[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





                   REDUCING WASTE AND MISMANAGEMENT:
                     IMPLEMENTING AGENCY WATCHDOGS'
                      RECOMMENDATIONS COULD SAVE 
                           TAXPAYERS BILLIONS

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 5, 2013

                               __________

                           Serial No. 113-15

                               __________

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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        VACANCY
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director









                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 5, 2013....................................     1

                               WITNESSES

The Honorable Anthony W. Miller, Deputy Secretary, U.S. 
  Department of Education
    Oral Statement...............................................     8
    Written Statement............................................    11
The Honorable Kathleen S. Tighe, Inspector General, U.S. 
  Department of Education
    Oral Statement...............................................    15
    Written Statement............................................    16
The Honorable John D. Porcari, Deputy Secretary, U.S. Department 
  of Transportation
    Oral Statement...............................................    30
    Written Statement............................................    32
The Honorable Calvin L. Scovel III, Inspector General, U.S. 
  Department of Transportation
    Oral Statement...............................................    45
    Written Statement............................................    47

                                APPENDIX

Letter submitted for the record by a teacher.....................   100
Letter from the Department of Transportion to The Honorable 
  Darrell Issa and Elijah E. Cummings............................   102
Letter from the United States Department of Education to The 
  Honorable Darrell Issa and Elijah E. Cummings..................   110
Open and Unimplemented IG Recommendations Could Save Taxpayes $67 
  Billion, Staff Report from Committe on Oversight and Government 
  Reform.........................................................   118

 
   REDUCING WASTE AND MISMANAGEMENT: IMPLEMENTING AGENCY WATCHDOGS' 
             RECOMMENDATIONS COULD SAVE TAXPAYERS BILLIONS

                              ----------                              


                        Tuesday, March 5, 2013,

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 10:06 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Duncan, McHenry, 
Jordan, Chaffetz, Walberg, Lankford, DesJarlais, Farenthold, 
Lummis, Woodall, Massie, Collins, Meadows, Bentivolio, 
DeSantis, Cummings, Maloney, Tierney, Clay, Connolly, Speier, 
Cartwright, Pocan, Duckworth, Davis, and Horsford.
    Staff Present: Ali Ahmad, Majority Communications Advisor; 
Kurt Bardella, Majority Senior Policy Advisor; Molly Boyl, 
Majority Parliamentarian; Lawrence J. Brady, Majority Staff 
Director; Sharon Casey, Majority Senior Assistant Clerk; Steve 
Castor, Majority Chief Counsel, Investigations; John Cuaderes, 
Majority Deputy Staff Director; Jessica L. Donlon, Majority 
Counsel; Kate Dunbar, Majority Legislative Assistant; Adam P. 
Fromm, Majority Director of Member Services and Committee 
Operations; Linda Good, Majority Chief Clerk; Frederick Hill, 
Majority Director of Communications and Senior Policy Advisor; 
Christopher Hixon, Majority Deputy Chief Counsel, Oversight; 
Jean Humbrecht, Majority Counsel; Mark D. Marin, Majority 
Director of Oversight; Kristin L. Nelson, Majority Counsel; 
Laura L. Rush, Majority Deputy Chief Clerk; Scott Schmidt, 
Majority Deputy Director of Digital Strategy; Jonathan J. 
Skladany, Majority Counsel; Peter Warren, Majority Legislative 
Policy Director; Rebecca Watkins, Majority Deputy Director of 
Communications; Claire Coleman, Minority Counsel; Jimmy 
Fremgen, Minority Legislative Assistant; Susanne Sachsman 
Grooms, Minority Chief Counsel; Jennifer Hoffman, Minority 
Press Secretary; Carla Hultberg, Minority Chief Clerk; Adam 
Koshkin, Minority Research Assistant; Elisa LaNier, Minority 
Deputy Clerk; Lucinda Lessley, Minority Policy Director; Dave 
Rapallo, Minority Staff Director; and Rory Sheehan, Minority 
New Media Press Secretary.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles: first, Americans have a right to know that the 
money Washington takes from them is well spent and, second, 
Americans deserve an efficient, effective Government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights.
    Our solemn responsibility is to hold Government accountable 
to taxpayers, because taxpayers have a right to know what they 
get from their Government, and we will work tirelessly in 
partnership with citizen watchdogs and our IGs to deliver the 
facts to the American people and bring genuine reform to the 
Federal bureaucracy.
    Today, I first want to thank our ranking member, Mr. 
Cummings, for joining me in this hearing that will serve as a 
fact-based blueprint for a conversation unfolding about 
Government savings and Government spending. With attention to 
policymakers on how best to manage an $85 billion 
sequestration, this is the time to lead the discussion on 
finding and eliminating waste that is based in fact.
    We have heard tales of massive teacher layoffs, pay cuts, 
Capitol janitors, security guards, and many other effects of 
sequestration. I am here to say some of them might be true. 
There will be, in fact, reductions in the size of the Federal 
workforce. There will be changes in contracts. But many of them 
can be avoided if we look for win-win savings.
    One of our challenges is knowing, whether you are a 
Republican or a Democrat, whether you are in the House or the 
Senate, whether you are an IG or administering a part of 
Government, we all know that there are embedded wastes in 
Government. There are fiefdoms, if you will, that over the 
years, with their budget divisions, have built up inherent 
duplicative programs. We spent years examining them.
    We are, today, meeting, among others, with two widely 
respected IGs who, among other things, by definition, will tell 
us it is frustrating to be an IG; you don't control your 
budget, you may not even control whether or not there is an IG 
in the post or, as often happens under both administrations 
that I have served under, you have acting positions.
    There are widely different rules on what an IG can do but, 
most importantly, IGs, under the current law, have a number of 
limitations. If someone leaves the Federal workforce, they 
leave the ability of an IG to specifically demand their 
presence and hold them accountable. If someone is in another 
part of Government not covered by that particular IG, it is 
only on the request and granting by the other agency that 
investigation can cross the lines of jurisdiction.
    It is inherently wrong. We form joint task forces. We spend 
each other's money. We work together. We are one Government and 
we need to have solutions that meet that one Government 
oversight.
    More importantly, with sequestration, one thing we are 
considering here today is IGs are not immune from it. In any 
company I can imagine, in tough times, when you are making 
budget cuts and you are looking to find waste, you don't lay 
off the people who find the waste for you. You don't, in a 
fraud situation, get rid of your auditors. That is one of the 
challenges we will face, and as a committee and the primary 
committee of jurisdiction for all IGs, one of our challenges is 
to empower a small $2 billion total Government budget and about 
12,000 men and women that call themselves IGs to do more, not 
less.
    We also, today, have entered for the record, and it is on 
our Web site, one of the continuing reports that began with 
several of my predecessors ago in which we looked at the 
potential savings. I want to make it clear the number in that 
figure continues to rise. It rises for two reasons: Government 
is getting bigger and the reporting we are getting is more 
detailed. And I want to thank all those who annually give us 
that information for scrubbing better and better. As far as I 
can tell, we have never had a year in which we got less; we 
always got more.
    One of my predecessors, Mr. Henry Waxman, under the Bush 
administration, put out a number of $26 billion that could be 
saved if the Bush administration would act faster on these 
suggestions. At the time, I was probably what you would call an 
apologist. I was looking for how many of those were relatively 
recent; how many had been closed; how inherently fair or unfair 
Mr. Waxman's work was. When the burden changed from Mr. Waxman 
to myself, I began to realize that he had done the Bush 
administration a great favor. The numbers, in fact, were simply 
tabulations of what was reported. Some, in fact, could be 
explained. Many could be explained. Some would be dealt with in 
a short period of time, and many were.
    But as we all know, Mr. Cummings, myself, and everyone on 
the dais, oversight is in fact about recognizing the potential 
for savings, recognizing and putting in front of the 
Administration, at a minimum, and the public, in some cases, 
what we can do, and then encouraging it to happen faster.
    This committee has had some recent successes in finding 
specific areas of waste and overpayment, pushing the Government 
to act faster to save the taxpayers literally billions of 
dollars. It is the kind of thing we should do and we will do.
    I am halfway through my chairmanship. Being halfway through 
a chairmanship tells you that when you look behind you, you ask 
have I done enough; and the answer is I haven't. Looking 
forward, I have little time to do more. So with my partners on 
both sides of the dais, today we are starting a much greater 
dialogue with our IGs, a much greater dialogue with the changes 
that need to be made if in fact Government outside of this 
body, in the executive branch, can do better, do quicker to 
save the taxpayers money.
    With that, I would like to thank my partner, Mr. Cummings, 
for his help in preparation for this hearing, and I recognize 
the gentleman from Maryland.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Chairman, first of all, I appreciate your statements 
and, as you were talking, I could not help but be reminded that 
in so many instances our IGs are our last line of defense. Last 
line of defense. IGs are critical to ensuring that our 
Government works effectively and efficiently on behalf of 
American taxpayers. They will be meeting a deadline on April 
15th, that is, the taxpayers, and they want to know that their 
money is spent effectively and efficiently. And you are right, 
Mr. Chairman, we need to be acting with the urgency of now if 
we are going to make a difference.
    Our committee in particular relies heavily on the IGs' 
detailed audits, inspections, and investigations to support our 
oversight efforts. We depend on IGs to cast a very critical eye 
over all aspects of agency operations, to question why things 
are done the way they are done and to affirmatively identify 
ways to improve program effectiveness. We are, indeed, partners 
with the IG because they, in so many instances, provide us with 
information that we are then able to look into and make 
changes.
    In December, Chairman Issa and I sent joint letters to all 
73 IGs, asking them to identify the most significant open 
recommendations for reducing waste and improving efficiency in 
their agencies. Today's hearing will be the first of a series 
of hearings to examine these recommendations.
    Today I am happy to welcome the IGs from the Department of 
Education and Transportation, as well as the deputy secretaries 
from each Department. I would like to give special welcome to 
my friend, Deputy Secretary John Porcari. He served for many 
years as secretary of the Maryland Department of Transportation 
and I have had the opportunity to work closely with him on 
important transportation issues for my State. I have the 
deepest respect. I look forward to hearing from him and our 
other witnesses about how they are working to improve our 
Government.
    In addition, I plan to ask all of our witnesses about the 
devastating effects of sequestration.
    Mr. Chairman, just this weekend I was at an IHOP restaurant 
after church, and a lady walked in with her 11-year-old and she 
mentioned to me that she just got the sequester notice from the 
Department of Defense that she would be having to be furloughed 
for four days out of a month and it would cost her $800. She 
has two kids, one in college and one 11-year-old, who she had 
with her, and she literally broke out in tears.
    The reason why I mention this is I want us to be reminded 
that sequestration does have an impact. But we can hopefully 
lessen that impact by making sure that we spend dollars 
effectively and efficiently in the long-run to make sure that 
those dollars are spent in a way where we can avoid those kinds 
of situations.
    This is a huge issue and, frankly, we would be derelict in 
our duty if we did not examine how these arbitrary and massive 
cuts will impact core Government services that Americans across 
the Country rely on every single day. Like almost all Federal 
agencies, the two Departments testifying before us today will 
have to make deep cuts to key programs and services. For 
example, these drastic cuts will reduce our mobility in the 
skies. The vast majority of FAA's 47,000 employees are facing 
extensive furloughs, including air traffic controllers. This 
will result in delays and disruptions at our airports, 
cancelled flights, and impeded commerce. I know there many who 
are saying that sequestration will have little impact. They 
just need to come to my district.
    Sequestration also will have a devastating impact on 
education programs across the Country, including on our most 
vulnerable folks, our children. Cuts in Title I grants to high 
poverty school districts could eliminate support to an 
estimated 2,700 schools and 1.2 million disadvantaged students. 
Sequestration also deeply impacts children with disabilities, 
slashing funds from programs that provide special education 
teachers, staff, and other support.
    The irony is that we are holding a hearing today on IG 
recommendations to make these two agencies more effective and 
efficient, but it will be more difficult for these agencies to 
implement these recommendations while their budgets are being 
cut and their employees are being furloughed.
    You are absolutely right, Mr. Chairman. When we have a 
group of people who are basically saving the taxpayers money 
and making sure those monies are being spent effectively and 
efficiently, those are the last people we need to see being 
furloughed. Even IG offices themselves will feel the negative 
effects of sequestration, hindering their ability to conduct 
the very oversight work we are praising them for today.
    So I want to thank our witnesses for being here today. And 
as to the report that the Chairman is submitting, I thank you 
for your courtesy in talking to me before the hearing and I 
thank you for making it clear that if there is any disagreement 
in the numbers, we can resolve them at a future date.
    With that, I yield back.
    Chairman Issa. I thank the gentleman very much.
    We now go to the gentleman from Ohio, Mr. Jordan.
    Mr. Jordan. Thank you, Mr. Chairman, for having this 
hearing today. I couldn't agree with you more. This hearing is 
about facts. This hearing is about credibility. And let's just 
cut to the chase. If Government agencies and the secretaries 
who head those agencies would spend more time implementing the 
IGs' recommendations and less time scaring the American people 
with all the political statements they have made regarding 
sequestration, the taxpayers would be a lot better off. I mean, 
it is just simple facts.
    We had a hearing two weeks ago, no, excuse me, last week, 
where we had the special inspector general for TARP come in and 
talk about, repeatedly, three years now, she has made 
recommendations to the paymaster, the special master for 
executive compensation, and only one of the eight 
recommendations she has repeatedly made have been implemented. 
And the facts are this: in 2009, when that program was put in 
place, when the taxpayers bailed out seven different companies, 
only six executives were getting pay of over half a million 
dollars a year. Now, with only two companies still left in the 
program, 23 executives are getting pay of over half a million 
dollars a year because the paymaster won't follow the inspector 
general's recommendations. I mean, this is something that has 
to be done if we are going to save the taxpayers the kind of 
money they deserve to have saved.
    And, of course, just this past week, Mr. Chairman, when 
President Obama said at his press conference that the janitors 
and security guards who work at the Capitol will face pay cuts, 
the superintendent of the Capitol had to send an email out to 
employees saying pay and benefits will not be impacted. Once 
again, the President was making statements that just weren't 
accurate.
    Of course, the one that is most famous is the Secretary of 
Education, Mr. Duncan. And you don't have to take my word for 
it that he misled the American people; take The Washington 
Post, that conservative newspaper who always takes the 
conservative position. Take their word for it. When Mr. Duncan 
said this: It means a lot more children will not get the kinds 
of services and opportunities they need, and as many as 40,000 
teachers could lose their job. Here is what The Washington Post 
said. The Washington Post said, ``Mr. Duncan made this claim 
not once, not twice, but three times. Let this be a teachable 
moment for him. Next time, before going on television, check 
your facts.'' And then the last line in the article says, 
``Four Pinocchios. That is the most you can get.'' That means 
he totally misled the American people on this.
    We need more time spent on implementing what the inspectors 
general tell our agencies to do; less time spent on this 
political game of scaring the American people about 2.4 percent 
cut to the overall Federal budget.
    So I appreciate the chairman having this hearing, having 
the witnesses today, and I look forward to a good hearing for 
all members, and would yield to the gentleman from North 
Carolina.
    Mr. McHenry. And I thank my colleague for yielding.
    Chairman Issa. For two minutes and 16 seconds.
    Mr. McHenry. Yes. I will keep it brief.
    Chairman Issa. The gentleman is only yielding his time.
    Mr. McHenry. Thanks. Well, actually, you can just give me 
2.4 percent less, in light of the sequester.
    So, with that, I just wanted to say that this Congress has 
acted to give the executive branch dramatic flexibility for 
implementing the sequester. Dramatic flexibility. Presidents, 
for my full lifetime, have asked for this level of budget 
flexibility. This President has said he does not want it. So 
the implementation of the sequester has been limited in terms 
of how agencies can fulfill those cuts, but the executive 
branch does have flexibility in implementing this to make sure 
that that person that the ranking member met on Sunday after 
church doesn't have to be in tears and does not have to be 
furloughed. There are many choices the executive branch could 
make, beginning with the recommendations from the IGs.
    So I thank my colleague for yielding and would yield back 
the balance.
    Mr. Jordan. I thank the gentleman.
    Yield back my time.
    Chairman Issa. I thank both the gentlemen.
    We now recognize the gentleman from Pennsylvania, Mr. 
Cartwright, for the opening statement.
    Mr. Cartwright. Thank you, Chairman Issa and Ranking Member 
Cummings.
    The implementation of recommendations from our inspectors 
general can serve to decrease waste and ensure that the Federal 
Government is spending the taxpayers' money as efficiently as 
possible.
    I want to welcome our witnesses here today and tell you I 
look forward to hearing about the work of the IGs today and 
working with my colleagues to maximize the efficiency of 
Government, an endeavor which is increasingly important during 
these difficult economic times.
    For example, bridge safety is particularly important in my 
district. I represent the 17th Congressional District of 
Pennsylvania, including Lackawanna County, Pennsylvania. In 
Lackawanna County, Pennsylvania alone we have 66 bridges that 
have been graded as structurally deficient or have 
deterioration to one or more of their major components, and 
another four bridges that are closed entirely. That is more 
than 10 percent of the total bridge closures in the State of 
Pennsylvania. It represents more than an inconvenience; it is a 
danger and a looming expense that will be difficult to pay. It 
is the type of issue we need to head off before it gets to this 
point, and I believe the recommendations of the IG can help.
    Unfortunately, implementation of these recommendations is 
going to be all the more difficult because the testimony from 
the Inspectors General Tighe and Scovel come in the midst of 
yet another manufactured fiscal crisis. Republican leadership's 
refusal to negotiate in good faith with President Obama has 
forced our Nation into this sequestration, costing vital 
programs the money needed to operate. The cuts to the 
Department of Education and Transportation each measure about 
$2 billion. The Department of Education will see devastating 
decreases in areas including special education programs, 
disability services, and higher education. Transportation cuts 
will slash the budget of the key safety agency such as the 
Federal Aviation Administration.
    Moreover, the CR put forth by the Republican leadership 
this week would further slash funding to areas such as highway 
safety to below the levels agreed upon just last in MAP-21, the 
comprehensive service transportation bill. The CR also fails to 
account for the new structures put in place by MAP-21, thus 
allocating money to accounts that no longer exist in law, while 
not funding new vital programs. These are real problems with 
relatively simple fixes that Congress should be solving, 
instead of creating new issues for these departments.
    Additionally, the very IG offices that make these 
recommendations will be cut by the sequester. Inspector General 
Tighe's office will be reduced by $3 million and Inspector 
General Scovel's office will lose $4 million. If we are to 
emphasize the role played by these offices, it makes no sense 
to allow this sequester to cut back on their future work.
    The negative impacts of sequester cuts are simply more 
proof that blindly hacking at the budget is not an effective 
path towards fiscal responsibility. If we are to make progress 
in reducing waste and maximizing services, we can't allow the 
sequester to continue. We can begin by following a common sense 
approach, like the ones proposed by Representative Chris Van 
Hollen and House Democrats or the White House, which replaces 
the sequester by closing loopholes for oil and gas companies, 
ensuring the wealthy don't use tax breaks to pay less than 
their fair share, and things like refocusing our farm 
subsidies.
    We cannot do this alone. I urge Republican leadership to 
come to the table in order to seriously and responsibly seek a 
balanced approach that will put our Nation on a path towards 
fiscal responsibility without jeopardizing our services or our 
national economic recovery.
    With that, I yield back. Thank you.
    Chairman Issa. The gentleman yields back.
    We would now like to welcome our witnesses today. The 
Honorable Anthony W. Miller is Deputy Secretary of the U.S. 
Department of Education and is Education Department's Chief 
Operating Officer; the Honorable Kathleen Tighe is Inspector 
General of the United States Department of Education. Welcome. 
And the Honorable John Porcari is Deputy Secretary at the U.S. 
Department of Transportation and is DOT's Chief Operating 
Officer; and the Honorable Calvin L. Scovel III is the 
Inspector General of the Department of Transportation.
    And as many of you have seen on C-SPAN, pursuant to our 
rules, would you please rise to take the oath? And raise your 
right hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Chairman Issa. Let the record reflect all witnesses 
answered in the affirmative.
    This panel is extremely important to us. Your opening 
statements are all in the record in their entirety, so, to the 
greatest extent possible, if you could limit yourself to the 
five minutes, summarize where approach, we would appreciate it. 
And that will leave more time for the Q&A that I know you are 
all looking forward to.
    With that, Mr. Miller, if you would lead off.

