main. Well, the information that was developed is still 
relevant today.
    Mr. Rogers. But there have been changes in the industry and 
in the technology since that time.
    [The information follows:]

        The National Institute of Occupational Safety and Health

    The National Institute of Occupational Safety and Health (NIOSH) 
just posted the final version of their Current Intelligence Bulletin 
64: Coal mine dust exposure and associated health outcomes, a review of 
information published since 1995. http://www.cdc.goviniosh/docs/2011-
172/
    In it (p. 11) NIOSH notes reports in 2006 and 2007 that ``called 
attention to advanced pneumoconiosis in working underground miners'' 
where ``most of the affected miners had started work after 1969 yet had 
still developed severe CWP.'' Following those reports NIOSH performed 
additional field studies that showed that ``the prevalence of CWP 
appeared to have stopped declining around 1995-1999, and has risen 
since then.'' They also note, ``of particular concern are the 
prevalence values for the last three five year periods (1995-2009) for 
miners with <25 years tenure, which are well above those observed in 
the early 1990s.'' These findings are discussed in greater detail with 
specific reference to scientific studies in the NIOSH publication.
    The NIOSH findings were supported by presentations by miners and 
health care providers at the MSHA public ``End Black Lung--Act Now'' 
meetings. In addition, at a rulemaking hearing in Kentucky on the MSHA 
proposed rule to limit miners' exposure to coal mine dust, a witness 
who identified herself as an attorney with 27 years of experience 
responding on behalf of coal mine employers against claims for benefits 
under the federal black lung benefits program noted the upsurge of 
cases of advanced disease. She indicated that this is a relatively 
recent phenomenon and emphasized that theproblem is widespread and has 
been noted by lawyers from 12-15 states with whom she meets annually.

                   CONTINUING DUST MONITORING DEVICE

    Mr. Main. Well, yes. I think on the technology side there 
was the development of a device which was just recently 
approved that is part of the rule making. It is a continuous 
dust monitoring device that through a partnership with 
industry, labor, the government, over, I think, about a decade 
period of time, has been developed, that is going to provide 
for the first time, real-time sampling capabilities.
    Mr. Rogers. There are all sorts of new machinery and 
testing equipment and sensors, masks, all sorts--and helmets, 
all sorts of new equipment, new information. And it puzzles me 
that you went all the way back to 1995 before all of these 
things developed to write your regulation. Shouldn't we update 
that information before you write the regulation that would 
require things that may be outdated by now?
    Mr. Main. Well, I think that in previous administrations 
that have dealt with this unsuccessfully to finalize a rule, I 
believe that they looked at some of the same data that we have.
    Mr. Rogers. Well, regardless of that, why don't we do the 
right thing?
    Mr. Main. Well, we have asked the public, the stakeholders, 
the mining industry, to provide us information. We have had, I 
think, seven public hearings. The record is still open. We have 
asked for comments from the entire mining community to provide 
us information and guidance about the development of the rule.
    Mr. Rogers. Well, West Virginia University just this past 
week released a report. Have you read that one?
    Mr. Main. I haven't seen that report, Mr. Chairman, but if 
it is something that someone would think is of value, the 
record is still open. It could be submitted to the public 
record for the rulemaking process.
    Mr. Rogers. I am puzzled why you don't use the latest 
information about trying to battle this horrible disease with 
the latest information and latest gizmos that could protect the 
miners.
    Mr. Main. But I think in terms of the gizmos, I think there 
is a use of new technology. It is a technology that has been 
developed, like I say, over the past decade or so that was 
supported by, as far as the testing and development, industry, 
labor and the government. There was a rule that was put into 
effect last year that approved a device for use, and it takes a 
long time----

                  IMPLEMENTATION OF PROPOSED DUST RULE

    Mr. Rogers. Would you be willing to delay the 
implementation of this rule until we could get the latest 
information available to back it up?
    Mr. Main. I think this rule has been in the development 
stage, and unfortunately unfinished, since 2000, and miners are 
still getting the disease, and we believe that it is in the 
best interests of the Nation's miners to move forward with a 
rule. In saying that, we have welcomed all comments, all 
information that will help us develop the right rule at the end 
of the day.
    Mr. Rehberg. Mr. Chairman, I do want to thank you for 
allowing me the opportunity to be the chairman of this 
committee. I went in with eyes wide open. You warned me it was 
going to be fairly interesting, and you were right. It has been 
fairly interesting.
    Ms. Roybal-Allard.

              OSHA'S SAFETY AND HEALTH STATISTICS FUNDING

    Ms. Roybal-Allard. Mr. Michaels, while OSHA enforcement and 
oversight has made some great progress in improving worker 
safety, each year we still have 4,400 workers killed and 
millions are injured on the job. That is one reason that I was 
glad that the President's request includes a modest increase to 
OSHA funding to help protect the health and safety of American 
workers. But what has been the impact on workplace safety since 
OSHA funding has been restored to its pre-2001 levels?
    Also, as a second part, can you elaborate on OSHA's safety 
and health statistics funding and why the Department of Labor 
believes it is important to workers and their employers?
    Mr. Michaels. You know, one of the surprising things in 
H.R. 1 was eliminating our statistics budget. Our statistics 
budget includes our ability to track not just injuries, and it 
should be noted that the Bureau of Labor Statistics actually 
produces all the statistics that we use publicly, but our 
computer system is based on our statistics, our ability to 
figure out have we been to employers before, what did we find 
there. We give employers a reduction if we find that they don't 
have a history of OSHA violations in any citation we have. So 
our ability to do that is all affected by our statistics 
budget, and that, of course, was eliminated in H.R. 1.
    We believe that OSHA is having a great impact. I could give 
you statistics or perhaps a more powerful story. Just a few 
weeks ago, we have an inspector named Rick Burns in eastern 
Ohio got a call about a construction trench being dug and 
thought there were workers in there unprotected. We have known 
for many, many years, in fact, the Phoenicians knew how to 
protect workers from trench excavations. You build the top 
wider than the bottom.
    Unfortunately, if you are in a hurry, you can build it deep 
but put a box in there to protect workers. Unfortunately, that 
isn't often done and we lose workers every week to trench cave-
ins all across the country.
    So we got a call about a trench excavation, and Rick Burns 
got there and saw a worker in a deep trench and said, you 
better get out of there. And he got out of there immediately, 
and 5 minutes later that trench collapsed and that worker would 
have been seriously injured or probably killed if that man 
hadn't been there.
    Now that is just an example. But we think OSHA has a very 
big impact and we were pleased that we were able to continue 
its full funding in the President's budget.
    Ms. Roybal-Allard. I was trying to get two questions in at 
the same time here with the time I had. I want to go back a 
little bit on the safety and health statistics funding and if 
you could elaborate just a little bit more on why that is such 
a valuable tool both to workers and employers?