                       WITNESS STATEMENTS

          STATEMENT OF THE HONORABLE ANTHONY W. MILLER

    Mr. Miller. Thank you, Mr. Chairman, Ranking Member 
Cummings, and committee members for the opportunity to testify 
before you on the Department's efforts to improve efficiency, 
reduce fraud, and reduce waste. My testimony today will be 
organized around four key components. First, I would like to 
start with our overarching philosophy.
    Since the start of our administration in 2009, Secretary 
Duncan and our team have been committed to enhancing how the 
Department conducts its operations. When the Secretary asked me 
to join his team, it was an explicit intend to leverage my 
extensive private sector experience to enhance the Department's 
operational and performance management capabilities.
    The Department of Education is committed to a philosophy of 
continuous improvement as we manage a broad array of programs 
and activities as cost-effectively as possible that will help 
ensure our Nation's students have the opportunity to obtain a 
world-class education. And I can tell you with confidence that, 
while we remain focused on ways to continuously improve our 
performance, the Department of Education has long been engaged 
in making dramatic gains in our programmatic and operational 
efficiency.
    Let me start with what we have done to streamline our grant 
and Federal aid programs. Recognizing that 99 percent of the 
Federal funds for the Department are invested in programs, we 
know that programmatic change will have the highest impact. We 
looked at programs across the Department with an eye toward 
increasing efficiency, maximizing impact, and ensuring the 
sustainability of improvements.
    We proposed, and Congress enacted, reforms to the student 
loan programs in 2010, which saved taxpayers $68 billion by 
boosting our share of Federal student loan volume from around 
20 percent to 100 percent. We also proposed cost-cutting 
efforts to further save billions of dollars by eliminating and 
consolidating some Department programs and reforming other 
programs. From 2010 to 2012, Congress acted on many of these 
recommendations by eliminating 49 programs, which resulted in 
savings of taxpayers of $1.2 billion a year.
    Next I want to talk about how we have adopted a risk 
management approach. Overall, the Department has been 
historically been very efficient in administering its grants 
and loans programs, but we wanted to evaluate areas for further 
improvement. In particular, we worked aggressively to improve 
how we support and provide oversight of grantees and student 
aid recipients to mitigate the risk of waste, fraud, and abuse 
before it happens.
    We have added steps to pre-screen all grantee slates, for 
example, recognizing that the more we can do early in the 
process reduces the potential risks later in the process. We 
have also taken steps post-award to mitigate the risk. We focus 
on working closely with our inspector general and GAO in this 
effort, and in our first year Secretary Duncan met with GAO's 
comptroller general to ensure a collaborative working 
relationship and, likewise, the Secretary and I work very 
cooperatively with Inspector General Tighe and we have put in 
place formal processes to ensure both GAO and IG have access to 
the Department staff and have access to the resources to stay 
apprised of key issues. In the last 12 months, we have 
dramatically improved our ability to identify and resolve high-
priority audits in a timely manner, and we are finding new ways 
to leverage audits to make targeted improvements in other 
critical areas.
    For the remaining one percent of the Department's funds, 
which are reflected in our administrative spending, we have 
taken a multi-pronged approach to improve our efforts. From an 
internal management perspective, we have tried to control 
personnel levels, which represents one-third of the 
administrative cost, as well as taking on 60 percent of the 
Department's administration cost in the area of contracts. We 
have reduced rented office space; we have taken advantage of 
emerging technologies such as cloud computing; and specifically 
we have held and/or reduced staffing levels. For example, since 
2010 we have gone from more than 4400 full-time equivalents to 
approximately 4,250 FTEs, resulting in approximately $18 
million in annual cost savings.
    Lastly, let me turn our attention to Executive Order 13589, 
promoting efficient spending. In response to the President's 
Executive order, we took a holistic approach at spending and 
aggressively cut travel, printing, and supply costs. We were 
able to exceed this target in fiscal year 2012, reducing 
spending on these activities by more than 20 percent. Key steps 
we took included, wherever possible, using video conferencing 
and conference calls to reduce travel; publishing online 
instead of hard copy, when we could; and getting smarter in our 
acquisition of supplies. These strategies have enabled us to 
cut spending on travel by 20 percent, reduce spending on 
printing and supplies by 30 percent and 29 percent, 
respectively; and we are on pace to meet the 30 percent 
reduction requirement in OMB's Memorandum 1212.
    In conclusion, I would like to say while we are focused on 
the topic of efficiency, as has already been highlighted, I 
would be remiss if I did not address the issue of the 
sequester. Even as you asked us to take thoughtful, surgical 
steps to save money, which is smart government, the sequester 
requires us to cut by hatchet in a way that is not good for 
Government. At a time when we should be investing in education 
to ensure our Nation's youth will be prepared for the 
increasingly globally competitive world, the steps 
sequestration forces us to take are counterproductive, to use a 
gentle word.
    The Department remains committed to ensuring that taxpayer 
dollars are spent wisely and that recipients of taxpayer funds 
are used as intended. We are proud of the work we have 
accomplished thus far and look forward to continuing to improve 
on both our process and our outcomes.
    Thank you, Chairman Issa, Ranking Member Cummings, and 
members of the committee for the opportunity to testify today 
about the efforts we are undertaking to improve and promote 
efficiency and reduce costs. I would be glad to answer any 
questions.
    [Prepared statement of Mr. Miller follows:]


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    Chairman Issa. Thank you.
    Ms. Tighe.

          STATEMENT OF THE HONORABLE KATHLEEN S. TIGHE

    Ms. Tighe. Chairman Issa, Ranking Member Cummings, and 
members of the committee, I am pleased to be here today to 
discuss opportunities to reduce waste and improve efficiency at 
the U.S. Department of Education. I want to thank the committee 
for its work in highlighting the issue of unimplemented OIG 
recommendations and for shining a spotlight on a topic that is 
an important part of good government.
    Since 2007, we have reported to this committee on several 
occasions on recommendations made in OIG reports that the 
Department had not yet implemented. Our most recent letter 
focused on high priority short-term and long-term 
recommendations. We highlighted recommendations we have made in 
five very diverse areas, all of which we believe are important 
to the Department's ability to deliver its programs and 
operations efficiently, and without waste of taxpayer dollars.
    As is set out more fully in my written statement, those 
areas are: Federal student aid fraud rings, the Federal student 
aid debt management system, IT security, improper payments, and 
charter schools. Each of these areas is directly aligned with 
the Department's management challenges for this fiscal year, as 
identified by my office.
    The goal of our audit, investigative and related work in 
these and other areas is not simply to identify problems, but 
to recommend improvements and promote corrective action. Since 
2002, my office has issued six reports on the Department's 
audit resolution and follow-up processes, each noting problems 
with ineffective internal controls, lack of staff and training 
to conduct resolution activity, and a lack of organizational 
priority placed on audit resolution.
    Our most recent audit, issued in 2012, found that 90 
percent of the external OIG audits issued in the three year 
period we looked at had not been resolved within the six-month 
deadline mandated by OMB. Over half of these were overdue for 
resolution by an average of over 1,000 days and included 
questioned costs of $568 million. Because the Department did 
not act, it lost the opportunity to recover $415 million of 
these questioned costs as a result of the statute of 
limitations.
    The results of our work, whether it is audits, inspections, 
or investigations, can serve as a tool for the Department 
management and its daily operations, long-term strategic 
planning, and overall risk management. However, our work is 
effective only if the Department implements timely corrective 
action to address identified deficiencies or weaknesses. We are 
aware that the Department is planning to take steps to improve 
its audit resolution and follow-up processes, as the deputy 
secretary indicated, particularly in response to our recent 
audit, and we will closely monitor and report on this progress.
    This concludes my statement and I am also happy to answer 
questions.
    [Prepared statement of Ms. Tighe follows:]


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    Chairman Issa. Thank you.
    Mr. Porcari.

           STATEMENT OF THE HONORABLE JOHN D. PORCARI

    Mr. Porcari. Chairman Issa, Ranking Member Cummings, and 
members of the committee, thanks for holding the hearing today. 
At the Department of Transportation, we take great pride in 
being good stewards of taxpayer dollars. We are always looking 
for ways to improve transparency, cut waste, and increase 
efficiency. This is a duty that we take seriously and it is 
something that we focus on every day. I am pleased to join you 
today to discuss our efforts to implement recommendations from 
the Department's Office of the Inspector General.
    But before I discuss the OIGs recommendations, I would like 
to touch on a topic that is on everyone's mind earlier: 
sequestration. Sequestration went into effect Friday. It is 
going to have serious impacts on the transportation services 
that are critical to the traveling public, our cities, and our 
national economy. Sequestration will cut over $650 million from 
funds recently provided through the Disaster Relief 
Appropriations Act of 2013, which is helping us to rebuild 
critical transit systems, as well as roads and bridges, in 
States hardest hit by Hurricane Sandy. The brunt of these cuts 
will be felt in our work to strengthen our critical transit and 
rail infrastructure in the face of future natural disasters.
    Sequestration will also cut over $600 million from the 
Federal Aviation Administration and, as a result of these cuts, 
the vast majority of the FAA's nearly 47,000 employees could be 
furloughed for up to one day per pay period until the end of 
this fiscal year.
    What does this mean for the traveling public? Safety is our 
top priority, and we will allow only the amount of air traffic 
we can safely handle to take off and land, which means 
travelers should expect delays. Flights to major cities like 
New York, Chicago, and San Francisco could experience delays of 
up to 90 minutes during peak hours because we will have fewer 
controllers on staff. Delays in those major airports will 
ripple across the Country.
    In addition, we have notified communities across America 
that we are likely to close over 100 air traffic control towers 
at airports with fewer than 150,000 flight operations per year, 
and to eliminate midnight shifts in over 60 control towers 
across the Country. These are harmful cuts with real-world 
consequences that will cost jobs and hurt our economy.
    It is important to remember that our deficit challenges 
cannot be addressed by cutting waste and improving efficiency 
alone. The President has put forward a solution to avoid these 
cuts and we need Congress to come together to work on a long-
term, balanced solution to our deficit challenges.
    At DOT we have worked very hard to implement 
recommendations from the Office of the Inspector General, and 
the truth is we have made great progress. DOT has established 
sound systems for interacting with the Office of the Inspector 
General which have enabled us to close 505 audit 
recommendations during calendar year 2012. Our efforts resulted 
in over $1 billion in program funds recovered, reprogrammed, 
offset, or put to a better use. This represents a 19 percent 
increase in the number of recommendations closed, compared to 
the previous year, and 58 percent more than DOT closed in 2009.
    DOT's success is based on a systematic approach that uses 
objective metrics for measuring performance and a sustained 
effort by the Department's top management. We are making 
significant progress on a range of recommendations, such as the 
Department's chief financial officer has issued new 
requirements, conducted training and put in place the systems 
to better ensure that unused funds associated with grants are 
de-obligated based on regular and systemic reviews. The Federal 
Railroad Administration has made significant progress on 
implementing a national rail plan. The Federal Motor Carrier 
Safety Administration has begun to draft a proposed rule that, 
if finalized, will further enhance the safety of passenger 
motor carriers. The notice of proposed rulemaking is scheduled 
to go out for public comment this spring.
    Finally, the Federal Aviation Administration has made 
tremendous progress on moving forward with NextGen, which 
maximizes the benefits of a GPS-based surveillance and 
navigation system. NextGen is one of our generation's greatest 
infrastructure investments and it is underway right now. As 
part of our efforts to streamline airways, airplanes 
approaching the Washington, D.C. area, for example, started 
using satellite routes in August. On these routes alone, it 
saved 760,000 gallons of jet fuel per year.
    These are just a few of the areas where DOT has 
demonstrated its commitment to good stewardship of taxpayer 
money and to working effectively with our Office of Inspector 
General. We will continue to carefully review all of the 
inspector general's recommendations and we will continue to use 
an innovative and results-oriented system to improve 
transparency, cut waste, and increase efficiency.
    Thank you for the opportunity to appear today. I too will 
be happy to answer your questions.
    [Prepared statement of Mr. Porcari follows:]


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    Chairman Issa. Thank you.
    And in anticipation that there is an A B relationship in 
these opening statements, Mr. Scovel.

        STATEMENT OF THE HONORABLE CALVIN L. SCOVEL III

    Mr. Scovel. Chairman Issa, Ranking Member Cummings, and 
members of the committee, thank you for inviting me here to 
discuss opportunities for maximizing efficiency at the 
Department of Transportation.
    Each year we recommend hundreds of actions aimed at 
improving DOT programs and operations, and the Department works 
with us to fully implement them. Currently, more than 500 
recommendations remain open. My statement today will focus on 
10 that we have determined that are of the highest priority and 
that impact the Department's ability to ensure stewardship of 
its resources, implement transportation infrastructure programs 
while protecting its investments, and to enhance aviation and 
surface safety.
    DOT's ability to ensure effective stewardship of its 
resources has been limited by longstanding weaknesses in grants 
management and IT procurement and security. In November 2011, 
we recommended that DOT conduct quarterly reviews of inactive 
grant projects to ensure inactive obligations are liquidated in 
a timely manner. In response, DOT initiated a 60-day effort to 
review inactive, undelivered orders, which identified $2.1 
billion in funds for other DOT programs. We also recommended 
that DOT issue a policy requiring agencies to perform quarterly 
reviews and annual certifications of obligation balances.
    Last week, in response to our recommendation, the Deputy 
CFO issued a memorandum providing guidance on review of 
obligations in undelivered orders. Later in the year we will 
determine if this guidance helped the Department to correct a 
persistent, systemic problem with unliquidated obligations and 
to identify opportunities to free up funds for other 
priorities.
    Regarding IT procurement and security, we recommended that 
DOT develop its IT enterprise architecture to realize cost 
savings, reduce duplication of systems, and strengthen IT 
security through multi-factor identity authentication for all 
DOT employees and contractors. DOT plans to develop an 
overarching enterprise architecture by May 2013 and to 
implement an authentication mechanism by fiscal year 2016.
    Half of our highest priority recommendations concerned 
DOT's implementation of critical transportation infrastructure 
programs and the need to protect significant investments in 
these programs. To ensure FAA's complex, multi-billion dollar 
NextGen air traffic control program delivers promised benefits, 
we recommended that FAA establish an integrated master schedule 
for implementing new technologies and infrastructure. Without a 
master schedule, the agency cannot effectively address program 
risks, make informed cost and scheduled tradeoffs, or determine 
what capabilities should be delivered first to provide users 
with the greatest benefits. FAA is currently working on this 
master schedule.
    We also recommended that FAA ensure that cost estimates for 
realigning and consolidating air traffic control facilities are 
comprehensive and updated. While FAA concurred with our 
recommendation, it has scaled back its initial plan and is 
currently focusing solely on the New York area facility, for 
which it expects to provide a detailed cost estimate by the end 
of 2014. To completely implement our recommendation, FAA will 
need to produce detailed financial information regarding its 
longer term plans for facility consolidations in other 
locations.
    Our high priority surface related recommendations also aim 
to ensure the Department maximizes its infrastructure 
investments. First, we recommended that the Federal Highway 
Administration implement a data-driven, risk-based approach for 
preparing DOT and State agreements for overseeing $40 billion 
in highway funds provided annually to States. Second, we 
recommended that FHWA report regularly on States' efforts to 
improve the condition on the Nation's 140,000 deficient 
bridges. FHWA has begun to implement these recommendations and 
we will continue to monitor its progress.
    We also recommended that the Federal Railroad 
Administration complete a national rail plan to provide a 
framework for integrating passenger and freight rail across the 
Country and identify specific interstate corridor goals and 
measures of success. Delays in establishing a plan with clear 
stakeholder roles and performance measures could result in FRA 
investing billions of dollars in Federal grant funds without 
assurance that these efforts support national policy goals or 
reflect stakeholder commitment. FRA expects to complete the 
plan by June 2014.
    Finally, we identified two high-priority open 
recommendation that support DOT's number one priority, safety. 
While the Department's commitment to safety is clear, DOT needs 
to bolster its oversight by fine-tuning how it collects, 
verifies, and uses safety data. For FAA, we recommended that 
information on pilot domicile and commuting be collected and 
analyzed to better target solutions to reduce pilot fatigue. 
While FAA agreed with our recommendation, it has yet to 
complete a scan of available data and determine whether 
additional data could offer significant safety benefits.
    In terms of surface safety, DOT has acted to remove unsafe 
commercial drivers and carriers from roadways; however, in 
April 2012 we recommended that the Federal Motor Carrier Safety 
Administration publish a rule on passenger carrier leasing with 
requirements comparable to those for property carriers. FMCSA 
concurred with our recommendation and plans to issue a proposed 
rule in 2013.
    OIG is steadfast in its commitment to ensuring DOT achieves 
the highest return on the Nation's substantial transportation 
investments. We believe the Department shares this commitment 
with us, as evidenced by its many actions in cooperation with 
our office. We will continue to work with you, Mr. Chairman, 
the Department, and other key stakeholders to protect taxpayer 
dollars as we assist the Department in providing the American 
people with safe and modern transportation systems.
    Mr. Chairman, this concludes my prepared statement. I would 
be happy to take any questions that you or other members of the 
committee may have.
    [Prepared statement of Mr. Scovel follows:]