                        SITE SPECIFIC TARGETING

    Mr. Michaels. One of the things--well, I am sorry, there 
are a number of things. We require and we have since the 
beginning of OSHA required employers to keep track of injuries 
and illnesses. We actually don't get that information. That is 
employers who have to keep those reports, and not all employers 
do. Certain small employers don't have to, non-hazard employers 
don't have to. But employers are supposed to keep track of 
their injuries and illnesses so they have an understanding of 
what is going on in their workplace.
    Right now we receive only a small portion of those under a 
special program called site specific targeting where in certain 
industries we ask them to send us their statistics or actually 
just the bottom line, how many injuries they have and how many 
workers they have, and we do some targeting on that basis.
    But most statistics are really kept by employers for them 
to know what is going on so they can assess their hazards and 
fix them, and our ability to examine those and work with them 
really would be very much cut by the elimination of our 
statistics budget.
    Ms. Roybal-Allard. Well, some believe that OSHA regulations 
impose an unfair burden on business. It is my understanding 
that studies show OSHA enforcement has little negative economic 
impact on business and in fact helps to level the playing field 
for the majority of businesses that care about their workers' 
safety and follow the rules.
    Has OSHA found evidence of regulation and enforcement 
causing detrimental effects on small business? And in keeping 
with your mission, what steps has the Department of Labor taken 
to work with small businesses to minimize any regulatory 
burden?

                  OSHA & SMALL BUSINESS ADMINISTRATION

    Mr. Michaels. Well, that is also a very long question. I 
don't have much time to answer it. But to the second part, we 
work extensively with small businesses. We have the program I 
talked about, the consultation program that did more than 
30,000 visits last year with small businesses.
    When we put together regulations, we have tremendous 
outreach to small businesses. For significant regulation we 
have a whole process with the Small Business Administration's 
advocacy office. But also for any new regulation we invite 
comment and we meet with small businesses and many others.
    I can get you the other information about what we do with 
small business.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2340B.168
    
    [GRAPHIC] [TIFF OMITTED] T2340B.169
    
    Mr. Rehberg. Thank you very much.
    Mr. Alexander.
    Mr. Alexander. Thank you. Good morning.
    The Secretary was before the committee a few weeks ago and 
talked about the fiscal year 2012 budget and she said that OSHA 
is focused on ways to carry out its mission more efficiently, 
moving toward electronic reporting of data, upgrading computer 
infrastructure to replace an inefficient and antiquated data 
system, enabling staff to conduct online meetings rather than 
traveling across the country and, where possible, replacing 
printed publications with online publications.
    The question is, do you expect to save money with that 
process, and, if so, will it be reflected in your next budget 
request?
    Mr. Michaels. You know, I can't say we will save money. I 
think a lot of what we do we will do much more efficiently. 
Certainly it will save travel money, things like that, by 
having on-line methods. But this in some ways refers back to 
Ms. Roybal-Allard's question, because one of the components of 
our statistics budget is our web-based program to reach small 
businesses. We put all of our compliance materials on the web 
and now we know that most people can get access to information 
on the web. We had 180 million unique visitors last year 
pulling down our information. And we have got to do more of 
that, we have got to do it better, we have to have more 
interactive tools, because we can't get to all of the employers 
in the country. So that is really where we are going with that.

          OSHA'S INTENSIFIED COMMITMENT TO PREVENTING INJURIES

    Mr. Alexander. The President's request includes an increase 
of $7.7 million to continue OSHA's intensified commitment to 
preventing injuries, illnesses and fatalities by deterring 
employers in the most hazardous workplace who exhibit a 
profound disregard for workers' safety and health.
    So you are asking for $7.7 million, as it says, to 
continue. So what are we going to do with that?
    Mr. Michaels. That will go to a small number--it will go to 
FTEs, but better training for our inspectors. We also need--our 
cases actually require costs. The Kleen energy explosion on 
Super Bowl Sunday 2 years ago, which everyone is aware of, that 
involved a fine of over $16 million, several different 
employers who were blowing natural gas in large quantities to 
clean out some pipes while people were welding and they had 
propane burners on. We issued a large fine, the third largest 
fine in OSHA history if you combine those three companies. We 
are now in court and it has cost us already half a million 
dollars in expert costs and court related costs.
    So for us to continue our work and to go after the most 
recalcitrant employers, the ones who really put workers at 
risk, who kill workers, that is where that money is going to 
go.
    Mr. Alexander. It says the extra money will be used to 
ensure that the inspectors are properly qualified. Does that 
mean they are unqualified today?
    Mr. Michaels. No, but it is always important to update 
inspectors with the new gizmos, with the new information. So we 
have ongoing training, and training costs money. We have to fly 
inspectors in to our training facility, which is outside 
Chicago, for a week or two for each course. That means we have 
got to cover their activities. That is one of the costs. We 
can't allow our inspectors to fall behind the technology. We 
recognize that. So we really have to keep training them. 
Certainly employers want that. Employers want inspectors who 
really understand what is going on.
    Mr. Rehberg. Mr. Flake.
    Mr. Flake. No questions.
    Mr. Rehberg. Mrs. Lummis.

                       MSHA'S 2012 BUDGET REQUEST

    Mrs. Lummis. Thank you, Mr. Chairman.
    I note that MSHA already spends more than $1,600 per miner 
in the U.S., and OSHA spends $6 for every worker. That is a 
significant difference, and the President's fiscal year 2012 
budget requests a 10 percent increase in MSHA's budget.
    Given our fiscal situation, Mr. Main, can you explain to me 
how you will direct those resources?
    Mr. Main. Yes. I think as a starting point it is fair to 
say that there have been urgings from Congress, from the 
public, from miners and some of the mining community for us to 
do a better job. That is particularly in light of the Upper Big 
Branch tragedy. What we are trying to do is focus our energies 
and resources in ways that bring about safer mines in this 
country.
    One of the things we plan to do is to issue a new 
regulation on the pattern of violations to add additional 
reforms to make the law work better. One of the things we plan 
to do is beef up our emergency response capabilities.
    Just a little story. While I was at the----

            CRITERIA FOR DETERMINING PATTERNS OF VIOLATIONS

    Mrs. Lummis. You know, I wish I had time, but I have only 
got 5 minutes. So let me ask you about your pattern of 
violation proposed rule. I am concerned that rather than being 
based on final determinations by the review commission, that 
the rule will make patterns of violation determinations based 
on citations.
    I have received examples from my constituents of citations 
that have been overturned. As many as 20 percent of the more 
serious citations called significant and substantial are 
knocked down to something less than that by MSHA's own review 
commission. So is it really fair to use in your rule citations 
as the criteria for determining patterns of violations rather 
than the review commission's determinations?
    Mr. Main. If we wait for the review commission to make 
determinations, we may have a mine that is sitting there unsafe 
today. It takes us years to get to an action using those that 
you discussed. As a matter of fact, I just saw a number of 
citations cross my desk here not too long ago that was issued 
in, I think, 2006.