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    Chairman Issa. Thank you.
    I will recognize myself for a short round of questioning.
    Mr. Miller, well, maybe, Mr. Porcari, I will go to you 
first. Isn't it true that the FAA handled 23 percent more 
flights a decade ago than they do today, and they did it with 
less air traffic controllers?
    Mr. Porcari. Mr. Chairman, we have a very different traffic 
control system now.
    Chairman Issa. One of the deals around here is you answer 
the question I ask, then you give your ups and adds. So, 
please, isn't it true?
    Mr. Porcari. The volume of movements is less than the pre-
9/11 numbers. That is correct.
    Chairman Issa. Okay. Because one of the reasons we are here 
today, you have all, on both sides of the aisle, talked about 
sequestration, so I am going to focus my short five minutes on 
that question. If you have less flights and more air traffic 
controllers, very succinctly, what is your justification with 
all the so-called improvements, and I am a pilot of more than 
30 years, including using GPS, which is, by the way, as old, 
almost, as I am as a pilot and finally getting implemented? 
What is your justification for not gaining efficiency in the 
use of air traffic controllers?
    Air traffic controllers work very hard under great stress. 
That has been true since I first got my license. But the truth 
is navigation aids and a lot of other things in fact genuinely 
justify that the numbers should be less if these efficiencies, 
which we are paying dearly for, are implemented.
    Mr. Porcari. In short, Mr. Chairman, the system that we 
operate today, primarily because commercial airline operations 
are very different than they were even 10 years ago, is 
significantly different. The hub and spoke operations are 
concentrated in fewer places, much higher volumes. The 
congestion that we have in our major hub and spoke operations 
is higher than it has been in the past. And on the general 
aviation side, while general aviation continues to do well, the 
patterns are different as well.
    Chairman Issa. My time is short and I want to get to all 
the witnesses. Look, I am a private pilot. There are less of us 
today than there were a decade ago. The fact is the number of 
aircraft in use, that are actually flying, is not going up, it 
is going down. It has been an industry in challenge for a long 
time, and as somebody who counts on air traffic controllers, 
but the implementation of things, including areas that 
essentially route or forbid private pilots do not justify that.
    So the other thing, quite frankly, is I do believe you put 
air traffic controllers into places in excess of where they 
were really demanded. So telling me that some small airports 
are going to lose air traffic controllers, as a general 
aviation person, begs the real question of, yeah, isn't it in 
some cases about time?
    Mr. Miller, we sent letters to everyone, including your 
boss, asking specifically for areas that, this was on February 
28th, where you would like to make changes, reprogram, 
essentially, drop programs. So in your testimony, when you said 
that you were going to be forced to drop programs, you weren't 
going to be able to do it, do you know if Secretary Duncan has, 
in fact, prepared a response? Because I made it clear that I 
would sponsor legislation immediately, on a case-by-case basis, 
to give him that specific changes, deletes, and so on; he 
wouldn't have to wait for the CR. And I, by the way, also sent 
one to Mr. LaHood.
    Mr. Miller. So we will be preparing kind of the formal 
response to the mechanism. I think our challenge is this, and 
the Secretary and I have spoken about this directly, the bulk 
of our programs go to poor kids, students with disabilities, 
students in Indian Country on reservations, students on 
military or close to military bases. And the real question is 
which of those students aren't you going to serve. It is a 
selfish choice.
    Chairman Issa. Okay. But for 18 months, since the President 
signed sequestration, there was an agreement in sequestration 
not for a tax increase, but for a cut. There was an agreement 
in the tax increase in January that we were having a tax 
increase. Nobody said, oh, by the way, sequestration is going 
to be another tax increase.
    So one of the challenges we face here is 18 months after 
the President signed sequestration, and I am not one of those 
people that wants to figure out chicken or egg on who came up 
with it; that is for Mr. Woodward and others. The fact is the 
President signed it, he signed it on your behalf. Your boss 
agreed to these cuts. And it is surprising to me that I am 
still being told that nobody knows where the cuts are.
    Briefly, Mr. Porcari, I would ask, in Hurricane Sandy 
relief, which you mentioned prominently, do you believe that 
out of that $50 billion, when you need to make these Draconian 
cuts, that perhaps the pay raises for FBI that were included in 
there of $10 million, could be stripped out; the $2 billion for 
road projects not anywhere in the affected area of Hurricane 
Sandy could be stripped out; or the $500 million for weather 
forecasting to create ocean zoning plan, at least for now, 
could be stripped out of this emergency and have no direct 
affect on Hurricane Sandy victims?
    Mr. Porcari. I would first comment on the road part of it. 
What Congress was doing with that appropriation is actually 
paying for some of the past disasters that were the emergency 
relief funding for the Federal Highway Administration had not 
been previously appropriated. Those went to previous emergency 
relief activities. We are proud of and believe that we are 
wisely spending every penny of the Hurricane Sandy Relief Fund 
that has been appropriated to us.
    Chairman Issa. And I will give the same amount of time to 
the ranking member.
    I will tell you that, when I drove over the Nevada line up 
to Lake Tahoe just a few weeks ago, I saw a brand new, brand 
new sign that gave credit being put in to the stimulus, in 
other words, to the Recovery Act. It was being put up two weeks 
ago, three weeks ago, when we were driving through in the snow. 
It is amazing to me that, with that money still being spent, at 
least according to the sign and the dollars being spent, that 
every time there is a request for a cut there is no money and 
it is overdue. This is one of the challenges we face, is if you 
don't do the $67 billion, or some portion of it that we believe 
can be cut out of waste recognized by the IGs, and every 
program you have is essential, then you are telling us that 
only tax increases of nearly double on the American people will 
in fact solve our deficit.
    With that, I recognize the ranking member for seven 
minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Scovel, you heard the response of Mr. Porcari with 
regard to the chairman's question with regard to airports and 
air traffic controllers. Are you aware of all this, what he 
just said, that there is a different situation than what it was 
10 years ago? I mean, do you agree with the answer or do you 
have enough information to answer what I just asked you?
    Mr. Scovel. Thank you, Mr. Cummings. I can agree with parts 
of it. It is a different air traffic control situation that we 
have today than it was 10 or more years ago. But it is also a 
fact that the number of operations has decreased markedly from 
what it was 10 or more years ago.
    Mr. Cummings, we have a project underway in my office, at 
the request of Congress, to examine air traffic controller 
productivity, and I think that is what the chairman's ultimate 
question goes to. That project is underway. I don't want to 
prejudge the results but, of course, we will be reporting to 
House T&I and also to this committee when the review is done.
    Mr. Cummings. So, do you agree with the chairman that, and 
I don't want to put words in his mouth, I am just trying to 
remember what he said, that maybe the distribution of air 
traffic controllers is not the most efficient and effective way 
to use them?
    Mr. Scovel. That is a possibility. We have examined FAA's 
air traffic controller workforce for a long time and we have 
offered, in the past, recommendations to the agency for how it 
could analyze the composition and also the distribution of its 
controller workforce, because we have found problems in that 
area in the past.
    Mr. Cummings. And, Mr. Miller, can you please tell us the 
total amount of cuts the Department of Education is now facing 
as a result of sequestration?
    Mr. Miller. Well, the impact of our programs is about $2.5 
billion.
    Mr. Cummings. I understand that about $722 million is in 
cuts to Title I?
    Mr. Miller. Yes. And about $600 million in special ed 
programs.
    Mr. Cummings. And you said it is a Sophie's choice, when 
you were answering questions. I guess this is what I am getting 
to. You hear two sides of these questions, and this is where I 
am trying to go to, Mr. Scovel. There seems to be some people 
have the opinion that when these cuts are made, the cuts are 
made to things that they don't have to be made to; in other 
words, that you have some fat somewhere else that you could cut 
and not affect, say, programs for kids like me when I was 
growing up in special ed. So I am just wondering. Tell me about 
that. Explain that to me. Is this something mandated or what?
    Mr. Miller. So the reality is our programs are focused on 
those who are most needy.
    Mr. Cummings. Yes.
    Mr. Miller. And that is the bulk of our program funding. 
And in an environment where we have fallen behind the world, we 
are 16th in the world in terms of college graduates.
    Mr. Cummings. Marching towards a third world nation.
    Mr. Miller. We are 25th and 17th in terms of math and 
science preparation of our 15-year-olds. And you look at the 
direct investment in education and how that impacts GDP, how it 
impacts employment, how it impacts earnings, and the research 
is pretty compelling that the quality of education, it is clear 
that investing in education is critical.
    Mr. Cummings. But this is my question.
    Mr. Miller. Which is the tradeoff. We have no choice.
    Mr. Cummings. My question is, again I'm going back, is 
there some way that, when you have sequestration under the 
circumstances we have them right now, that you could avoid the 
cuts in these areas?
    And, Ms. Tighe, you can chime in if you want. I just want 
to know, because the implication is that maybe the 
Administration is trying to just zero in on things that are 
going to be most_ get the headlines or whatever, and I am just 
trying to figure out how strict this situation is.
    Mr. Miller. Simply put, it would be that is where the money 
is, the money is in these programs. There are no alternatives.
    Mr. Cummings. Ms. Tighe, do you have a comment on that?
    Ms. Tighe. Well, I would agree that sequestration, in its 
across-the-board approach to cutting, is going to leave many 
things unfunded, even things that you don't want. And since 
Title I and special ed and those monies are the bulk of the 
Department's monies, yes, that is where you are going to see 
the cuts. I think a better approach would be looking at other 
ways of reducing funding. I mean, part of this hearing was 
looking at the recommendations we make. The deputy secretary 
brought up the issue of there are programs, there are 200 
programs in the Department of Education; not all of them are 
big money programs. But why shouldn't we look a little more 
thoroughly and holistically at what programs might duplicate 
each other? Let's get to the point where we have a duplication 
within the Department and between the Department and other 
departments that focus on education things. Why can't we look 
at that as a Government and make cuts there?
    Mr. Cummings. So, in other words, go through those 
programs, the ones that are not getting the most bang for the 
buck, either reduce or eliminate those to free up money for the 
others, is that right? Is that what you are trying to say?
    Ms. Tighe. Yes.
    Mr. Cummings. So there is some leeway, then, if these 
recommendations were, with this sequestration that we are going 
through right now, there is some leeway if we were to do these 
things?
    Ms. Tighe. Oh, I don't think there is leeway with 
sequestration.
    Mr. Cummings. I am talking about this one right now, what 
we are going through right now.
    Ms. Tighe. Yes. Right now I don't think there is leeway. I 
mean, we are all facing, including my office, across-the-board 
cuts.
    Mr. Cummings. What kind of cuts are you facing?
    Ms. Tighe. I am facing I believe $3 million, my somewhat 
small appropriation. I am going to be furloughing all of my 
employees for about 10 to 11 days, including for myself on 
down, if the sequestration continues through the end of the 
fiscal year. We have cut out our IT support contract for IT 
security, our FISMA work, and we are going to cut the support 
we give for our risk modeling work, and we have told four 
internal employees they need to leave at the end of the month, 
and cuts like that.
    We have greatly reduced travel, which is really very much 
impacting. When you are a criminal investigator and auditor, 
you have to travel to do your business. So I am having to make 
choices in what cases we open and what audits we do.
    Mr. Cummings. I see my time is up. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    Mr. McHenry.
    Mr. McHenry. I thank the chairman. I yield to my colleague 
from Ohio, Mr. Jordan.
    Mr. Jordan. I thank the gentleman for yielding.
    Thank you, Mr. Chairman, again for this hearing.
    Mr. Miller, I just want to be clear what the chairman's 
earlier questioning. You have not responded to the chairman's 
letter sent last week?
    Mr. Miller. I believe the letter was received on the 28th. 
I got notice of it upon my return on Monday. So, no, those 
wheels are turning, but I don't believe a formal response has 
been submitted.
    Mr. Jordan. Tell me when sequestration passed, when that 
became the law. Do you know when that was?
    Mr. Miller. Friday.
    Mr. Jordan. No, no, no, when the legislation passed 
requiring sequestration to take effect. Do you know when that 
was?
    Mr. Miller. I don't remember the exact date.
    Mr. Jordan. August 2nd, 2011, 19 months ago. Have you not 
been doing any planning? It seems to me, when you get a letter 
from the chairman about sequestration, you have had 19 months 
to start planning and getting ready for it. In fact, you should 
have been ready for it, if you took some time, you should have 
been ready for it in December, because it was supposed to hit 
January 1st and was suspended for two months. It would seem to 
me you would have the response ready to go just like that and 
you could get right back to the chairman. So you guys didn't 
start planning for this until the last couple weeks?
    Mr. Miller. We planned on the implementation of sequester, 
and that has been quite consuming, actually.
    Mr. Jordan. Well, how long have you been planning for it?
    Mr. Miller. We have been planning on the implementation of 
sequester in varying degrees since the beginning of the year.
    Mr. Jordan. Why not before that? It passed August 2nd, 
2011.
    Mr. Miller. Because, at least I interpreted the press, like 
you, it was both parties and the Administration, both members 
of Congress thought that it would not be going into effect.
    Mr. Jordan. Let me go to the statement that the secretary 
made, the now famous statement: It just means a lot more 
children will not get the kinds of services and opportunities 
they need, and as many as 40,000 teachers could lose their 
jobs. There are literally teachers now who are getting pink 
slips, who are getting notices they can't come back this fall. 
Do you know where the secretary got that information, when he 
made that statement, what information he was basing that 
statement on?
    Mr. Miller. Yes. The issue of the 40,000, which is a 
recognition that the bulk of funding goes to personnel costs 
and the 40,000 does represent an estimate of, if that was 
translated directly with the current funding splits.
    Mr. Jordan. All I am asking is did you guys do some study, 
were you guys given any information saying this is going to 
happen, we have surveyed schools across the Country, surveyed 
some of the military schools, some of the schools in Indian 
reservations you referenced, did you survey those or did you 
just sort of make this up?
    Mr. Miller. No, we would be precluded from that.
    Mr. Jordan. So how did you base that, how could he make 
that statement?
    Mr. Miller. Again, we have an understanding of the cost 
structures from our historic work with at the State, at the 
district, and at the school level. We understand the basis of 
the cost structure. So when the question is asked how might 
this translate to the impact, we can say, if consistent with 
the current allocation of fund, as it is today, this is what it 
would translate to.
    Mr. Jordan. So this was a guess. You said how this might 
translate. This was a guess that the Department made and 
portrayed to the American people as fact.
    Mr. Miller. No, I thought we have been very clear about 
might and that, if translated, this is the impact it could 
have. And I think that remains true today and I think there are 
examples, both in anticipation of sequestration up to now and 
going forward.
    Mr. Jordan. Excuse me. This doesn't say might, this says 
there are literally teachers now who are getting pink slips, 
who are getting notices they can't come back this fall. Is that 
true?
    Mr. Miller. I believe the secretary has already said he 
spoke inaccurately and tried to correct that statement. But 
what is true is the potential impact of up to potentially 
40,000 jobs, as translated with the current spending package.
    Mr. Jordan. Is there anything in writing that was given to 
the secretary before he made this statement, anything in 
writing to say you can say this, we think this is going to 
happen? Anything in writing or just conversation that took 
place at the Department?
    Mr. Miller. I can't speak specifically to what the review 
materials the secretary had.
    Mr. Jordan. Was The Washington Post accurate when they gave 
four out of four Pinocchios to the secretary's statement? Were 
they accurate or do you think they were wrong?
    Mr. Miller. I would presume that The Washington Post did 
what they thought was consistent with their reporting 
practices. I also know that in a follow-up story today they 
have also said that there is an impact of sequestration likely 
on jobs, so I would believe both accounts from The Washington 
Post.
    Mr. Jordan. Mr. Porcari, Mr. LaHood said flights to major 
cities like New York, Chicago, San Francisco, and others could 
experience delays up to 90 minutes during peak hours because we 
have fewer controllers on staff. Now, Mr. Meadows tells me last 
week, in Transportation and Infrastructure Committee, that the 
FAA administrator admitted under questioning that the 90 minute 
delays in major cities was not based on any data or study. Is 
that true? Same question to Mr. Miller. Do you have any study, 
any data that says we know for sure this is going to happen? 
Because I flew this week and it didn't happen to me.
    Mr. Porcari. We know some of the specific impacts. Chicago 
would be a good example. By having less controllers on duty, 
Chicago has two towers, we would not be able to man the north 
tower, which means one runway would be out of operation.
    Mr. Jordan. The question is is there any study that 
indicates this in fact is going to be the case? And, if so, was 
the FAA administrator misleading the Transportation and 
Infrastructure Committee last week when he said there is no 
data or study that indicates this is going to be the case?
    Mr. Porcari. Both the administrator and the secretary were 
pointing out that it is difficult to measure precisely until 
the cuts are in effect. We know it will have a significant 
impact, and the primary impact will be on our busiest airports.
    Mr. Jordan. So once again it was a guess. We have two 
secretaries, Secretary of Education and Secretary of 
Transportation, guessing, suggesting without data or any study 
to support, that these effects were going to happen; and we 
have The Washington Post calling the Secretary of Education, I 
won't use the term, but we have The Washington Post saying that 
he misled the American people to the tune of four out of four 
Pinocchios.
    Mr. Porcari. We believe those are reasonable estimates 
based on what we know now. We know the operational impacts will 
be significant.
    Mr. Jordan. When did you guys start planning for the 
sequester? Did you start planning, like I think a good 
administrator, a good planner, a good leader would do, did you 
start planning in August of 2011, when this bill first passed?
    Mr. Porcari. We were well prepared for January 1st.
    Mr. Jordan. Did you start planning then?
    Mr. Porcari. We started planning in the fall.
    Mr. Jordan. Okay.
    Mr. Chairman, I yield back.
    Chairman Issa. I thank the gentleman.
    We now go to the gentlelady from California, Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    Mr. Miller, the IG reports that through 2010, 90 percent of 
their audits that they issued since 2007 have not been resolved 
within six months, 53 of those audits were overdue by an 
average of almost three years, including questioned costs of 
$568 million. So due to the running of the statute of 
limitations, it appears that costs questioned by the IG in its 
audits, the Department lost the opportunity to recover $415 
million of costs.
    Two years later, in January of 2012, 42 percent of those 
audits were still unresolved.
    So my question to you is is that acceptable performance by 
the Department?
    Mr. Miller. I think we are in agreement with the IG that we 
need to improve our ability to resolve audits in a more timely 
way, including through the completion of the corrective action 
plans. It is directly why we have taken a number of steps, most 
recently with the formulation of a dedicated task force. We 
have already had a 30 percent, actually, a 33 percent reduction 
in the backlog, and we should take that backlog to zero in the 
course of this fiscal year.
    Ms. Speier. But you would agree that you have lost the 
opportunity to recover $415 million in costs?
    Mr. Miller. We wouldn't agree with that specific statement. 
Broadly stated, the opportunity, when you actually look at the 
recovery, that becomes the total potential, of which generally, 
based on finding, I mean based on what is in the public's 
interest, the actual amount, even when we do have timely 
recovery, is typically a fraction of the total potential costs. 
So I would not want to leave an impression that the $400 
million-ish figure was in fact the amount of recovery that 
would have happened. That would be inaccurate.
    Ms. Speier. Inspector Tighe, do you have any comments?
    Ms. Tighe. I would agree that we probably wouldn't have 
seen a recovery of $415 million. Part of our point is when you 
let the statute of limitations run, you have no opportunity to 
do anything.
    Ms. Speier. Exactly.
    Ms. Tighe. A lot of that money did involve school districts 
and other State and local entities, who we know aren't richly 
funded at the moment. On the other hand, part of the problem is 
not just the money, it is the fact that, when you don't resolve 
the audit at all, you also lose the opportunity to work with 
the States and other jurisdictions to put in internal controls 
to make sure they are spending that money wisely. So you really 
lose a number of opportunities.
    Ms. Speier. Thank you.
    Mr. Miller, how much money do you spend, what resources are 
expended in the suspension and debarment process in the 
Department?
    Mr. Miller. I don't have that specific kind of allocation 
because, again, that would be an allocation of individuals that 
are across multiple functions. But we could follow up and get 
that specific investment we are making on the suspension and 
debarment specific process.
    Ms. Speier. All right, if you would get that to the 
committee, that would be helpful. Have any grantees or 
contractors been suspended or debarred in the past three years?
    Mr. Miller. Yes. We have had 150 debarments through 2010, 
and I believe that number has increased since.
    Ms. Speier. And for what kinds of offenses?
    Mr. Miller. It has been for a range of offenses. Again, we 
could give you a breakdown of those in a follow-up.
    Ms. Speier. All right, would you provide that? And have any 
of these individuals been debarred permanently?
    Mr. Miller. That, I can't answer specifically.
    Ms. Speier. Would you provide that as well?
    Mr. Miller. Of course.
    Ms. Speier. Inspector, do you have some comments on that?
    Ms. Tighe. Yes, I do. I think the Department has tried to 
make improvements in its focus on debarment, especially in the 
non-procurement area. As far as grantees, usually the grantees 
themselves are certainly people associated with grants that 
have been debarred, based often on our criminal investigative 
work. To say grantees themselves are debarred I think may be 
overstating; usually the Department doesn't debar a whole 
entity, it will take individuals out of that entity. But I 
think that the Department still faces challenges in making its 
suspension and debarment process effective. We did an 
inspection report on it last year that highlighted some issues.
    Ms. Speier. All right, thank you.
    I yield back.
    Chairman Issa. Would the gentlelady yield to me for just a 
second?
    Ms. Speier. I certainly will.
    Chairman Issa. Following up on the gentlelady's question, 
Ms. Tighe, the $415 million, would it be fair to say that, if 
you had every one of those in a situation in which you were 
negotiating with the excess recipient, that the future savings 
by not having this repeat would certainly be as great as that 
$415 million? In other words, the behavioral change would be 
the ultimate goal, in addition to any recovery?
    Ms. Tighe. Absolutely. I think we have not quantified the 
fact that you can save money over the long haul by putting 
internal controls into place.
    Chairman Issa. Thank you.
    Ms. Speier, I think you were exactly on the right line. I 
appreciate your yielding.
    With that we go to Mr. Jordan, a returning star, is 
recognized.
    Mr. Jordan. I don't know about that. Thank you, Mr. 
Chairman.
    Mr. Porcari, some members of both the House and Senate have 
said that Mr. LaHood's dire warnings aren't backed up by 
financial data, where I was questioning you before, and they 
suggested that the FAA could, instead, cut $500 million it 
spends each year on consultants and $200 million it spends on 
supplies and travel. I know this is the FAA, but do you think 
that is something we can focus on?
    Mr. Porcari. We could not achieve the savings that way, and 
I would be glad to document why. Let me first point out what 
the sequester means. Two-thirds, basically, I am sorry, three-
quarters, 74 percent of our Department is exempt from the 
sequester, which means that the sequestration cuts fall 
disproportionately on a portion of the Department, primarily 
the Federal Aviation Administration. That 5 percent cut, 
because we are partway through a fiscal year, is equivalent of 
a 9 percent cut.
    Mr. Jordan. But my question is, does the FAA part of your 
budget spend $500 million a year on consultants and $200 
million a year on supplies and travel? Yes or no?
    Mr. Porcari. Those categories do exist. What is in those 
categories is important.
    Mr. Jordan. Let me ask it another way. Ms. Speier and I are 
working on a piece of legislation. We discovered this two weeks 
ago in this committee, that we all remember the GSA junket to 
Las Vegas, where they spent $600 per day per attendee, $3,000 
per attendee per conference, and if you use that as a 
benchmark, 183 times various Federal agencies have exceeded 
that mark in various conferences they have attended. I am not 
sure what the number was for Transportation; I do remember 
Defense was over 50 times that they had exceeded that 
benchmark.
    In the past year, has the Department of Transportation held 
conferences around the Country and have folks attended?
    Mr. Porcari. We have and we have dramatically scaled that 
back.
    Mr. Jordan. How many? How many?
    Mr. Porcari. I would be happy to get you the exact number.
    Mr. Jordan. Do you know if you were above or below the 
benchmark? Did you spend more than $600 per day per attendee, 
more than $3,000 per attendee per conference?
    Mr. Porcari. We stay within the per diem requirements.
    Mr. Jordan. Will you check on that, we can get that 
information, if Transportation was above or below the 
benchmark?
    Mr. Porcari. I would be happy to get that for you.
    Chairman Issa. Mr. Jordan, would you yield for just one 
second?
    Mr. Jordan. I would be happy to yield to the chairman.
    Chairman Issa. When you said per diem, that is how much the 
individual gets paid. What the gentleman was asking is about 
how much was spent. And the GSA scandal was not about per diem.
    Mr. Porcari. Mr. Chairman, what I am referring to is also 
the per diem rate for hotels, what people are spending on hotel 
rates.
    Mr. Jordan. How many conferences did you spend Department 
of Transportation employees to last year?
    Mr. Porcari. I would be happy to get you that. I will tell 
you that I have been personally reviewing and approving 
conferences.
    Mr. Jordan. You don't know that information? As much as it 
has been in the news with GSA, with the hearing we had two 
weeks ago, 183 times we have used that number, and you don't 
know that information?
    Mr. Porcari. I will be happy to get it for you.
    Mr. Jordan. You come before the committee talking about 
sequestration and you don't know how many conferences you went 
to?
    Mr. Porcari. Because we have already achieved the savings 
we think we can achieve on the conference issue.
    Mr. Jordan. Well, maybe we would disagree with that, and we 
would like to have that information in front of the committee.
    Mr. Porcari. I would be happy to get it for you. That was 
last year's cuts.
    Mr. Jordan. You might think you have achieved it, but maybe 
the American taxpayer doesn't. That is why we have these 
hearings. That is what it is all about.
    Mr. Porcari. We are happy to make that public.
    Mr. Jordan. Mr. Scovel, do you know how many times they 
went on trips?
    Mr. Scovel. Chairman Issa requested that information from 
the Department. We have not audited it.
    Mr. Jordan. But do you know the number of trips?
    Mr. Scovel. Most certainly. Fiscal year 2010, total cost, 
$12,833,000. The number of conferences was 49.
    Mr. Jordan. Forty-nine conferences, 12 million bucks, but 
we are going to have 90-minute delays because of the sequester, 
right? We have to furlough FAA agents. That is the kind of 
stuff that just drives the American taxpayer crazy. And the 
fact that you know it, you know that information and the agency 
head doesn't is a problem.
    Mr. Porcari. If I may, the single largest FAA conference 
part of it, and that is the largest part of the Department, is 
actually safety training for our air traffic controllers.
    Mr. Jordan. I am not saying some of them aren't important. 
What I am saying is 12 million bucks and 49 times. That is 
something the American taxpayer wants to know.
    Let me move quickly if I can.
    Mr. Miller, do you know how many conferences you sent 
Department of Education employees to last year?
    Mr. Miller. It was roughly----
    Mr. Jordan. There is no roughly to it; there is a number. 
How many did you go to?
    Mr. Miller. No, we have a complete breakdown by size of 
conference.
    Mr. Jordan. Do you know how many? Was it 10, was it 49? Was 
it above 49 or below 49? Did you beat the Transportation?
    Mr. Miller. Below 49.
    Mr. Jordan. Below 49. Well, that is good.
    Ms. Tighe, do you know how many it was?
    Ms. Tighe. I am sorry, I do not, but I can certainly get 
that information.
    Mr. Jordan. Do you know the cost that they had for travel 
and conferences?
    Ms. Tighe. I know that we reviewed the costs as reported to 
this committee in earlier submissions and to the Senate, but I 
don't have that off the top of my head.
    Mr. Jordan. Mr. Miller, do you know, off the top of your 
head, how much money the Department of Education spent on 
conferences and travel last year?
    Mr. Miller. In total, I believe it was about $10 million. I 
know our largest conference, which would be the Federal student 
aid conference, came in at about less than----
    Mr. Jordan. How many employees do you have at the 
Department of Education?
    Mr. Miller. About 4,400.
    Mr. Jordan. Forty-four hundred.
    How many employees at the Department of Transportation?
    Mr. Porcari. Approximately 55,000.
    Mr. Jordan. Fifty-five thousand and they spent $12 million. 
Forty-four hundred and you spent $10 million? Maybe you weren't 
better. That is amazing.
    Here is the point. Instead of having the secretaries of 
these respective Federal agencies out scaring the American 
people, maybe cut back on the conference; maybe actually 
achieve some savings for the taxpayer and do things the way you 
are supposed to.
    With that, I yield back, Mr. Chairman.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentleman from Northern Virginia, Mr. 
Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    Gosh, if the American people wonder why it is hard to reach 
agreement on sequestration, perhaps that last round of 
questioning clears that up.
    Mr. Porcari, I wanted to give you an opportunity, without 
badgering you, to answer the question fully in terms of air 
traffic controller training, because there seemed to be some 
confusion between conferences and training. Would you care to 
explain what you were trying to get at before being 
interrupted?
    Chairman Issa. Would the gentleman yield for just a second?
    Mr. Connolly. Yes, Mr. Chairman.
    Chairman Issa. I would like to ask the clock be stopped. 
That is a question, fairly, that shouldn't come off your time.
    If you would finish the answer, I would appreciate it.
    Mr. Connolly. Thank you, Mr. Chairman.
    Mr. Porcari. Certainly. Thank you, Mr. Connolly. What I was 
referring to with our air traffic controllers is although some 
of the activities are technically listed as a conference, there 
is a safety agenda where they are basically getting updated 
education on safety activities and other vital parts of their 
role. We think that is a very important part of what they do. 
We also think it is management's responsibilities, mine as 
chief operating officer, to make sure they do that responsibly 
and they do that as cost-effectively as possible.
    So for the last year and a half we have been very carefully 
reviewing conferences, where, when, how many people go, and 
what the agenda is.
    Chairman Issa. Thank you.
    Mr. Connolly. Thank you, Mr. Chairman, and thank you for 
that courtesy.
    Mr. Porcari, if I could follow up on that. What kind of 
training are we talking about for air traffic controllers? I 
mean, is this just how to party, how to have a good time in Las 
Vegas? What kind of training is this?
    Mr. Porcari. This is serious safety training. For example, 
there are a number of new technologies that are deployed. We 
share safety data. There are day-long activities where they are 
having various safety briefings and updates and participation. 
What we are trying to build is a safety culture. And if you are 
familiar with safety management systems, it starts with the 
people and with a holistic approach to safety. We think the 
reason we have the safest air traffic control system and safest 
aviation system in the world is because we have the best 
trained safety experts, including our air traffic controllers.
    Mr. Connolly. And just to make sure we understand what you 
are talking about, training isn't for a lifetime; one has to be 
sort of refreshed with changes in technology, changes in new 
information, changes in technique. For example, we are getting 
ready, I hope, despite sequestration, to invest in the New Gen 
air traffic control system, which will absolutely expand safety 
over, for example, the Atlantic, but that requires some kind of 
training and understanding the technology involved. Would that 
be a fair statement?
    Mr. Porcari. It is a fair statement. The technology and the 
state-of-the-art is evolving very rapidly. And there was a 
previous question about the number of air traffic controllers 
today, as opposed to previous. I mentioned that the 
concentration of commercial activity is different than it was 
10 years ago. The other part of it that is very important is we 
are bringing our air traffic control community into the design 
and implementation of our NextGen system. That is a very staff-
intensive process. But some of the early stutter steps that we 
had with, for example, En Route Automation Modernization, or 
because, in my opinion, we developed a system without an 
integrated project team approach, did not have our controllers 
as part of the process. We are doing that now. It is a very 
staff-intensive process to do that.
    Mr. Connolly. And, presumably, that serves a public 
purpose.
    Mr. Porcari. It certainly serves a public purpose of 
safety, which is our number one priority.
    Mr. Connolly. Right.
    And, Mr. Scovel, as IG, do you take any issue with what Mr. 
Porcari has just said?
    Mr. Scovel. On the basis of our available data, sir, it 
appears to be accurate.
    If I could return to one of your earlier questions, and I 
do want to make sure that the record of this committee hearing 
is accurate, because I certainly don't want to be in a position 
to have misled the committee at all. When I spoke of the 
Department's earlier conference expenses for fiscal year 2010, 
I had also hoped to bring to the committee's attention that the 
Department reported to this committee for fiscal year 2011, 
having spent $3.4 million on 23 conferences for fiscal year 
2012, $668,000 for 11 conferences.
    Mr. Connolly. Okay.
    Mr. Scovel. So 2010 certainly appears to be an unusually 
high number. It has come down since then. As I mentioned 
before, these are not audited figures, but they had been 
supplied by the Department to the committee.
    Mr. Connolly. Thank you. I am sure the committee 
appreciates that.
    Mr. Porcari, real quickly, before my time runs out, and 
again I thank the chair for his graciously allowing you to 
finish your answer earlier. But you were accused of scaring the 
public. Will there be furloughs among FAA employees, including 
air traffic controllers, and will that affect flight patterns 
and delays at airports? Will there be furloughs of TSA 
employees and will there be furloughs in CBP, Customs Border 
Patrol agents, all of which could lead to delays at airports, 
yes?
    Mr. Porcari. Yes, there will be furloughs among the vast 
majority of our 47,000 FAA staff, including air traffic 
controllers. Because we can't impact safety, we have to reduce 
the aircraft volumes that can be processed at the most busy 
times. We know that will have a significant impact on 
reliability and on-time performance.
    Mr. Connolly. Thank you so much.
    And, Mr. Chairman, again, thank you for allowing the 
witness to answer the question.
    Chairman Issa. You are most welcome.
    We now go to the gentleman from Utah, Mr. Chaffetz.
    Mr. Chaffetz. Thank you.
    Talking about the Department of Transportation here, can 
you help me understand the formula as to how many days they are 
going to be on furlough? How many furlough days are there going 
to be and how did you come up with that number?
    Mr. Porcari. First, in terms of number, we are in the 
process right now of notifying our employees that they will be 
subject to a maximum of one furlough per two-week pay period 
through the end of the fiscal year, so, in other words, up to 
11. We have arrived at that by first looking at all other 
available savings, including what we can do with contracts.
    Mr. Chaffetz. So of the $2.7 billion, how many of the 
savings are you going to have in non-payroll-oriented savings? 
Where are you going to cut that is not payroll?
    Mr. Porcari. We are cutting back in a number of contracts. 
And, again, within the Federal Aviation Administration, one of 
the largest contracts is the contract tower program.
    Mr. Chaffetz. But looking for a value here, the dollar 
amount, if you have to save $2.7, how much of that is going to 
come from payroll, how much of that is going to come from other 
savings?
    Mr. Porcari. With the Federal Aviation Administration 
number, which, overall, the total sequestration number is just 
over $600 million, we are going to have information technology 
savings for fiscal year 2013 of about $36 million; we have a 30 
percent reduction in travel costs. We are literally looking at 
every single contract for the Federal Aviation Administration.
    Mr. Chaffetz. And I appreciate that you said that you 
started this in the fall, so here we are in March. So given, 
whatever, four, six months, how much is going to come out of 
payroll?
    Mr. Porcari. We believe, and I will get you that number, 
because it is a moving target, because as we get further in the 
fiscal year, we originally thought there would be far more than 
11 furloughs, and we think 11 is the outer number.
    Mr. Chaffetz. Okay, so we don't know the dollar amount. We 
are talking about maximum maybe 11 days for somebody over the 
course of a year. How did you come up with 90-minute delays? 
Where did that number come from?
    Mr. Porcari. The delay number comes from what we think can 
happen. Think of a bad weather day in New York or San Francisco 
or Chicago, and those types of delays that you typically get 
from weather activity we think that you will see because of the 
furlough activity. I use the example of Chicago O'Hare, where 
the airfield requires two towers. With one of them out of 
operation because of furloughs, we would actually have to take 
one of the runways out of operation. That is how we tried to 
measure the impact.
    The other thing I would mention is that the number of 
impacted hub cities we think can be fairly significant, and 
when any of those hubs are impacted, it disrupts the entire 
system.
    Mr. Chaffetz. The challenge that I have is when we say 
significant or big. It doesn't sound like much of a plan and 
some specificity. You are talking about $600 million. What I 
would love to know is the breakdown between the payroll costs 
versus the others. You talk about one day furlough, right, for 
every two weeks of work. Is that for the 47,000 employees at 
the FAA?
    Mr. Porcari. Yes, it is for the 47,000 employees that will 
be subject to it.
    Mr. Chaffetz. So how many of those 47,000 employees are 
actually going to be furloughed?
    Mr. Porcari. The vast majority of the 47,000 employees. The 
employees that work for some of the mandatory contract spending 
areas, like the airport improvement program, are not subject to 
it. Every thing but AIP within the FAA is subject to furlough.
    Mr. Chaffetz. What I would hope that you could give me, Mr. 
Porcari, is how long would it take you to give me some 
specificity on the questions we just asked? I appreciate you 
are coming to testify and you have lots of things you have to 
prepare for, but if you have a plan we would like to see it. 
And what I need to have is some specificity on those things I 
just went through. Is that fair enough? What is a fair amount 
of time?
    Mr. Porcari. Well, we have some preliminary numbers now. 
Again, we know that they will keep shifting, and I would be 
happy to provide those.
    Mr. Chaffetz. By?
    Mr. Porcari. By close of business today.
    Mr. Chaffetz. Thank you. Appreciate it.
    I yield back.
    Chairman Issa. When you include in that, would you also 
include, to the extent that you can, for both cabinet 
positions, any steps that could have or were anticipated being 
taken from the beginning of the fiscal year? Because, for 
scoring purposes, if you, for example, restrained hiring, you 
could have abated some of this starting sooner. And I would 
just like to know, to the extent that that was planned or done. 
Because I know it is a moving number and part of the moving 
number is things that were not spent that had been anticipated 
be spent.
    Mr. Porcari. We would be happy to do that. We have been in 
a hiring freeze at the FAA for some time, as well as travel 
restrictions.
    Chairman Issa. Right. And I would like to make sure all of 
that, including that which may have reduced the number, is in 
the record.
    Mr. Chaffetz. Mr. Chairman, if I could add to that list two 
quick things: the amount of bonuses that were given out this 
year and the number two is how much money you spent in Iraq and 
Afghanistan. Because there are 17 different agencies that are 