                         MSHA REVIEW COMMISSION

    Mrs. Lummis. So it sounds like we should be beefing up the 
review commission's budget so they can reduce their backlog 
rather than basing these repeat violations on citations that 
have been turned over.
    I have an example of a crane being written up as if it were 
a piece of self-propelled mobile equipment, so the inspector 
refused to acknowledge MSHA's own definition of mobile 
equipment and the citation was disputed and eventually vacated, 
but at a significant cost to the operator. So my question I 
think is valid.
    Mr. Main. I don't know the specific citation you are 
talking about. I know when MSHA inspectors go out to the mines 
every day, their responsibility is if they see a violation to 
cite it. That is their obligation under the law.
    Mrs. Lummis. Let me ask it this way then. Should we be 
doing more to reward exemplary performance and raise the 
profile of best practices so we encourage wider adoption by 
industry?
    Mr. Main. We are working hard to establish best practices 
throughout this industry and we are working with associations 
to do that, the National Sandstone and Gravel Association for 
one. We have put together a number of compliance assistance 
tools to help the mining industry.
    Mrs. Lummis. So have you been working with the mines 
themselves, employers that have stellar safety records, to see 
what they are doing that makes them better performers?
    Mr. Main. Yes. We actually--one of the first things I did 
in my administration was to establish a process where we 
would--actually I was looking to see if we needed to do any 
regulatory action as well. But to look at the safety and health 
programs that were in effect in the mining industry, get mines 
and companies that had some of the best ones, and to provide 
that information to the rest of the mining industry. We had 
several employers in the coal industry and outside the coal 
industry participate in these public meetings, and that 
information is out there to be shared with the entire mining 
community. We are also doing far more than that.
    Mrs. Lummis. Thanks. Another question back on the pattern 
of violations. The tracking tool was a welcome innovation, and 
I understand that happened on your watch, so I think that is 
terrific. How can operators be assured that it is up-to-date 
and reliable?
    Mr. Main. That is a good question and I think a fair 
question. I will tell you this: It is my belief that we need to 
provide the information. The mining industry needs to know what 
the laws are and what the process is for our enforcement 
actions. That web tool, it is going to be updated by the 15th 
of the month for the previous month and we are working hard to 
keep that data very current.
    Mrs. Lummis. So it is going to have a 30-day real time----
    Mr. Main. Fifteen days. It should be real time.
    Mrs. Lummis. Fifteen days.
    Thank you, Mr. Chairman.
    Mr. Rehberg. We will start round two.

                           INSPECTOR TRAINING

    Mr. Main, I understand in March the inspector general came 
out with an audit and it suggested that, at least I think, if I 
am correct, a number, a quarter of the inspectors considered 
themselves to have a lack of training.
    First of all, I always appreciate a revisitation of H.R. 1. 
However, it is no longer valid. But the reason for H.R. 1 in 
many of the decisions we are going to have to make in this 
subcommittee and the full committee and the House and this 
Congress is the fact that the debt has doubled in the last 4 
years, things like a failed stimulus and some of the other 
things, the excess of spending that occurred that did not meet 
our revenues. So, unfortunately, H.R. 1 is a reflection of 
something we are all going to have to deal with. You are as 
well within your agencies.
    What ought to bite you a bit is the fact that I think that 
$70 billion went to the Department of Labor, let's forget that 
figure for a minute, within the failed stimulus, but let's talk 
about the $5 billion in employee training that went to the 
Department of Labor.
    If there is all of this untrained workforce out there, as 
Chairman Rogers has mentioned and other members of the 
committee have mentioned, a problem with the quality of 
inspectors, the lack of education or training of the 
inspectors, and $5 billion went to the Department of Labor for 
employee training, how much went to mine safety, how much went 
to OSHA as far as employee training? Isn't that the purpose?
    I clearly understand employment training for those that 
don't have jobs. But if you are inspecting jobs that have 
employees that are currently working, and we don't want to lose 
them as employees, we want to keep them working, but one of the 
problems is the companies are being cited by unqualified, 
untrained inspectors, wouldn't it have made sense to have some 
of that money go to something that might have maintained a job?
    Mr. Main. We do our own training in-house within the budget 
that we have with regard to the dollars that are spent.
    Mr. Rehberg. So you didn't get any of the $5 billion for 
employment training?
    Mr. Main. I am not sure exactly what you are talking about, 
but if it is separate funding outside of our agency, we use our 
own money within our agency, and we are using a lot of new 
training tools.
    Maybe to take everyone back a bit, there was discussion 
about more inspectors being added. The agency, because of an 
aged workforce, had a lot of retirements and there was, I 
think, a failure to staff up the agency. And right before I 
came on board, Congress had acted to beef up the new rules. So 
a lot of the inspectors that we were dealing with are 
inexperienced.
    All of the inspectors go through anywhere from 18 months to 
a 24-month training program to----

                   RECRUITING IN THE MINING INDUSTRY

    Mr. Rehberg. Let me ask you about some of the inspectors 
then. What percentage or how many of the inspectors within Mine 
Health and Safety actually are inspecting mines that they 
worked at? Because that is one of the complaints I received 
from some of the groups I have talked to.
    Mr. Main. We recruit from the mining industry. We try to 
recruit in the mining industry and bring people in that have 
experience. As we all know, we hire who comes to----
    Mr. Rehberg. Wouldn't you assume that sometimes there is a 
disgruntled worker that has left the mine for one reason or 
another and they end up being an inspector and they go back in 
and they start finding burnt out light bulbs and toe rungs that 
are of the wrong size and fires 30 miles away that are 
buildings owned by somebody else?
    Mr. Main. If we are talking about the same one, I just want 
to add some context, because it was the one at, I believe, the 
Troy Mine in Montana. The ladder, and we went back and checked 
this, the ladder was a homemade ladder. And I have worked on 
mobile equipment and I have a vision what this is. Whenever the 
worker stepped on it, it swung up underneath the loader itself, 
which is not a good thing to have.
    I think the fire was a situation where MSHA had been 
inspecting a facility and that fire was not reported. We went 
back, the equipment completely burned up, as I understand it, 
in that case. And after the company did provide information 
that that was not under the jurisdiction----
    Mr. Rehberg. Let me real quickly just give you one of the 
other citations, a failure to maintain a list of contractors 
which when the list was subsequently produced for the inspector 
within the required reasonable time of 12 minutes, they were 
still cited.
    Mr. Main. Okay. I have to check into that one. If you send 
it to us, we will take a look at it.
    Mr. Rehberg. I would be happy to do it.
    [The information follows:]

                            MSHA Inspectors

    Most mine inspectors were employed in the mining industry prior to 
working at MSHA. Inspectors are not assigned to particular mines; 
inspectors are rotated among mines. In smaller field offices, 
inspectors may inspect particular mines more frequently. MSHA does not 
track the number of times mine inspectors are assigned to inspect a 
mine where they previously worked. Department of Labor (DOL) ethics 
rules prohibit a DOL employee from participating in matters involving a 
former employer for a minimum one year period. MSHA goes beyond that 
requirement and prohibits inspectors from inspecting or conducting 
other MSHA-related work at a mine where they were previously employed 
for a minimum of two years.

    Mr. Rehberg. Dr. Michaels, in 12 seconds.
    Mr. Michaels. Well, just to add, the funding that went to 
the Department for training went to the Employment Training 
Administration, a whole separate budget than either MSHA or 
OSHA. So we didn't see any of that.
    Mr. Rehberg. But it could have.
    Mr. Michaels. I don't know if it could have. It didn't.
    Mr. Rehberg. Ms. DeLauro.