still spending money in Afghanistan and Iraq. If there are any 
dollars associated with that, I would appreciate if you would 
get back to us on that as well.
    Mr. Porcari. We would be happy to get you those numbers. We 
have not awarded bonuses this year.
    Mr. Chaffetz. Thank you.
    Chairman Issa. Thank you all.
    We now go to the gentlelady from Illinois, Ms. Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    Mr. Porcari, do you have data on how many aircraft land at 
O'Hare that are controlled by the north air traffic control 
tower every year?
    Mr. Porcari. Yes, we do, ma'am.
    Ms. Duckworth. And so you could tell me, if that were shut 
down, how many aircraft would not be landing on that closed 
runway based on past landings at that airport.
    Mr. Porcari. Yes, we can.
    Ms. Duckworth. Can you tell me how many aircraft takeoffs 
and landings and air traffic is controlled by the remaining 
tower at O'Hare every year?
    Mr. Porcari. We can get that as well.
    Ms. Duckworth. Wonderful. So can you also tell me how much 
more capacity there is on that remaining tower, should the 
north tower be shut down, that could be absorbed by the single 
remaining air traffic control tower as it stands?
    Mr. Porcari. We would be happy to. And, again, the same 
principles apply at numerous other airports as well.
    Ms. Duckworth. Wonderful. So then you would also be able to 
tell me, based on the capacity historic data on how many land 
at that north runway, if it shuts down, you know how many can 
get picked up by the other control tower, how many would not be 
able to be handled in a timely basis, correct?
    Mr. Porcari. Yes, we do. And what you are pointing out, I 
think, is very important because part of the estimating process 
for delays goes to historical patterns, whether it is for 
weather or any other throughput delays.
    Ms. Duckworth. Wonderful. Thank you. So as someone who has 
flown most of my adult life, as both a professional pilot, I 
thank you for the training that I, as a DOD pilot, received 
from the FAA at the safety conferences that I attended. It made 
me a far better and safer DOD pilot. And now that I am a 
general aviation pilot, I thank you for keeping me safe.
    In fact, I am going to be signing up for one of those 
training conferences on how better to speak with air traffic 
controllers in a busy air traffic control environment, so I 
look forward to attending that training in Chicago that is 
coming up.
    My question is really going to be towards Mr. Miller. Two 
weeks ago I had a meeting with the superintendents of schools 
in my district, who have been planning on what would happen if 
the funding were cut for Title I, as well as for special 
education funding, and they knew exactly how many people they 
were going to have to lay off, what it was going to cost them. 
Do you know, Mr. Miller, do you know how much money this 
Country spends on subsidies to the oil and gas industry every 
year?
    Mr. Miller. No, I am not familiar with that amount.
    Ms. Duckworth. It is $4 billion. Can you tell me what the 
cutting Title I education funding will cut from the Department 
of Education?
    Mr. Miller. It will cut $750 million.
    Ms. Duckworth. So, $750 million. And how about the cutting 
of special education funding?
    Mr. Miller. It would be another $600 million.
    Ms. Duckworth. Another $600 million. So instead of slashing 
education funding, you know, Democrats offered a balanced 
alternative that would have made sensible cuts in our Nation's 
spending to subsidize the oil and gas industries that have had 
record profits, but Republican House leaders have refused to 
allow a vote. If we could just cut spending on oil and gas 
subsidies, we would save $4 billion.
    I am concerned, Mr. Miller, that my superintendents of 
schools in my district told me that because there is the 
requirement that they provide services for students with 
special needs and also for special education funding, what 
would happen, actually, when that Title I funding is cut and 
when that special education funding, such as remedial reading 
tutors, is cut, they would still need to provide that, which 
means that they would actually cut services to the mainstream 
students.
    Can you speak a little bit about what this would do in 
school districts, to have to shift the pressure from students 
with special needs to mainstream students, and what this would 
do across the Nation if these cuts were to go through?
    Mr. Miller. There is a requirement in serving the needs of 
students with special needs is that they need to provide a free 
and appropriate education, so there is a minimum standard that 
is required. And as the Federal resources are compromised, then 
they need to ensure that they are still delivering against that 
standard, and that puts a strain on resources.
    It is also at a time when many districts like yours are 
investing in not just the basic services for those children, 
but they are investing in new instructional technologies that 
are going to be more effective at accelerating learning. They 
are having to deal with the expansions of students who don't 
speak English as their native language as they are putting in 
new data systems, as they are preparing for higher standards 
that are international benchmarks.
    So it is not only the loss of resource, but, frankly, the 
leadership that is being spent to do the budget manipulations 
is taking precious time to also plan from these other 
meaningful reforms. So really it is not just a cost impact, but 
it is really compromising the ability to improve our education 
system.
    Ms. Duckworth. Thank you, Mr. Miller. So could you tell me 
if you will be keeping data on what the sequestration cuts will 
do to educational programs across the Country? I know some of 
this is based on historic trends, and there has been discussion 
here of the lack of data. Will you be keeping data over the 
course of sequestration on what it does to funding education 
and also to what actually gets implemented across the Nation?
    Mr. Miller. We will continue to capture the data that is 
currently allowable. Of course, there are restrictions in terms 
of the types of data that we can capture, subject to our 
statutory authorities and regulatory authorities. Consistent 
with that we will be able to capture data so we can continue to 
understand the adverse impact that sequestration is having.
    Ms. Duckworth. Thank you so much, Mr. Miller.
    I am out of time, Mr. Chairman.
    Mrs. Lummis. [Presiding.] Mr. Walberg?
    Mr. Walberg. Thank you, Madam Chairman.
    And thank you to the panel for being here. I know you are 
taking some heat today, probably because of lack of some 
leadership at the top and some inaccurate, incomplete 
statements that have been made.
    But, Mr. Miller, let me ask you a question. The statement 
was made earlier by one of our committee members that we are 
dangerously close to being third world country status 
educationally. I am not sure of the accuracy of that, but 
improper payments in the Department of Education, Pell grant 
programs specifically, that exceeded the OMB threshold of $750 
million per year seemed to be a problem. In fact, in 2010, 
improper payments exceeded $1 billion. Mr. Miller, I ask you 
what steps has the Department taken to reduce the amount of 
improper Pell grant payments.
    Mr. Miller. We have taken a number of steps. First of all, 
what I would like to highlight is that the rate of improper 
payments has dropped significantly.
    Mr. Walberg. Well, I am glad for the rate, but it is still 
improper payments taking place. I guess I am asking what are 
you doing to stop it? What steps have been taken?
    Mr. Miller. And I think it is important because, again, the 
rate, and I am going to answer the question, the rate is 
important because it speaks to the impact that the steps we are 
taking are having, because, again, as the number of Pell grants 
has grown dramatically, the actual percentage that are subject 
to improper payment has been decreasing.
    We take a number of steps to work specifically with our 
financial aid officers in each of our schools to work to better 
ensure that we have the right students taking out the right 
amount of loans, again, subject to the statutory constraints 
that we have; we are working with our IG to better understand 
where there is potential risk of inappropriate actors, so we 
are not meeting our eligibility requirements; we, specifically 
on the front end with our FAFSA, which is the vehicle by which 
students apply for and qualify for aid, we work with the IRS to 
put in income verification to minimize the risk that 
inappropriate aid would be granted.
    Mr. Walberg. Why are so few using the IRS tool?
    Mr. Miller. I would not characterize that so few are using 
the IRS tool. It is not as much as we would like, and that is 
one of the things we are trying to continue to promote.
    Mr. Walberg. Go on.
    Mr. Miller. So those are the types of actions that we are 
taking to reduce the rate of improper payments.
    Mr. Walberg. Any additional actions you are contemplating 
taking? The rate may be going down, but we have gone up in 
dollars. Most recent dollars that we went up was over $1 
billion.
    Mr. Miller. In total. Again, that is a net. So we are as 
concerned because part of this is both overpayments and under-
payments. So we are continuing to address both. We are 
concerned about borrowers to the degree that that is a concern, 
and we are trying to impact where it allows us to better 
recover funds for the Federal Government.
    Mr. Walberg. Inspector Tighe, let me address the same 
concern there. As you explained in your statement, some of 
these payments occur when applicants fraudulently report false 
income information to receive grants. Is the fraudulent 
reporting of false income information the main cause for the 
improper payments or has your office identified any other 
reasons?
    Ms. Tighe. Oh, I think that is one reason, but by no means 
the only reason, which is why I think that the Department's 
actions and the income match are going to inevitably be limited 
in helping improper payments. Let me speak a minute about the 
IRS DRT which Deputy Secretary Miller talked about. The problem 
there is we don't think anyone who wants to defraud the 
Government is going to pick the IRS data retrieval system.
    So what is the Department doing to manage those students or 
those applicants, shall we say, some of whom might not really 
be students and who aren't otherwise chosen for verification by 
schools of their information, their application information? 
What is the Department doing to fix that problem?
    Mr. Walberg. What are they doing? What have you found?
    Ms. Tighe. Well, we haven't found that they are doing 
anything. I would also like to highlight that we do have a 
problem with how the error rate is being calculated, to begin 
with. We do recognize it has gone down, and I think it shows 
that there has been some modest success in the IRS DRT match. 
But I think that the way the error rate is calculated is really 
just based on a statistical study with the IRS based on income. 
There is also fraud related to the number of dependents and a 
number of other issues like that that can happen.
    Mr. Walberg. When we talk about the other issues related to 
$750 million that could go towards special needs programs, $650 
million, when we have $750 million and now over $1 billion of 
fraud, wasted revenue going to education, I think we have a 
problem.
    Mrs. Lummis. Thank you.
    Mr. Walberg. I yield back.
    Mrs. Lummis. Thank you very much, Mr. Walberg.
    I yield to the gentleman from Pennsylvania, Mr. Cartwright.
    Mr. Cartwright. Thank you, Madam Chairman.
    First, I would like to emphasize how much I value the work 
of our inspector general community. Your work is critical for 
everybody who, like me, wants our Government to work and work 
better and be more efficient. So I thank you for your work, in 
addition to being here today.
    Now, Mr. Scovel and Ms. Tighe, I want you to invite you to 
answer these questions. The sequester's arbitrary across-the-
board cuts, they also do apply to the offices of the inspectors 
general, am I correct in that?
    Mr. Scovel. That is correct, sir.
    Mr. Cartwright. All right. So the question is how are your 
offices impacted when your budgets are cut?
    Mr. Scovel. Sir, if I may, we have heard from the other 
witnesses about how sequestration is impacting their offices, 
and it is a fact that sequestration will impact our office. My 
fear all along has been that because, for instance, as Mr. 
Porcari spoke of the FAA as being a personnel-heavy and, 
therefore, salaries-and expense-heavy account subject to 
sequestration, my office too is very personnel heavy. Seventy-
five percent of my overall budget goes to personnel salaries 
and expenses.
    So if we were going to get hit, that was where it was going 
to happen. And for me, if I am to accomplish my mission, I have 
to have my staff on deck. So my focus from very early on was to 
minimize the impact on my staff, keep them at work. Sure, they 
may be happy because they are getting a paycheck, but I am 
happy because I am getting mission. And what we have been doing 
since, actually, late 2011 has been to focus on eliminating, 
reducing all expenses not staff-related, minimize those to the 
greatest extent possible, and then to see how we could ride out 
sequestration.
    In interest of full disclosure, my office is the recipient 
of some degree of extra funding in connection with our 
oversight responsibilities for the Recovery Act and also for 
Hurricane Sandy relief, so that has provided us some 
flexibility. But we could not get to the position where we are 
today, which is that we will not need to furlough any of our 
staff, were it not for the cost reduction measures that we have 
had in place for a long time. We have had a hiring freeze in 
place since August 2011; we have reduced staff; we have 
released rented space; we have not paid any bonuses; we have 
withdrawn from a student loan repayment program. Across the 
board we have sought to cut every single expense we possibly 
could.
    Mr. Cartwright. Let me jump in there, Mr. Scovel. According 
to data provided to this committee, at the end of February 
2013, your office had about 10 percent fewer full-time 
equivalents than you had in fiscal year 2010. Is that correct?
    Mr. Scovel. That is true. We are, in fact, at the lowest 
strength level in the history of our office since the Inspector 
General Act was enacted in 1978.
    Mr. Cartwright. So what impact has that reduction had on 
your work?
    Mr. Scovel. Impact. Data point. It is an imperfect measure, 
and I will acknowledge this. In 2004, each OIG FTE was 
responsible for covering $137 million in DOT budgetary 
resources. In 2012, each OIG FTE is now responsible for 
covering $192 million of Department budgetary resources. For 
example, last year, where, in our criminal investigation side, 
I regret to say it, we had to take a pass on information that 
was provided to us to see whether we believed we needed to 
dedicate an investigatory resource, a staff person, to 
participate with other agencies in investigating that offense. 
We didn't have the personnel and we decided that the expenses 
associated with participating in that investigation would be 
too great to justify it.
    We have also taken steps internally to increase the degree 
of scrutiny that we will need to apply to every single request, 
whether it is from the Department or from Congress, for audit 
support.
    Mr. Cartwright. I want to jump in there and I want to give 
Ms. Tighe a chance here.
    Ms. Tighe, your staff also expressed concern about 
reductions in FTE levels in your office and with respect to 
audits. What impact does this have on your ability to conduct 
audits and investigations?
    Ms. Tighe. Well, it certainly will have an impact, as I 
mentioned earlier. Like Mr. Scovel's office, 70 percent of our 
budget is salaries and benefits. The next highest increments of 
funding are the common support we pay to the Department for IT 
and other costs that I can't control.
    Then we have our financial statement contract. After that, 
I get travel, training, and smaller contracts. We are canceling 
or will cancel those contracts which support our FISMA work and 
our data risk modeling. We will be furloughing our employees, 
from me on down, for about 11 days, 10 to 11 days through the 
end of this fiscal year. That will have a very real impact on 
our work, our audit and investigative work.
    We are already turning down cases; we are shifting 
priorities. We are telling our criminal investigators in the 
field that they can only open the highest priority things and 
they better watch what they do. Our audit work, we had put on 
our audit plan for this year, for example, a project to look at 
the grantees for the race to the top monies, which is one of 
the big dollar marquee initiatives of this Administration. I 
don't know if we are going to have the travel money to go out 
to those grantees.
    Mrs. Lummis. Thank you, Ms. Tighe.
    Thank you, Mr. Cartwright.
    Next is the gentleman from Tennessee, Mr. DesJarlais.
    Mr. DesJarlais. Thank you, Mrs. Chairman, and thank you all 
for being here today. We have had a lot of discussion today 
about sequester and we have talked about where we need to cut 
spending and how difficult this is going to be, and it has been 
kind of contentious and even maybe it seems like people have 
gotten a little defensive.
    Let me ask the panel, do you agree, just looking at the big 
picture, looking at our Government and our budget and our 
deficit, do you believe that we have a spending and a deficit 
problem in this Country? Mr. Miller, we will start with you.
    Mr. Miller. Based on my reading of the press, I believe 
that there is a consensus that we need to both address the 
deficit to preserve the long-term health of the Country.
    Mr. DesJarlais. Okay, so we did that with sequester; we cut 
$85 billion, and then we also had a tax increase that raised 
about $60 billion in taxes. So we have kind of taken a balanced 
approach. So is that kind of in line with what you think we 
need to be doing right now, based on this $17 trillion in debt?
    Mr. Miller. Well, to be clear, my area of focus is the 
Department of Education.
    Mr. DesJarlais. I am asking you as a taxpayer.
    Mr. Miller. I wouldn't want to hazard what I think is the 
right fiscal policy.
    Mr. DesJarlais. All right.
    Mr. Miller. What I would say is the Administration view is 
that we need a balanced approach.
    Mr. DesJarlais. Well, I am just asking you all as 
taxpayers, because our committee is here to make sure that we 
are spending taxpayers' money properly.
    So, Ms. Tighe?
    Ms. Tighe. As a citizen and a taxpayer, not as an IG, I 
would say that certainly a balanced approach makes sense. I 
can't help but think, sitting as an IG, that there is 
Government spending there ought to be spending that can be cut, 
programs that can be run more wisely. I know that the 
entitlement programs are a pot of money that ought to be looked 
at in some fashion. I say that as, you know, a few years off, 
myself, from receiving some of those. And taxes, and I am no 
expert on tax policy, but nothing should be off the table, in 
my opinion.
    Mr. DesJarlais. So we have already raised taxes. Do you 
want to pay more taxes?
    Ms. Tighe. My husband doesn't, but I feel sometimes it is 
the price I pay.
    Mr. DesJarlais. Mr. Porcari, yes or no, do you think we 
have a debt and spending problem?
    Mr. Porcari. As a citizen and a taxpayer, I think the 
balanced approach is the right way to go.
    Mr. DesJarlais. Okay.
    Mr. Scovel?
    Mr. Scovel. I want to stay in my lane and leave the policy 
decisions for all of you and the Administration.
    Mr. DesJarlais. Okay. Well, I just say that because, again, 
it is easier to cut other people's spending than your own. You 
are all here; you are passionate about your departments, so on 
and so forth.
    In education, I guess I am disappointed to hear Mr. Miller 
come out and say we are taking a hatchet to education. Do you 
truly believe there is no waste in education? We have had the 
Department of Education now for three decades, $1 trillion put 
in there. Math, science, and reading scores are essentially 
flat. There are Pell grants that have gone from $12 billion to 
$43 billion over the last four years; we are not really seeing 
a return on that investment.
    We have had, as I think Representative Jordan said, 19 
months to prepare for this. Is there nothing in the Department 
of Education that you could look at that you would want to cut 
first, before you start saying we are going to take a hatchet 
to Head Start, to special education programs? That sounds to me 
like scare tactics. That sounds like something I have been 
hearing from the White House. Is there not a better approach in 
prioritizing spending cuts?
    Mr. Miller. I would say I think we have. I think what you 
have seen is our proposals, with the support of Congress, to 
eliminate 49 programs that cut $1.2 billion out of our 
programmatic budget has in fact been very consistent with 
trying to make some smart tradeoffs. I think we are at a point 
now where Title I, in an environment where we are actually 
raising the standards because not enough States have 
competitive standards, we are actually putting more of a 
challenge on our educators to do more, better, faster.
    Mr. DesJarlais. Okay.
    Mr. Miller. We think to dis-invest in education at this 
time is only going to threaten the long-term growth and health 
of this Country.
    Mr. DesJarlais. And we all know that sequestration, we 
talked about the Republicans taking these Draconian cuts. You 
realize the super committee had an equal number of Democrats 
and Republicans at the table, so sequestration was a failure by 
both sides of the aisle to come to an agreement. So we have to 
make cuts, and we better get used to them because there are 
going to be more coming. This is just one-tenth of our deficit 
spending. So I would suggest that maybe this is a good learning 
experience today, that we are going to see more cuts and maybe 
we need to prepare as we move on.
    You were talking, Mr. Porcari, about the 47,000 air traffic 
controllers, and we are going to have to furlough them, we are 
going to have to take maybe up to 11 days out of the year. I 
know that there have been increases in salaries. Forty-seven 
thousand.