                      CITATIONS VERSUS FINAL AUDIT

    Ms. DeLauro. Thank you, Mr. Chairman. Just a couple of 
things to deal with the record.
    I think on the issue of citations versus final audit, I 
think the issue is about a balance. Should miners die while 
waiting for litigation to be concluded at mines which are 
chronic violators? I think that is an important point to make 
in terms of how we proceed procedurally.
    I was taken in your testimony, Mr. Main, that you said 
black lung is preventable, but you also talked about the 
increasing incidences, the new cases of black lung in young 
miners, et cetera. At some point it would be useful to have 
that information about that rise, I would like to see that, and 
the age grouping of these folks.
    But that gets me to the issue, and I just want to make this 
comment, about your standards and your rulemaking in which you 
are trying to deal with the dust issue. I think you said it 
very, very clearly that the record is still open. The record is 
open. No one is closing their eyes to new information, new 
technology, et cetera. Let's get it in, let's review it, let's 
look at it.
    But also let me make this point. After ten years, 11 years, 
it is time to have a rule. If we wait that long, once again, 
which is why I mentioned the other piece on citations versus 
final orders, people die in the interim. That is not acceptable 
to do that.
    So you move with the best information that you have. You 
keep updating it. Your new rule will allow you to do that. I 
think it is incredible to note that in 10 years with regard to 
OSHA, there have just been two new rules with regard to health 
and safety. What is at risk here is not roads, bridges or parks 
that we are talking about in this committee or with the work 
you do, it is people's lives, and the prolonged litigation, the 
delay, has put people at risk. That is our responsibility--to 
break that backlog so that in fact we can make sure that people 
are safe on the job. That is our responsibility.

                           PENALTY STRUCTURE

    Dr. Michaels, 2010, average Federal OSHA penalty for 
serious violation, $1,000, below maximum allowed by law for 
that category of violation. Fatality cases, median initial 
total penalty, $7,000. You are supposed to reflect the gravity 
of the violation, deter it for the future. Do you think that 
penalty of $7,000 for a worker death appropriately reflects the 
gravity of the violation? Do you think it is sufficient to 
deter future violations? You have done some things to change 
enforcement initiatives under your leadership. Severe violators 
enforcement program. Can you describe the policies, how they 
seem to be working?
    Mr. Michaels. Yes. Congresswoman DeLauro, I think the 
penalty structure of it, Congress gave us, is lacking in 
certain things. The maximum penalty for a serious violation is 
$7,000.
    We give penalties not because a worker died, but because of 
the hazard. So we could go into a situation, a workplace, where 
there is a fatality, but if there was no clear violation of the 
standard or clear hazard, we don't give any penalty at all.
    But when we do give a penalty, we try to do it in a way 
that deters other employers, because we can't get to every work 
site. So we find, for example, that a $7,000 penalty many 
employers look at that as the cost of doing business. Certainly 
a large employer, $7,000, that is nothing, so even if we have 
multiple citations.
    We had a citation against BP for $80 million following the 
Texas City explosion. Actually it was a follow-up to the Texas 
explosion citation, because BP didn't do what they agreed to 
do. And even $80 million we thought probably had no impact on 
them in terms of an incentive to actually abate the hazards.
    So we have a number of new policies. We have made some 
changes in the way we issue penalties, which I think will have 
a bigger impact and it will give us a slightly higher penalty 
for the more serious violations, but it is still way below 
$7,000 per citation.

                  SEVERE VIOLATORS ENFORCEMENT PROGRAM

    In addition, we have a new program called SVPS, Severe 
Violators Enforcement Program. When we find a really 
significant problem in a facility, we will go back and visit it 
more often to make sure that problem was eliminated and we will 
go to other facilities in the same system.
    For example, we went to a facility, U.S. Minerals, which 
was located next to a coal-fired power plant which took the 
slag and turned it into roofing materials and other things, and 
workers there, this was outside and the exposure was to what we 
called nuisance dust and they were still getting black lung. So 
not only did we issue a citation there, but we went to the 
other facilities where they do the same and found the same 
problem.
    So we think it is having an impact. We are trying to use 
some creativity to have that impact.
    Ms. DeLauro. If I can, I would like to have a list of those 
that are repeat offenders and violators. You should have that 
data. I would like to see that list.
    Mr. Michaels. Certainly.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2340B.170
    
    [GRAPHIC] [TIFF OMITTED] T2340B.171
    
    [GRAPHIC] [TIFF OMITTED] T2340B.172
    
    [GRAPHIC] [TIFF OMITTED] T2340B.173
    
    Mr. Rehberg. Mr. Flake.

                           NO BACKLOG IN OSHA

    Mr. Flake. Thank you, Mr. Chairman.
    You have talked a lot about the backlog and the need to get 
through the backlog here. I look at some of the other money 
spent by OSHA here, the 2010 Susan Harwood targeted topic grant 
recipients. This program handed out a lot of money for programs 
that to me I think probably have questionable worth compared to 
the need to get through the backlog of these cases.
    Money, $198,000 to the Texas Engineering Extension Service, 
work zone safety. This stuff has been done I would think a lot 
before. You got roofers and waterproofers, research and 
education, joint trust for green jobs industry standards. 
Apparently these green jobs, green roofing has different 
hazards I guess than some other roofing.
    I just would question in a time of budget austerity that 
maybe we have authorized that program, maybe we force you to 
spend money on it, but we need to know the direction, if you 
think the backlog is more important than this or this is more 
important than the backlog?
    Mr. Michaels. Well, I think the main issue here is a 
misunderstanding, sir, in that the backlog is in MSHA and this 
is OSHA. We do very separate things, so there is no backlog.
    Mr. Flake. OSHA, you have no backlog?
    Mr. Michaels. No.

                          SUSAN HARWOOD GRANTS

    Mr. Flake. And this can't be transferred. The 
Appropriations Committee can certainly take into account that 
you have extra money here and we can move it elsewhere.
    Mr. Michaels. No, but the point of the Harwood grants is 
compliance assistance. We far prefer employers and workers to 
know how to work safely and do that work before an OSHA 
inspector gets there or before someone is killed.
    The purpose of these training grants, and we give it to 
employer groups, we give it to worker groups, we give it to 
community groups who can reach out to workers we can't reach, 
is to tell them about certain hazards and how to work safely. 
That is the purpose of them, so we don't have to go out and 
give citations. So we think they are quite effective. But the 
issue of--it is really unconnected to any backlog. This is 
apples and grapes.
    Mr. Flake. All right. Well, to us, we can move money and 
block money, and so it would just seem--I mean, some of these 
hazards, whether it is a green hazard or something else, it 
just seems an excuse to me to give out money. Groups that get 
it, a lot of this has been studied over and over again, and how 
in the world we mitigate hazards by throwing $198,000 to Ohio 
State University or whomever else to look at these things, it 
just seems to me at a time like this that is probably the first 
things that should be cut. But you are saying that it is 
essential.
    Mr. Michaels. We say they are very useful. These get 
information out to small businesses and do training of 
employees that the businesses couldn't afford to train to work 
safely. So we think this is actually a very effective use of 
the funds.
    Mr. Flake. Here is one, North Carolina Occupational Safety 
and Health Project, $80,000. Grantee will implement training on 
recognizing and reducing and eliminating musculoskeletal, I 
can't say the word, hazards to workers and employers. That is 
carpal tunnel, I guess that kind of stuff?
    Mr. Michaels. That is correct.
    Mr. Flake. I don't know. I look at that and look at what we 
are cutting across government, compliance issues and other 
things, and it would seem to me that these kind of things ought 
to probably be the first to go. I am hearing you say it is 
essential, useful.

                     COMPLIANCE ASSISTANCE PROGRAM

    Mr. Michaels. Well, you know, we are not supposed to be 
talking about H.R. 1, but the focus to H.R. 1 was that your 
compliance assistance programs are really great, but they cut 
enforcement. This is a compliance assistance program. Because 
we really don't want to do the enforcement. We want these 
workers to be safe before we get there. And OSHA can't do it 
all, so we are trying to get to organizations that do that 
work. So I think it is useful.
    Mr. Flake. Thank you.
    Mr. Rehberg. Mrs. Roybal-Allard.

            MINIMIZING REGULATORY BURDENS ON SMALL BUSINESS

    Ms. Roybal-Allard. Mr. Michaels, before I ask my next 
question, the previous question I had you said that it would 
require a lengthy response and you ran out of time. So I want 
to give you an opportunity to elaborate on that. It has to do 
with whether or not OSHA had found evidence of regulation and 
enforcement causing detrimental effects on small business, and 
in keeping with your mission what steps has the Department 
taken to work with small business to minimize any regulatory 
burdens.
    Mr. Michaels. You know, you have asked the key question. 
Our regulations are about saving lives, and over and over again 
we see situations where if an employer had provided the right 
conditions, no one would have been hurt. On the other hand, we 
want to take into account the economic needs of the small 
business. We certainly don't want to close down any jobs. It is 
very important to keep those jobs and keep them safe.
    Now, OSHA has looked at, but more importantly, there are 
other groups who have looked at this, and the Office of 
Technology Assessment, which was a branch of Congress until it 
was ended in the mid-nineties, actually did a study only eight 
OSHA regulations and what has been their effect on businesses 
and what their costs are. They found, in general, I think they 
found seven out of eight, the costs were significantly lower 
than even what OSHA projected, and they didn't affect the 
competitiveness of those businesses. So we know that we can 
write regulations in a way that save lives as well as ensuring 
that businesses aren't unduly burdened.
    What we know from this frankly is OSHA isn't killing jobs. 
OSHA is stopping jobs from killing workers. That is really what 
is going on here, and we think that is very effective.
    Ms. Roybal-Allard. And it also protects small businesses 
that are trying to do the right thing?
    Mr. Michaels. That is right. It is not that these don't 
have any costs, but the costs aren't so big. And the other 
thing though, the costs of injuries to employers is very high. 
Look, Montana has the second highest Workers' Compensation rate 
in costs in the country. What we do is drive down those costs, 
and it is important to businesses as well.

                        WORKER MISCLASSIFICATION

    Ms. Roybal-Allard. Okay. It has been brought to my 
attention that in recent years many employers have reclassified 
their workers as independent contractors to pay less taxes, 
skimp on employee benefits, and to avoid the cost of Workers' 
Compensation and overtime pay which is associated with 
employment of workers classified as employees. Now, the 
President's budget includes funding to train inspectors to 
identify and deter the misclassification of employees as 
independent contractors.
    Can you explain why this funding is important to 
misclassified workers and Federal and State governments?
    Mr. Michaels. Certainly. The sort of situation that our 
inspectors report to me, which are very disconcerting, is they 
will go out and they will see a roofing job, for example, or a 
construction job, with a bunch of workers working unsafely. 
Let's say they don't have fall protection. They will go to the 
operator, the person in charge, and they will say, okay, why 
didn't you give them fall protection? And they will say, well, 
they are all independent contractors.
    There are certain clear rules about what is an independent 
contractor. Too often a business person will pretend that those 
individuals working for them are not really working for them, 
but they are independent contractors, to avoid Workers' 
Compensation payments, to avoid giving them safety equipment, 
things like that. So we train our inspectors on what the law 
is, and the law is very clear about who is an employee and who 
is an independent contractor. So when they go to that work site 
they can figure out is that person really an independent 
contractor or are they actually a worker who their employer is 
really trying to avoid the law.
    Ms. Roybal-Allard. I have no further questions.

                         IMMINENT DANGER ORDER

    Mr. Rehberg. Again, I don't want to ever minimize the 
danger of working in a mine, whether underground or surface 
mine, and the real danger of a loss of life, and I think the 
companies take it seriously, the employees take it seriously, 
and America does as well. I won't belabor the point much 
longer, but I just want to read a citation of one of my mines 
in Montana, Westmoreland.
    I don't know how much you guys know about coyotes, but one 
of my mines received an imminent danger order under section 
such-and-such that two different coyotes had been spotted in 
the vicinity of the maintenance shop, the welding shop, the 
employee parking lots and other areas in the vicinity of mine 
employees. The order requires that all miners be removed from 
the vicinity when the coyotes are present. All miners will be 
required to attend a safety meeting reminding them of the 
danger of coyotes--some call it coyotes--we don't, and other 
wild animals, and of the procedures to take when the coyotes 
are spotted on mine property.
    Come on. Coyotes are more afraid of us than we will ever be 
of them.
    Mr. Main. I am a hunter. I was in the woods 2 days when--or 
a day when two coyotes come to me. I got away from those 
coyotes--and that is a serious story.
    Send the citation to us and we will take a look at it. But 
I just want to make one thing clear. One of the things I did 
when I first took this job was I took a look at all of the 
violations----
    [The information follows:]

                         Imminent Danger Order

    MSHA reviewed the imminent danger order that was issued in 
connection with a coyote being on mine property. MSHA received an 
anonymous hazardous condition complaint reporting that a miner at a 
Montana surface coal mine had been bitten by a coyote. MSHA 
investigated and found a miner had been bitten by a coyote that was not 
afraid to approach humans--behavior that is consistent with having 
rabies. The miner was treated with rabies shots as a preventive 
measure. MSHA issued an imminent danger order requiring the operator 
take action to prevent another miner from being bitten. The order was 
terminated after mine management had the coyote believed to have bitten 
the miner exterminated and trained employees on safety precautions 
around wild animals

    Mr. Rehberg. I will tell you, OSHA is starting to look 
better to me every day, and I never liked you guys.
    Mr. Michaels. If it gets rough, call me.
    Mr. Main. I took a look at all the citations they issued, 
because I was concerned too about the inconsistent stories I 
heard. And here is the fact. In 2009 and 2010, less than 1 
percent of the paper that MSHA issued after everything is 
closed was vacated, which meant that those were standing 
violations, okay?
    The point I am trying to drive here is that the regulations 
are the regulations, the inspectors, whenever they arrive at 
the site, are to cite those, and they don't have discretion not 
to. That is the law. There is a multitude of violations we 
issue every year.
    One of the things that worries me, we talk about contesting 
something extravagant, 355 companies last year contested 80 
percent of the paper they have. Now, if you start with the 
equation that at some mines you may have some that have----
    Mr. Rehberg. As you know, I did ask for a list of the 
various citations from last year, and, of course, that was a 
great document dump. I got to admire your ability to drop paper 
on me. Unfortunately, it didn't really tell me exactly what I 
wanted, and that is, you know, how much are the fines, how much 
were the citations, how many times were you successful in those 
various cases, and ultimately was it a revenue raiser for you 
or not.
    So we are going to go through the process of getting more 
information. It was nice to get the list of citations, about 
like that, but we have some more work to do to make a 
determination are you really creating a safe work environment.