    I don't know what their annual salary is, but could there 
be a pay cut before we decide, hey, taxpayer, you are going to 
have delayed flights because we are not going to give up 
anything? You know, nobody wants to give up anything; they just 
want to take more. And I think the problem that we have in this 
Country and this Government right now is excess spending. We 
all see it. We know that sequestration was a responsible thing 
to do in the sense that we finally cut spending.
    But instead of all of us feeling good that we are doing the 
right thing after admitting we have a spending problem, we are, 
instead, villainizing this. This President should be out 
saying, thank you, everybody, for making a shared sacrifice; we 
have taken the first step in doing the right thing. We 
shouldn't be sitting here whining and complaining about what we 
have to do, because we have a lot more of it to do.
    And I know my time has expired.
    Chairman Issa. [Presiding.] Mr. Porcari, there is a 
question there. Do you want to answer it relative to the 
contracts and so on for air traffic controllers?
    Mr. Porcari. Yes. First, I would point out, through 
sequestration, our employees are in fact taking a pay cut of up 
to 10 percent for the remainder of this fiscal year. We have 
worked very hard over the last couple years to have a good 
working relationship and an appropriate collective bargaining 
relationship with our air traffic controllers. We have, I 
think, a 180 degree turn in terms of the working relationship 
that shows up in how we implement things like NextGen with our 
workforce. I would point out I think we run the risk of undoing 
that and unraveling that.
    Chairman Issa. I will take a liberty for just a second to 
make sure that I get the answer to that last question. Within 
the contract structure, you can have a reduction in force, you 
can have furlough. If I understand correctly, simply reducing 
the amount of pay for per hour, even with sequestration, is not 
contractually allowed, is that correct?
    Mr. Porcari. That is my understanding. We have started, I 
should point out, over 90 days ago, the collective bargaining 
process with our air traffic controllers for the furloughs.
    Chairman Issa. Okay. I just want to make sure that we 
understand what the Government can or can't do. We all have 
suggestions of what we would like you to be able to do. I only 
want us to stick to the ones that you could do at this 
juncture.
    With that, we go to the gentleman from Missouri, Mr. Clay.
    Mr. Clay. Thank you so much, Mr. Chairman, and thanks for 
this hearing.
    For the record, let me state to my friend from Tennessee 
that the American people know exactly what is going on here in 
this Congress, which is nothing. We shirked our responsibility 
with the super committee, we shirked our responsibility with 
Simpson-Bowles, and they don't like it. So you can cast blame 
if you want to, but the American people are smarter than that 
and they know that we aren't doing a thing.
    Let me direct my questions to Mr. Miller and Ms. Tighe. You 
know, in 1994 there were only seven States with charter schools 
school laws and 60 operational charter schools. Today there are 
more than 5,000 charter schools in 40 States and D.C. The rapid 
growth of charter schools presents an opportunity to help 
reform our education system by presenting innovative practices 
that can be incorporated into traditional public schools. But 
this growth also presents risks and requires rigorous 
oversight.
    Deputy Secretary Miller, one of the concerns identified in 
the inspector general's letter to the committee involves how 
effectively the Department is overseeing and monitoring charter 
school grants. There have been numerous reports of fraud in the 
management of charter schools. Do you agree with Ms. Tighe's 
concern that there needs to be increased accountability for 
charter school funds once they reach the entity running the 
charter school?
    Mr. Miller. Simply put, yes. We believe that, from a policy 
standpoint, the growth in charter schools and the potential 
they offer for being able to develop innovative reforms are 
good. We think oftentimes you have a proliferation of different 
oversight and authorization models at the State level that make 
the subsequent oversight kind of more complicated.
    Our direct interaction, generally speaking, is with the 
State entity and with the authorizing entity who are 
responsible for the fiduciary duty in terms of the oversight of 
funds, so our work is with the States versus with the schools. 
And I think we share concerns that States need to do a better 
job in terms of exercising that oversight.
    Mr. Clay. So how does the Department create more 
transparency in how charter schools use taxpayer funds? I mean, 
do you look at graduation rates, test scores, reading levels, 
and math tests?
    Mr. Miller. Relative to if they are direct recipients of, 
let's say, Title I monies, they are subject to all of the 
statutory requirements of Title I, and there is an 
accountability system within that. Generally, the dominant 
framework, however, is the State framework for governing 
schools, so, again, we work in partnership but respectfully 
have to defer on cases to where the State's governance 
framework with respect to charter schools.
    Mr. Clay. Although we send them Title I money. We have some 
responsibility.
    Mr. Miller. And we do provide oversight for the Title I.
    Mr. Clay. Okay, Ms. Tighe, I am a strong supporter of high 
performing charter schools, but I am also troubled by the risk 
of the privatization of public schools under the guise of 
charter operators. In your investigation involving education 
charter management organizations, do you find that fraud and 
other problems are more prevalent with for-profit organizations 
or nonprofit?
    Ms. Tighe. We haven't found a difference between profit and 
for-profit. We have found problems with charter management 
organizations. We are actually getting ready to commence audit 
work in this area, also, because while we have had a number of 
investigations involving these entities and charter schools in 
particular, we really wanted to go in and get a good look at 
what that might mean. But I agree with you that there are 
problems.
    Mr. Clay. So it could be we may be able to find savings in 
these funds that go to some of these organizations?
    Ms. Tighe. Well, yes. We have had a number of investigative 
cases already. Probably since the last few years we have opened 
56 charter school investigations; we have had recoveries so far 
of about $10 million. The deputy secretary was correct when he 
said that part of the problem is that there are a number of 
authorizers in every State and they vary, and the level of 
oversight varies wildly among States, and that, I think, lies 
where some of the problems are.
    Chairman Issa. I thank the gentleman. A good line of 
questioning.
    We now go to Mr. Mica of Florida.
    Mr. Mica. Thank you, Mr. Chairman.
    Secretary Porcari, in the recent legislation Congress 
passed, known as MAP-21, the transportation reauthorization, we 
mandated the consolidation or elimination of some 50 Department 
of Transportation programs. Can you tell me how many positions 
have been eliminated and what taxpayer dollars we can expect 
from that consolidation or elimination of programs?
    Mr. Porcari. It is a very good question. First, we are in 
the process of the consolidation right now and, as you know, 
there are specific MAP-21 requirements for doing so.
    Mr. Mica. Well, can you give us an estimate? Is it going to 
be 100 positions, 500 positions, and will it save $1 million, 
$10 million?
    Mr. Porcari. Although the programs have been consolidated, 
the need for oversight and the implementation of the funds has 
not gone away. We will be redeploying the personnel in what we 
think is the most effective way.
    Mr. Mica. So how many positions do you expect to eliminate?
    Mr. Porcari. We are currently, through selective hiring 
freezes, trying----
    Mr. Mica. So nobody?
    Mr. Porcari. I did not say that. I said through selective 
hiring freezes we are trying to actually----
    Mr. Mica. Okay. And the other thing I hear, too, from 
outside, talking to our DOTs, people are just trying to justify 
their continued existence, and Congress sent a mandate out to 
consolidate or eliminate some 50 programs, but people in the 
Department of Transportation are still making excuses to 
continue the red tape and paperwork; and I haven't gotten into 
the devolution on that, which again I see the same thing. So 
maybe you could supply the committee with some information on 
the savings and elimination of the programs at a time when we 
are trying to save money.
    You talked about contract towers. Before I became chairman 
of aviation, back in 2001, there was a GAO study, maybe you 
remember it, Mr. Scovel, about the operation of contract 
towers, and it came in and said that they cost less and also 
they had better safety operations. Well, after I became 
chairman, they asked me, the air traffic controllers said this 
is a skewed study, this isn't right, they didn't ask the right 
questions. I said, well, give me the questions; we will ask 
them. So we did another study. The study came back and it said 
that for every contract tower we save $1 million and they also 
carefully monitored the safety record safer.
    Now, we have been cutting back, you said, contract towers 
is one of our biggest contracts and we are cutting that back? 
What is the proposal to cut back?
    Mr. Scovel. First of all, the objective that we have is 
to----
    Mr. Mica. But we are spending $134 million? Is that what we 
are spending?
    Mr. Scovel. We want to minimize the inconvenience for the 
maximum number of travelers.
    Mr. Mica. So how big is the cut here?
    Mr. Scovel. So the criteria, there are up to 248 towers.
    Mr. Mica. Yes, 248.
    Mr. Scovel. Both FAA operated and contract towers in that 
universe.
    Mr. Mica. And each contract tower operates, well, the price 
that I had is that the savings is about $1.5 million per 
contract tower, and it is also safer. So you are cutting back 
substantially contract towers. You said this is your biggest 
contract, right?
    Mr. Scovel. Yes, it is one of our biggest contracts.
    Mr. Mica. We had a list from way back where the Clinton 
administration recommended another 69 towers to be converted. 
Bush never converted them. Don't you think we should start 
looking at some ways we could save money and make it safer? Mr. 
Scovel, are you familiar with that report?
    Mr. Scovel. You are generally correct, sir.
    Mr. Mica. Thank you. That is all I need to say.
    [Laughter.]
    Chairman Issa. The gentleman can get at least a little bit 
further than generally correct, if you don't mind.
    Mr. Mica. Well, really quickly. But would you provide the 
however for the record? Because I only have about a minute 
left.
    How much in the rail area are we cutting?
    Mr. Porcari. I am sorry?
    Mr. Mica. The rail area, passenger rail.
    Mr. Porcari. On the passenger rail side, actually it is 
about a $10 million cut. We are cutting back on administrative 
expenses.
    Mr. Mica. We talked about some things with conferences, et 
cetera. Now, you know, the increases in loss on food service on 
Amtrak have gone from like $81 million to $85 million in the 
last fiscal cycle. We could eliminate food service. Do you 
think anyone would starve between here and New York? We did a 
little analysis in the Transportation Committee. Every 
hamburger was underwritten almost $7. We could stop that loss, 
couldn't we? Eighty-five million dollars in loss. Wouldn't that 
be an area that we could look, instead of some of these other 
essential safety services? Would you consider that?
    Mr. Porcari. And again, the Amtrak cuts are about $70 
million. We will be happy to have that discussion.
    Mr. Mica. But we could do it just by eliminating food 
service, and the loss would save us $85 million just last year.
    Let me close with IT. That is Mr. Clinger up there. He is 
the former chairman when I came to Congress. It says the 
Clinger-Cohen Act required, again, that all the agencies come 
up with the enterprise architecture. We have $3 billion in 
annual expenditures for IT in your Department and we have 400 
information systems; some duplicative, some archaic, some 
obsolete. And I understand something is coming in May, a plan?
    Mr. Porcari. Yes.
    Mr. Mica. Okay, we are waiting with bated breath.
    Mr. Porcari. We agree there is significant opportunities 
for savings there, and that has actually been a subject of 
management focus.
    Mr. Mica. Yield back the balance of my time.
    Chairman Issa. And now for the rest of your answer, if you 
don't mind.
    Mr. Scovel. Thank you very much, Chairman Issa.
    Just very quickly, Mr. Mica, I couldn't show my face back 
at my office if I let this go by. You mentioned a GAO study on 
contract towers. In fact, it was an OIG study. We have done two 
of them. You are right, they are less expensive than FAA-
operated towers; they are as safe as FAA towers and generally 
accepted with approval by the user community.
    Mr. Mica. I apologize. I meant IG.
    Mr. Scovel. Thanks.
    Chairman Issa. Thought he might.
    And, with that, we go to the gentleman from Massachusetts, 
Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    Ms. Tighe, your office did a study, I think, over three 
years; they found that there was $187 million in Federal 
student aid funds involved in student fraud rings.
    Ms. Tighe. Yes.
    Mr. Tierney. So I commend you on that. It is a good study, 
but in reality it is about less than one-half of one percent of 
what we spend on Federal aid, and next to what I find on the 
Subcommittee of Oversight for the National Security it is like 
minuscule on that basis. But it is important nonetheless. So if 
you look at for-profit institutions in the higher education 
field or whatever, I have some statistics here. Ninety percent 
of their revenues come from taxpayers.
    Ms. Tighe. That is correct. That is the limit.
    Mr. Tierney. Ninety percent in the form of Federal 
financial aid, Pell grants, student loans, GI bill funds, 
Department of Defense tuition assistance. They have about 10 
percent of all student enrollment, but they take up about 25 
percent of all financial aid dollars that we spend. The Senate 
Health, Education, Labor and Pensions reported, for 2009-2010, 
they got $32 billion of taxpayer money on that.
    That is a lot. We have had some problems with over-pricing 
tuition and predatory recruiting practices, things of that 
nature, but have you looked at them with respect to whether or 
not they are at greater risk for these fraud rings than some of 
the other institutions?
    Ms. Tighe. Where we have seen the greater risk is the low-
cost institutions, which is primarily community colleges. Now, 
there are for-profit schools. For example, University of 
Phoenix, that operates a community college component called 
Axia College, which is a little bit lower cost, has seen a 
number of problems with fraud rings. It is the lower cost 
institutions, primarily, although not exclusively.
    Mr. Tierney. Can you explain why that is?
    Ms. Tighe. Absolutely.
    Mr. Tierney. You have so many more dollars in these 
programs going to one set of institutions and less going to the 
other, so what is the distinction? What invites them in?
    Ms. Tighe. It is not really a function of dollars, I agree 
with you on your statistics. But the problem with fraud rings 
is it is all about what comes back to the so-called student. So 
when you sign up online, online you have invisibility to your 
institution. So they sign up for classes, they apply for 
student aid; then the community college, for example, will take 
back from the Title IV funding. Say they receive a Pell grant 
of $5,000 because I am going to put zero income on my 
application. Well, what happens is the community college will 
take its, say, $600 for a semester of classes and it will remit 
the rest to you for room and board and books and other expenses 
related to education.
    The problem we see for distance education is why are we 
funding room and board in those kind of circumstances? All of 
that grew up when brick and mortar schools, where you go on 
campus, you live there, and you need to pay room and board. You 
do not necessarily need to do that in distance education.
    There is a restriction on the old correspondence schools. 
Remember those? You do not get room and board for 
correspondence schools.
    The post-9/11 GI bill done by the Department of Defense 
eliminates significantly living expenses.
    So that gives you money that goes back to the bad guys. So 
all they need to do is get a bunch of their friends or inmates 
in prison institutions to apply for student aid, and then they 
kick back some of that money to the ring leaders.
    Mr. Tierney. So, Mr. Miller, that raises a good question. 
What are we doing about that?
    Mr. Miller. Generally on the issue of how do we address 
these fraud rings, what we are finding is, in large agreement 
working with the IG and following up on their recommendations 
to take actions, you will see they break down in a series of 
there are some system changes we can make.
    Mr. Tierney. Like what?
    Mr. Miller. Like there are statistical models on the front 
end, through the application, through the FAFSA, of which, 
again, it is not a few, it is about 60 percent of eligible 
recipients go through the FAFSA. You can put flags in if there 
is a pattern that we think looks like suspicious behavior; you 
can basically require more personal identification to go on 
through the application process, would be an example. Some of 
these, however, require statutory changes. So there are things 
that require statutory changes that, if we are really going to 
change some of the eligibility requirements, that requires 
actually Congress to act.
    Mr. Tierney. Are you making those recommendations to 
Congress?
    Mr. Miller. That is something I will work with Congress and 
pursue what we think is kind of the right process. And in the 
middle there is regulatory changes that we are also making to 
address this. We go to negotiated rulemaking and, again, it is 
a very public, regulatory process.
    Mr. Tierney. So could you provide to this committee the 
recommendations that you have made for statutory changes and 
the recommendations that you are making for rule changes?
    Mr. Miller. Yes. There will be a process by which, for 
negotiated rulemaking, we are starting with hearings.
    Mr. Tierney. Can you provide for us what it is you are 
doing? Just give us an update on exactly what requests you are 
making for rule changes and what you recommend to Congress we 
change in the statute.
    Mr. Miller. Of course. I just want it to be clear, though, 
part of the hearings in the regulatory process is to not in 
fact, we have to honor the process, which says we cannot have a 
prescribed prescription even before we start the negotiated 
rulemaking process. It is meant to be informed by the public.
    Mr. Tierney. Okay.
    Mr. Miller. So at the time, then, that the agenda gets set, 
we would obviously be happy to share that with you.
    Mr. Tierney. So you already have some idea of what you 
think ought to be changed in the law, so you can give me that 
part at least, right?
    Mr. Miller. We have an understanding of the issue. And then 
the question is how do we engage on what the appropriate----
    Mr. Tierney. So you have come to no conclusion yet as to 
what changes in law may be required to be useful?
    Mr. Miller. No, that would be premature at this point. We 
understand there is a problem and we understand there are 
different ways to address the problem, and coming up with the 
specific statutory or legislative solution, we are not at that 
point.
    Mr. Tierney. Ms. Tighe, can you help us?
    Ms. Tighe. Well, I think that the primary statutory change 
we recommended was the change to the cost of attendance. I 
think there has been some modest movement in the Senate through 
the appropriations bill for this year that would look at Pell 
grants, but I would urge Congress to look at it as a total 
package, of not just Pell, but also the loans that one can get.
    Possibly just looking at Pell could lead to a somewhat 
perverse situation where a financial aid administrator would do 
two calculations for cost of attendance, one for Pell and one 
for loans, and a student who is disadvantaged or otherwise 
might get more of a Pell might end up borrowing more. So we 
want to avoid that.
    But I don't know that the Department has put in concrete 
fashion any kind of proposal to change the cost of attendance.
    Chairman Issa. Mr. Tierney, if you would summarize.
    Mr. Tierney. Thank you.
    Do you have any written report with respect to this, Ms. 
Tighe, that you want to draw our attention to?
    Ms. Tighe. Well, we did do a written report on the fraud 
rings that I talked about and we did make that recommendation.
    Mr. Tierney. You make that recommendation?
    Ms. Tighe. Yes, we do.
    Mr. Tierney. Thank you.
    Thank you, Mr. Chairman.
    Chairman Issa. I would like to thank the gentleman.
    I might remind all of us that the ranking member and I, in 
the last Congress, sponsored the Data Act, which passed, that 
would have changed recipient reporting, would have changed a 
lot of the databases on which these kinds of investigations go.
    I am not sure that you can use, but, Mr. Miller, the 
Recovery Act, the so-called rat board, has been extended by 
this committee's pushing and acting, and I might suggest that 
what you are trying to find, you may still be able to use that 
asset that former IG Devaney set up to do some modeling of what 
could be done on a broader basis; and we certainly would 
encourage that, and if you need support from us, we would 
provide it.
    With that, we go to the gentleman from Texas, Mr. 
Farenthold.
    Mr. Farenthold. Thank you, Chairman Issa.
    Back when I was in high school, I was a DJ, and about the 
time I would get sick of a song is about the time people would 
start to know what the song is and start to like it. I am kind 
of getting that same feeling with a lot of this talk about 
sequestration. A lot of the American people, busy raising their 
families and working, are really catching on; and, to me, I 
think they are seeing that this is looking a whole lot like a 
manufactured crisis with people screaming that the sky is 