                       JOURNEYMEN MINE INSPECTORS

    And I want to go back to this audit that was done of the 
journeymen mine inspectors, the quarter that felt they had a 
lack of training. Then I look at your budget for fiscal 2012 
and your request, and you are reducing that budget. I wrote 
it--we are always up here trying to do mathematical things, 
education policy and development is going down 5.7 percent. You 
are asking for 2.2 less. But your enforcement budget is going 
up. So it looks like you want to give more citations, you want 
to give more violations. But we have dwelled on training 
problems, but your training budget is going down.
    Mr. Main. Actually it is not. Let me explain what is 
happening. There is a shift of a program out of education and 
training, which is our small mines program, and we are shifting 
that from being managed out of our headquarters to the field 
level being managed, and there is a transfer of $2.3 million 
that is going to go from education policy development to the 
metal-nonmetal industry where we have the most of our work to 
help.
    You talked about the support that we do, the non-
enforcement support, that is the small mines wing. They are not 
authorized representatives.

                          SMALL MINES PROGRAM

    Mr. Rehberg. I was actually going to ask you that question, 
because I noted to myself the small mines program or project is 
being terminated and the employees are being spread out. That 
always concerns you----
    Mr. Main. We tried to clear that up. That is a misnomer in 
our statement. Basically what is happening is there is a small 
mines wing within education and policy development, and that 
primarily works on the metal-nonmetal sector of the mining 
industry. It is managed out of our headquarters in Rosslyn, 
Virginia. We are eliminating the----
    Mr. Rehberg. You will be able to help us identify where 
that $2.2 million reduction is going.
    Mr. Main. It is going into metal-nonmetal, and that is 
where the small mines program is going in. It is going to be 
locally managed by the districts, as opposed to out of our 
headquarters and we hope at the end of the day to have an even 
more improved program.
    [The information follows:]

                           Small Mines Office

    MSHA has no intent to cease the functions of the Small Mines Office 
(SMO). The FY 2012 CBJ proposes to transfer the functions of that 
office (including $2,300,000 and 21 FTE) from Educational Policy and 
Development to Metal and Nonmetal (MNM). The personnel from SMO will be 
integrated throughout MNM, where MSHA can use their expertise and 
provide more meaningful compliance assistance, leading to lower overall 
accident and fatality rates.

    Mr. Rehberg. We will go back in the budget justification 
and look at the numbers and try and rectify that for the 
record. Thank you.
    Ms. DeLauro.

                        STANDARD ON NATURAL GAS

    Ms. DeLauro. Thank you very much, Mr. Chairman. I am going 
to get parochial here for a moment.
    Dr. Michaels, I mentioned in my opening remarks that we had 
a terrible tragedy at the Kleen Energy plant in Middletown, 
Connecticut. I believe it could have been avoided with certain 
specific safety standards in place to deal with natural gas. A 
similar accident occurred at a ConAgra Slim Jim facility in 
North Carolina. Catastrophic explosions cost a human life in 
North Carolina. Seven hundred people lost their jobs. ConAgra 
decided not to rebuild the factory. We had a field hearing in 
Middletown last year at the Ed and Labor Committee. We found 
that natural gas is the only fuel gas not regulated by OSHA, 
even though its consumption exceeds any other fuel gas.
    You are aware the Chemical Safety Board, after extensive 
investigation of both incidents, recommended that OSHA 
promulgate regulations that address fuel gas safety for both 
construction and general industry, at minimum prohibit the use 
of flammable gas that is released to the atmosphere for the 
purpose of cleaning fuel gas piping and draft guidelines for 
employers on the inclusion of workers and contractors in 
developing safe procedures and training for handling that fuel 
gas. It failed to become law.
    Last year, I worked with the previous chairman of this 
subcommittee to include language in the House report directing 
OSHA to develop an interim final standard on natural gas, 
urging OSHA to adopt the CSB's recommendation. What I would 
like to do, Mr. Chairman, if I can, is include this language in 
the record.
    Mr. Rehberg. Without objection.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2340B.174
    
    Ms. DeLauro. So my question is, what is OSHA doing to 
address the risk of workers handling natural gas. With 125 new 
gas fired power plants planned for completion by 2015, 
shouldn't we move to ensure that workers are not put at risk 
during this inherently dangerous practice? In your view is 
there a huge gap in our regulatory framework when it comes to 
natural gas?

                         NATURAL GAS REGULATION

    Mr. Michaels. Right now OSHA recognizes the tremendous 
hazard that is caused by blowing natural gas, especially in an 
area where there is potential ignition and release to the air. 
So first we are working very closely with the National Fire 
Protection Association to develop an updated standard to 
protect workers. Having a consensus standard out there 
immediately will be very helpful.
    We are considering a rulemaking as we closely monitor the 
effects of our other activities. Shortly after we issued our 
citation and very large fine, we contacted every major operator 
who was planning to build a natural gas power plant and 
informed them of the hazards associated with this. As you said, 
there are 120, so it is a relatively small number.
    What we have done with them is we told them, you know, 
while we are looking at regulation and considering doing others 
things, please, know the hazards. Don't do this. We have been 
told across the country that they have stopped doing this. In 
fact, there are three natural gas plants in Connecticut that 
considered doing this. Two of them stopped, two of them 
announced they wouldn't before Governor Rell signed her 
executive order, and now the last one has actually said they 
are not going to use natural gas either.
    So we are monitoring carefully and working closely with 
NFPA and looking at whether or not we should move forward with 
regulation.
    Ms. DeLauro. So you haven't decided to move forward yet?
    Mr. Michaels. That is correct.
    Ms. DeLauro. When are you going to make that decision?
    Mr. Michaels. We will be issuing a regulatory agenda 
sometime in the spring, and then a decision will be made.
    Ms. DeLauro. I am going to assume you are aware that a 
plant in California blew up from using natural gas to purge 
pipelines. A new plant in Florida is using natural gas to purge 
instead of using alternatives like compressed air.
    I am going to ask you, do you agree with the Chemical 
Safety Board that this is an inherently dangerous practice?
    Mr. Michaels. Yes.
    Ms. DeLauro. And we have seen loss of life as a result of 
this practice.
    Mr. Michaels. Yes.
    Ms. DeLauro. So I go back to what I said earlier. I am not 
for wasting time or waiting in the interim here until we get 
the perfect subset of data while people die, either here or in 
mine safety or wherever it exists. We have an obligation, and 
we know the dangers of natural gas and the hazard there. What I 
don't understand is why we are not moving more quickly.
    Mr. Michaels. It is really a resource question.
    Ms. DeLauro. What does that mean, a resource question? Can 
we provide resources to do this?
    Mr. Michaels. Standard setting is an expensive process and 
it is also a lengthy process. And we have a number of 
priorities on the list now and we are looking at what we can 
add to more. But to take anything on takes significant 
resources and we have to look at what are the most effective 
ways we can ensure that workers aren't injured or killed any 
more from this. We recognize the hazard. There is no question, 
it is a huge hazard. So the question is what is the most 
effective way to stop that from happening again. I didn't know 
about this plant in Florida.
    Ms. DeLauro. We will get that to you.
    Mr. Michaels. Please provide me more information on that.

                                  I2P2

    Mr. Rehberg. Thank you. I want to talk about the $2.4 
million you are requesting for your I2P2 regulation. In looking 
at the Federal Register and all the input, it looks like you 
have been working on this for about 30 years as far as a 
prevention program. First of all, tell me a little bit about 
the history.
    Mr. Michaels. Well, the history I could give you is I came 
to the agency in December of 2009 having said beforehand this 
should be our priority. When I got there I said this should be 
our priority. Now, OSHA has thought about this before and 
issued some guidance, but they have never actually moved to 
issuing a standard on this. There are 15 States, including 
Montana----
    Mr. Rehberg. Well, let me then ask you about California, 
because it looks like they are headed down a path, I don't know 
if they have gotten their final approval yet, but it looks like 
it is a whole lot less onerous than some of the discussion that 
is already occurring about I2P2. Has it received an approval?
    Mr. Michaels. California has had this in place for 20 
years. It was passed by the State legislature, put into effect 
by CAL-OSHA, and is widely recognized there and quite accepted 
by the entire community as being very effective.
    Mr. Rehberg. They have to go through an approval process by 
you now?
    Mr. Michaels. No, we approve the overall CAL-OSHA program, 
but this particular regulation is a State regulation set by the 
legislature. We don't have to approve it or disapprove it. I 
mean, it is there, it is functioning. We held a stakeholder 
meeting in Sacramento to hear from employers and from workers 
and from experts there, who all said it is working quite well.
    What we are doing now is gathering information to prepare 
for our first small business meeting with a proposal. So we are 
not even at the proposal stage. And so we don't yet have a 
concrete proposal.
    Mr. Rehberg. Could you just, and, boy, I hate to use 
California as a good example, could you replicate their 
program?
    Mr. Michaels. We certainly could, but what we are trying to 
do is look at all the States and look at the companies in our 
VPP program that already have safety and health management 
systems and say what can we learn from them, what is the best 
things we can do. So that is why we are having these meetings 
and having input. So we are getting there.
    Mr. Rehberg. So of the $2.4 million you are requesting, how 
much of it do you estimate will end up being enforcement as 
opposed to compliance?
    Mr. Michaels. None of it. It will all be in putting 
together the standard. As I was telling Congresswoman DeLauro, 
for us to do a standard, we have to spend $1 million just 
surveying employers around the country to find out what sort of 
programs they have now and what the costs would be. We have to 
go out and do all sorts of feasibility studies. We have to have 
numerous meetings. So that money is strictly for producing 
materials about the compliance assistance in that case and 
gather information.
    Mr. Rehberg. Ms. DeLauro, I am rapidly coming to the end of 
my questions. I am going to complete with Mr. Main, and I don't 
have another set of questions.

                     VOLUNTARY OR FREE INSPECTIONS

    Mr. Main, I wanted to give you an opportunity to finish the 
conversation we were having about voluntary or free 
inspections. I got the feeling that Mr. Michaels has got a 
pretty good handle on that. You do everything you possibly can 
for helping people clearly understand.
    I think your initial answer before I interrupted you was 
that you have to charge. However, is there a program within 
your agency? And you started into we--do what?
    Mr. Main. Thank you, Mr. Chairman. We have a number of 
programs at MSHA that are aimed at compliance assistance, and 
one is the small mines program which we are, like I say, 
transferring to the metal-nonmetal program and hope to beef 
that up to provide additional support. These are non-authorized 
reps who do not have the authority to issue citations.
    We have our education and training program that works with 
the mining industry as well. And we are working in a more 
direct way with--I have a number of partnerships and alliances, 
the National Sandstone Gravel Association, the associations 
that produce silica. I have been out and met with I think 
probably about 15 to 20 State aggregate associations that we 
are in partnership with and a lot of programs to provide 
assistance through a lot of conduits that already exist.
    We just created a Safety Pro in a Box project with the 
National Sandstone and Gravel Association, and it is 
particularly aimed at small mining operations, particularly the 
sand and gravel industry and new employers who come into the 
industry, to give them a tool so they will understand what the 
compliance rules are. But there are a number of things that we 
are doing in addition to our enforcement program.
    Some other things that we are working on which I think 
would be of interest to you, Mr. Chairman, the contest issue, 
setting up a system where we can sit down and resolve a lot of 
these issues that are legitimately to be resolved before they 
ever go into the litigation pile. I have a pilot conference 
process that I have launched working with the mining industry 
which would, and we plan to move forward with this, which will 
allow mine operators to sit down with the folks locally and try 
to resolve these things before you get to litigation and trying 
to weed out unnecessary litigation that goes into the backlog, 
and other projects like that.
    Mr. Rehberg. Thank you very much.
    Ms. DeLauro.

                               INSPECTORS

    Ms. DeLauro. Thank you, Chairman. I have got several 
questions. I just would like to make a comment with regard to 
inspectors and whether or not they have worked in the mine. We 
have all kinds of inspectors in the food safety inspection and 
we have inspectors in our poultry and our meat plants every 
day. I am not sure they have worked in those plants either. We 
usually put people in who have the capabilities and skills and 
are trained in order to be able to do the job, whether or not 
they have worked in the particular facility or not. I think 
otherwise it would be quite a patchwork here.
    Mr. Main. I think our inspectors do have a lot of 
experience in the mining field.

                          FUNDING FOR BACKLOG

    Ms. DeLauro. Okay, that is it. It is the inspection in the 
area, rather than with regard to a particular mine.
    With regard to the backlog, a very quick question here, 
19,000, as I understand it. Will current funding be able to 
address that backlog? You have got $8 million in this CR. Or do 
you need additional funding in order to deal with this backlog? 
$8 million is a small amount of money.
    Mr. Main. We have a request in the fiscal year 2012 budget 
for an additional $15 million for backlog program and an 
additional $3.3 million for resources within MSHA. And that 
will work. That money would be utilized by both the Solicitor 
of Labor and MSHA. We have the request in.

                            SILICA STANDARDS

    Ms. DeLauro. Let me ask you both about silica standards. I 
know both of you are working on the revised standards on 
silica. I am going to ask you to answer the questions quickly. 
I don't know if the chairman will let me go on. I have got 
several questions.
    How serious a problem is silicosis in this country? What 
are the current OSHA-MSHA regulations? Why are they inadequate 
to deal with the problem? Are OSHA and MSHA working together to 
coordinate their rulemakings on silica?
    Mr. Michaels. I think I can handle those quickly. The last 
question, yes, we are working closely. OSHA is moving further 
ahead. Silicosis remains a significant problem in the United 
States, but, more importantly, silica causes not just 
silicosis, but a number of other diseases, kidney disease, 
other lung diseases, and lung cancer.
    Our standard, the OSHA standard for general industry and 
for construction and for maritime dates to the late 1960s-early 
1970s when it was not understood that silica also caused lung 
cancer. So we are updating our standard. This is the other 
issue of an old standard that is really out of date. Our 
construction standard actually requires equipment that doesn't 
exist anymore and uses measurements that aren't used anymore. 
That is how much the industry has changed.
    So we are trying to update to the latest information, 
taking into account what we understand about health effects, 
ways we understand to protect workers and the new types of 
measurements. So we think this is a very important standard. We 
think it will save many lives.
    Ms. DeLauro. Do you want to add anything?
    Mr. Main. I will echo what my counterpart has just laid 
out. And it doesn't make any difference if you are a miner or 
construction worker, where you are working at. Silica harms the 
human being. So we are using the same information.
    Ms. DeLauro. Thank you. Your high impact inspections, Mr. 
Main, good results from that? Will you continue this inspection 
program in 2012?
    Mr. Main. Absolutely. I think it is a tool that is long 
overdue. It lets us identify mines that are getting most out of 
control in the mining industry. We try to do a good job 
focusing in on those that have high violation rates or 
significant problems.
    Ms. DeLauro. What are you doing in this instance? Just give 
me a thumbnail of the process.
    Mr. Main. We target mines that have exceptional citation 
orders, beyond the norm, high injury rates, mines that could be 
prone to explosions, disasters, mines getting advance notice of 
inspections where they are trying to hide things. We get minor 
complaints.

                        DIACETYL HEALTH EFFECTS

    Ms. DeLauro. Okay. Diacetyl, Mr. Michaels, you know it is 
of real interest to me. In my other capacity I pursued this 
with the FDA and they generally recognize the status of the 
chemical. The issue before us is workplace safety. I am aware 
of cases where workers inhaled large quantities of diacetyl and 
got sick with bronchiolitis obliterans.
    Three years ago, popcorn manufacturers moved to substitute 
diacetyl from their product. Secretary Solis ordered another 
peer review of diacetyl's health effects last year.
    Where are we in pursuing the risks to workers exposed to 
diacetyl? In your expert opinion, are workers working with this 
chemical protected from injury or illness under current OSHA 
standards? If not, can you explain why not?
    Mr. Michaels. Yes, the concern is that employers, popcorn 
manufacturers and others, have moved from diacetyl to the 
substitutes.
    Ms. DeLauro. The substitutes may be equally as toxic.
    Mr. Michaels. Right, but we don't have human evidence, and 
this is exactly the problem. So if we focus only on issuing a 
standard on diacetyl, I call this a regulatory whack-a-mole. 
The industry, and we work very closely actually with FEMA, the 
Food and Extract Manufacturers Association, they had the name 
first, to try to figure out how to protect workers on that. But 
we can't issue a standard just on diacetyl because no one is 
using it anymore. So now we are now looking at the other 
chemicals.
    But we are out there inspecting plants for all of the 
exposures. And we have told employers, we know enough that 
workers have to be protected now from all of the substitutes as 
well.
    Ms. DeLauro. I will just urge you to keep working on it. I 
think it is important to note for the record that irreversibly 
this disease destroys the small airways in the lungs, and the 
only hope for many is a single or double lung transplant, which 
is not easy to come by. So it is very, serious.
    Mr. Chairman, I have two additional questions.
    Mr. Rehberg. Sure.
    Ms. DeLauro. Thank you. I appreciate that. A different 
area, different industry.

         WORKER INJURIES AT POULTRY AND MEAT PACKING FACILITIES

    Dr. Michaels, this is about worker injuries at poultry and 
meat packing facilities. According to a study, line speed at 
one beef plant dramatically increased from about 270 head per 
hour in 1994 to 360 head per hour in 2008. Across the red meat 
industry, chain speeds have increased 20 percent over the last 
20 years. Line speed in poultry plants has also increased 
phenomenally over the past 20 years.
    In 2006, GAO asserted that workplace injuries in the meat 
packing industry were widely underreported. Of the six 
recommendations from the same 2006 report, only two would have 
been implemented.
    Does OSHA have any evidence of a correlation between an 
increase in line speeds and an increase in actual worker 
injuries? Will you consider collaborating with USDA and NIOSH 
to study this issue? We need that on this issue and we need 
research.
    Mr. Michaels. We have none OSHA doesn't produce scientific 
information. Our sister agency, NIOSH, does. But it is my 
understanding that we are working with NIOSH and USDA to do a 
study in those plants and we are eager to find the results, 
because we don't know the answer to that.
    Ms. DeLauro. Because the research is not there to deal with 
that. I appreciate that.
    Finally, you have a number of important rules or standards 
that your agencies are working on, and if you could just, you 
know, just quickly tick them off and why they are important for 
protecting worker safety and health.
    We have a piece of legislation that was introduced in 
January, H.R. 10, which would make a major change in the way 
you develop and issue regulations and standards. If a rule is 
classified as a major one, it would not be allowed to take 
effect unless both Houses of Congress pass a bill approving it. 
That would seem to make it easy to block any regulation and 
hard to adopt one.
    What would be the effect of this change on your agency? Why 
do you need to adopt new standards and rules? What would be the 
effect on health and safety if you weren't able to complete 
rulemaking?
    Mr. Michaels. Let me give you an example. We have standards 
for 500 chemicals; 470 of those standards date to 1969 or 
before. It is really ancient history in terms of science. We 
are slowly beginning to issue new standards on some of these 
chemicals. And it takes years for us to issue a standard. We 
have standards in the works not just on silica, but on 
protecting workers from falls. We have a new standard, our 
injury and illness prevention program standard. We think that 
the way we change behavior across the country is with a 
standard. It is more useful even than enforcement.
    When you say, OSHA says do something, employers do the 
right thing and they do it. So when we issue a standard, it has 
an impact. So slowing down or stopping our standard setting 
process I think would really be disastrous.
    Mr. Main. Yes, I concur. Black lung, the rule we are 
working on has been in rulemaking for over a decade. Miners are 
dying. It is time to act. Proximity detection, one of the 
leading killers now in underground coal mines, believe it or 
not, are miners getting crushed with equipment. The technology 
is there, it has been developed over about 10 years, to get it 
in place to stop these deaths.
    The pattern of violations, we have to have a pattern of 
violations that is respected and works. I think we all agree 
with that.

                         WORKPLACE EXAMINATIONS

    The regulation on workplace examinations, 175,000 
violations were issued in 2009 at mines. 100,000-plus of those 
are underground coal mines. We think mine operators need to do 
a better job of examining for compliance with mandatory 
standards. Congress said that in 1969. Things like that.
    Ms. DeLauro. With regard to that, when you are dealing with 
compliance, are you dealing with outreach, with mine operators, 
miners, other stakeholders? The outcome of that kind of 
outreach, do you consider it a success in terms of your 
compliance?
    Mr. Main. On the black lung, I think there has been years 
of information developed on that one that has helped us get to 
a proposed rule, for example.
    Mr. Rehberg. I am going to suggest that if you have 
additional questions----
    Ms. DeLauro. No, I will submit them for the record.
    Mr. Rehberg [continuing]. Please submit them for the 
record. We will leave the record open and we will ask that you 
in a timely fashion, we will be dealing obviously with the 
fiscal 2012 budget, give us timely answers to any of the 
questions that we might submit for the record as well so we can 
have it before we begin our markup on the fiscal year 2012 
budget.
    I thank you both for coming in today and appreciate the 
information. Oversight hearings, we are supposed to learn 
something, and I think we did. So thank you very much.

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