falling.
    If my personal budget were being sequestered and I were in 
your place, testifying before this committee, I might choose 
not to pay my mortgage and say, oh my God, because of 
sequestration, my children are going to be homeless; or I could 
choose not to eat out as often and say, oh, my family is going 
to go hungry, or heaven forbid we go look for a box of noodles 
in the pantry, macaroni and cheese. Actually, our kids would 
probably prefer macaroni and cheese to some of the places I 
take them.
    But here is what I am getting at with that. I really do 
feel like this is a lot of posturing, and I want to ask the two 
secretaries here. If I were to come to you and say cut 2 
percent from your budget, do whatever you need to do to cut 2 
percent, 2 or 3 percent, minimize the effect on safety, 
minimize laying employees off. You have cart blanche to fix 
your budget to cut 3 percent. Could you do it? And we will 
start with Mr. Miller.
    Mr. Miller. I think, candidly, we struggle with that. The 
money is in money for poor kids, money for students with 
disabilities, money for kids on Indian reservations. So it is 
like what child is more or less important or what services are 
more or less important?
    Mr. Farenthold. But there is no 3 percent in overhead. 
There is no 3 percent in waste, fraud, and abuse. There is no 3 
percent in something maybe we don't need to do.
    Mr. Miller. Ninety-nine percent of our budget is in program 
dollars, it is in direct program dollars; it is not in 
overhead.
    Mr. Farenthold. And there is no waste, fraud, and abuse in 
any of those programs, despite these fraud rings we are hearing 
about? So you are telling me you couldn't cut 3 percent from 
the budget if I asked you to.
    Mr. Miller. The sequester is forcing us to cut. If you said 
could you find cuts that would not adversely impact education 
in students who are struggling right now, who are at the least 
advantage and who are struggling to participate in our global 
economy because they don't have the skills, I would say no. I 
would say making those kind of cuts is going to have an adverse 
impact that we will regret.
    Mr. Farenthold. All right. I just can't believe there is 
not 3 percent there.
    What about in transportation, Mr. Porcari?
    Mr. Porcari. Thanks for asking. Again, what the sequester 
is in a part of a fiscal year, because three-quarters of our 
Department is exempt from it, is the equivalent of a 90 percent 
cut.
    Mr. Farenthold. All right, so if I gave you carte blanche, 
could you do it?
    Mr. Porcari. Of course we can do it. It is a question of 
what the impacts are. And that is the process we are going 
through right now. I would point out the easy stuff has been 
done. Since 2008, for example, within the Federal Aviation 
Administration, we have cut $510 million out of the cost basis 
by reducing travel by 30 percent, IT savings of $36 million, 
$100 million from innovative contracts.
    Mr. Farenthold. I think Mr. Mica came up with a nice 
laundry list of things we could still continue to look at and I 
find it very difficult to believe that just with the increased 
cost of gasoline, many families have had to squeeze 3 percent 
out of their budget now, and I just don't think it is 
unreasonable that we would be asking. And yet we, in the House, 
have come up with two different replacements for sequester that 
aren't as painful, and I get at least you could find something, 
Mr. Miller maybe not.
    I do want to go on to the inspector generals because I have 
an important question for them. I am subcommittee chairman on 
this committee of Post Office, Government Workforce, and the 
Census, and recent news reports in The Washington Post suggest 
that agency managers could be able to choose favorites among 
their employees to spare them from furloughs in sequestration.
    Let's ask Mr. Scovel and Ms. Tighe, can you commit to us 
that the IG's office will be looking to make sure that whatever 
furloughs come are handled in a fair and appropriate manner, 
and we don't have political reprisals or choosing of favorites?
    Mr. Scovel. We will investigate every allegation, and we 
have a hotline center that is equipped to take those 
allegations and to ensure that they are inquired into properly.
    Mr. Farenthold. Ms. Tighe, is there a similar situation in 
education?
    Ms. Tighe. Yes.
    Mr. Farenthold. All right, great.
    I actually only have 25 seconds and I had a couple of 
questions on improper payments, so I am just going to yield 
back the remainder of my time.
    Chairman Issa. If I could have that time.
    Mr. Farenthold. It is all yours, Mr. Chairman.
    Chairman Issa. If you, Mr. Porcari, and you, Mr. Miller, if 
you went to your workforce and told them that they had a 
hypothetical choice of taking that furlough, that 5 percent, 
effective, pay cut or finding a way to come back to you and 
show that they could do the same amount of work with 5 percent 
less employees next year, not this year, but in the next fiscal 
year, would you predict that your workers would come up with 
organizational changes, your middle managers with 
organizational changes, that would allow you to keep the pay 
and benefits where they are and do more or do as much with 
slightly less people? Just a prediction.
    I think that is what Mr. Farenthold was really getting to, 
is isn't there enough organizational lethargia that builds in 
that, in fact, almost any workforce faced with reducing by 
attrition and other means or taking a pay cut, they will find a 
way to do better in efficiency?
    Mr. Porcari. Most of the savings since 2008 that I was just 
outlining have actually been suggested to us by our employees. 
We have a smart, very committed cadre of public servants. They 
will continue to find savings and I would submit, Mr. Chairman, 
they would do that with or without a sequester scenario.
    Chairman Issa. Mr. Miller, you would also agree that our 
workforce is smart and innovative, and, given the right 
motivation, can help us in this process?
    Mr. Miller. And I would argue that they have been, like 
what Mr. Porcari has stated. I think, frankly, we have asked 
them, even today, to take on more and more responsibilities 
that they are forced, and have been over the last several 
years, to be more innovative with their programs.
    We are asking them to take more accountability for closing 
out audits. We are asking them to take more responsibility for 
providing real effective assistance to our grantees; not just 
about getting the money out, but making sure it is having an 
impact. So we are asking more and more of our employees each 
and every day. So to say, yet again, can you do more, I think 
our employees would welcome it, but they would not see that as 
a new request.
    Chairman Issa. Thank you.
    We now go to the gentleman from Nevada and thank him for 
his patience.
    Mr. Horsford. Thank you, Mr. Chairman.
    Prior to coming to Congress, I served in the State Senate 
in Nevada, and over the last few years we experienced 
tremendous budget shortfalls. It required both sides of the 
aisle to come together to find a balanced approach to pass a 
balanced budget, which is what we have done.
    I believe that the Federal cuts, whether under 
sequestration, under what occurred in the prior fiscal year, or 
what may come, needs to be put in context with the cuts that 
State and local entities have already incurred. In Nevada, in 
the Department of Education, 70 percent of our department's 
budget are federally funded positions, and that is on top of 
the reductions that were made by our State agencies.
    So I am a bit perplexed, Mr. Chairman, that the line of 
questioning by some members on the other side somehow is 
pointing the blame at our Federal agency heads, rather than 
taking the responsibility as members to do our job, to come up 
with the policies that we need to arrive at a balanced 
approach, which is what a lot of State governments have been 
doing for many years.
    Now, I respect the professionals that are here today, and 
your viewpoints, and I specifically want to ask Mr. Porcari on 
the FAA. I am very concerned about air traffic control. We have 
40 million visitors that come in and out of our major airports 
in Las Vegas. So can you elaborate on what the impact of the 
furloughs were that occurred in 2011 on your employees? We 
focused a lot on what the new impact would be, but what already 
occurred?
    Mr. Porcari. To the extent that we have had furloughs in 
the past, they have not been nearly as broad as what is being 
proposed under sequestration. I mentioned that the vast 
majority of the 47,000 FAA employees would be subject to 
furloughs. That is because 70 percent of our operations account 
is actually the cost of people. And those people are out there, 
overwhelmingly, in the field; not in Washington, out there in 
the field. Unlike anything that has happened in the past, it is 
going to have an across-the-board impact on operations. What we 
are trying to do is minimize the impact on the maximum number 
of people.
    Mr. Horsford. Again, I respect the position that FAA 
employees are definitely going to feel the brunt of this under 
sequestration. What about the average American traveler, what 
are they going to experience?
    Mr. Porcari. If you are traveling by commercial airline and 
you are generally going, if you are not going point-to-point, 
if you are going through a hub airport, which the bulk of 
passengers are, you are likely to experience delays. It will be 
significant delays at some times. If you are a general aviation 
user, you will see a number of places where control tower 
services, controlled air space was formerly provided, but will 
not be either midnight to 8 or 24 hours, and you will operate 
in what we believe is a safe but different operating 
environment.
    Mr. Horsford. And I think, again, this is an important 
aspect because, again, sometimes people talk about Federal 
employees as some nondescript bureaucrat that is not performing 
an essential function. We are talking about air traffic safety. 
Has anyone forgot about 9/11 and the effects of not having the 
top-notch safety that we expect as the traveling public? And 
what will that cause?
    There is a report that was issued by the Aerospace 
Industries Association that said the combined reduction in 
passenger and commercial air traffic resulting from the 
sequester could lead to anywhere from $10 billion to $20 
billion in reduced economic activity and a job loss of upwards 
of 132,000 jobs.
    In Nevada, we can't afford any more job losses. We are 
trying to get our economy jump-started and moving in the right 
direction, and we need to work in that regard. So is this study 
accurate?
    Mr. Porcari. We have not independently verified that study, 
and there are several others out there that have broadly 
similar conclusions. What we do know is that aviation at large 
is one of the driving forces behind the economy, whether it is 
passenger commercial air traffic, whether it is aircraft 
production, whether it is the innovation that happens on the 
electronic side, on the avionic side every day. We know it is 
one of the drivers of the economy. There will clearly be some 
impacts on the economy, broader impacts from these 
sequestration cuts.
    Mr. Horsford. Thank you.
    Mr. Chairman, I just want to close by saying I want to work 
with anybody that has a good idea for how we can identify 
targeted cuts in Federal programs that aren't efficient, that 
can be improved. But to single out these across-the-board cuts 
that we know are not good for our economy, that are not good 
for public safety and are ill conceived, we just have to move 
in a different direction.
    Mr. Farenthold. [Presiding.] Thank you, and the gentleman 
yields back.
    We will now go to the gentleman from Gainesville, Georgia, 
Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman. I appreciate it.
    One of the things that comes when you are new and you are 
sitting on the front row, you get to listen to the entire 
hearing a lot of times, especially when you are trying to go 
back and forth. It is amazing to me how many things we have 
talked about that had absolutely nothing to do with this 
hearing, in all fairness. I mean, we have talked about 
sequestration; we have talked about how it is going to affect; 
we have talked about other things.
    I will tell you what is interesting to me, if you want to 
talk about sequestration, is that there are open and 
unimplemented IG recommendations could have saved the taxpayers 
$67 billion over the last few years. Sequestration is $84 
billion, $85 billion. We haven't talked about that. There are 
savings that can be had.
    I want to tell you just a quick story to illustrate some 
questions that I have. A few years ago I pastored, if you know 
my background, if you don't, I pastored a church for 11 years, 
I felt led to go back to law school, Grayson Law. It was a 
strange thing in my life. But we looked at it and I said, the 
only way I can go back at 38 years old is we have to go full-
time, to get this over with.
    So my wife and I, we sat down and we said I am going to be 
losing an income, because I couldn't work and go to law school 
at the same time. So we looked at all of the things, from 
buying sandwich meat, from buying other things, that we were 
going to take lunches and cut back. I have three children. What 
was not discussed was taking a kid and selling them on eBay. We 
looked at what we could do.
    When I look at this right here, and I served on the Georgia 
legislature as well, which, by the way, we had, between Federal 
cuts, we had $5 billion in cuts, my friend. In Georgia, what we 
have done is we cut our budget and we lowered taxes and we have 
attracted business. So it can be done. The problem I am having 
right here is that there seem to be IGs, and we talked about 
the cuts and my friend across the aisle talked about the cuts 
for the IGs themselves. Well, at this point in time, you are 
not listening to them anyway. What is the problem? You have to 
have a balance here.
    I go back to the $67 billion that is left on the table that 
we are not looking at, that we are not talking about.
    Mr. Porcari, the cuts that you were discussing is your pay 
cuts with three furlough days, correct?
    Mr. Porcari. Yes.
    Mr. Collins. Okay. One of the other things, and I believe 
it was my friend from Missouri across the aisle that talked 
about the rhetoric from both sides in dealing with the inaction 
in Congress. I think there is also just an understanding here 
that there is a frustration in lack of sort of common sense in 
planning.
    Mr. Miller, you said this earlier. And I just going to 
assume it was your statement here, and not assuming it to 
anything else, but you said that we just thought it wasn't 
going to happen. That is the problem in Government right now, 
this Pollyanna approach that it wasn't going to happen. But it 
was law. It was something that was coming and now it is here. I 
think the frustration that most people like myself, who had to 
make plans in going forward, was that you are not planning.
    My question also goes back to the political nature of this. 
Mr. Porcari, you have done wonderfully with your talking points 
from the Department of Transportation. I remember Secretary 
LaHood saying the exact same things just the other day. You 
have done well with that, and I understand that. But my 
question is you mentioned New York, Chicago, and San Francisco, 
because those are the high-profile airports. Just curious, why 
didn't you mention Atlanta, which is the busiest airport in the 
world? Because it doesn't play as well?
    Mr. Porcari. No.
    Mr. Collins. Because you don't get the bang for the buck 
from New York, Chicago, and San Francisco?
    Mr. Porcari. Because I could only rattle off three or four 
at a time.
    Mr. Collins. So we leave off the largest in the Country?
    Mr. Porcari. Not at all. There will be substantial impacts 
in Atlanta.
    Mr. Collins. I appreciate that. Next question. In planning 
furlough days, which a lot of governments in Nevada and a lot 
of other places have had to do, so you are telling me you 
cannot plan well enough that you cannot stagger your furlough 
days in such a way that you would have to close a tower?
    Mr. Porcari. We will be staggering the furlough days. In 
other words, the employees will have to take one furlough day 
per pay period.
    Mr. Collins. But you are telling me that you cannot stagger 
them in such a way and make them effective in such a way that, 
as your comment was in Chicago, closing the north tower?
    Mr. Porcari. That is correct. In some of our major 
operation centers, and remember, 84 percent of our operations 
employees are outside of Washington in our tech center.
    Mr. Collins. And how long have you had to think about this?
    Mr. Porcari. We have been working on this for months.
    Mr. Collins. And I think that is the problem that I am 
coming to. When you have the IG's recommendations and you have 
these that have been left on the table, that are currently 
getting around to, not getting done, you have money left on the 
table but, yet, in a hearing like this, in a time when there is 
now real cuts going on, and that is part of the problem, it is 
now time to squeal and say, here are the problems that we are 
having.
    I will leave with this last story. In Georgia, a few years 
ago, when the cuts started first coming, we were trying to look 
at all of our departments. One of the areas that was hit was 
our regents, which was our higher education, which were taking 
a direct hit. There became a saying that we were going to raise 
tuition 30 percent, and then one of our presidents actually 
said, who actually was over something, he said we are going to 
have to cut the cooperative extension program; in other words, 
we are going to cut 4-H, knowing good and well that 4-H was one 
of the least things that would have needed to be cut. Instead, 
what he did was generate 700 cards to every person, from 
crayons to pencils from every child across the State that said 
don't cut my 4-H program.
    What the American people are frustrated here is they don't 
understand an out-of-balance budget, they don't understand 
deficit reduction and they don't understand $67 billion left on 
the table. That is what I don't understand and that is what the 
American people don't understand. And that is the only problem 
I have.
    Mr. Chairman, I yield back.
    Mr. Farenthold. Thank you, Mr. Collins.
    We will now go to the gentlelady from New York, Mrs. 
Maloney.
    Mrs. Maloney. I thank the chairman for yielding and I thank 
all of the panelists for being here. I would like to address my 
questions to Mr. Porcari, particularly as it pertains to Sandy 
aid. I know you referenced that in your opening statement, so 
I, first of all, want to thank all of my colleagues that voted 
for the Sandy aid for New York, New Jersey, and 21 other States 
that were impacted.
    Mr. Porcari, the cuts to the Department of Transportation 
under sequestration would have a devastating impact on 
Hurricane Sandy relief efforts in New York and New Jersey, and 
I would like to ask about two key DOT programs, the Federal 
Highway Administration Emergency Relief Program and the Federal 
Transit Administration's Public Transportation Emergency Relief 
Program. Each faces sharp cuts under sequestration, is that 
correct?
    Mr. Porcari. That is correct.
    Mrs. Maloney. Now, the Emergency Relief Program, which 
provides relief funds to repair Federal highways and bridges, 
they face over $100 million in cuts under sequestration, is 
that right?
    Mr. Porcari. That is right, $101 million.
    Mrs. Maloney. One hundred and one million dollars. And will 
the Federal Highway Administration's Relief Program be required 
to grant less money to State departments of transportation than 
has already been approved for Sandy relief? Will this directly 
affect Sandy relief?
    Mr. Porcari. We have made provisions with the Federal 
Highway emergency relief money that it will not affect Sandy 
relief.
    Mrs. Maloney. Wow!
    Mr. Porcari. As I mentioned, part of the appropriation 
actually covered previous natural disasters. At least in the 
case of the Federal Highway Administration, this will not be 
true in the case of the Federal Transit Administration, we will 
not be impacting Sandy relief. The Federal Transit cut of 
approximately $544 million will, unfortunately, directly impact 
the rebuilding post-Sandy.
    Mrs. Maloney. Well, that is a problem. New York, as you 
know, is a transit city. We are probably the largest transit 
city in the world in terms of how we move our people. Will that 
be a $544 million cut to Sandy, or how much will it affect the 
transportation?
    Mr. Porcari. That transit cut of $544 million will be 
towards Sandy aid.
    Mrs. Maloney. Whoa, whoa!
    Mr. Porcari. And if I may point out, one of the important 
things that Congress approved in the Sandy aid is mitigation, 
in other words, rebuilding to a more resilient standard. There 
have been two storm events in the last 18 months that have 
flooded parts of the transit system, for example.
    Mrs. Maloney. Five stations in my district, five subway 
lines. It is huge.
    Mr. Porcari. And it is those resiliency efforts that will 
bear the brunt of that cut.
    Mrs. Maloney. Wow. Now, is it disproportionate to Sandy 
than the rest of the Country?
    Mr. Porcari. This transit cut applies only to Sandy aid.
    Mrs. Maloney. Only to Sandy aid. Oh my word. Oh, no. Is 
there any way we can change that?
    Mr. Porcari. If it is the will of Congress, obviously.
    Mrs. Maloney. Well, why were we able not to sustain the 
cuts in the Emergency Relief Program, but the cuts went through 
in the transit program? I am just curious. How was that 
decision made?
    Mr. Porcari. Well, the Federal Highway Emergency Relief 
funds were a little over $2 billion, and of that the cut, as I 
mentioned, was $101 million, which left a sufficient balance to 
not only take care of all the highway-related Hurricane Sandy 
relief that we believe will be required under the program, but 
to cover some of the existing priorities as well.
    Mrs. Maloney. And then this other $544 million is only to 
the transit money for Sandy?
    Mr. Porcari. That is correct.
    Mrs. Maloney. Wow. Who made that decision? Did you cut 
transit across the Country or just transit to New York?
    Mr. Porcari. That was a specific sequestration cut. We did 
not have any flexibility in that.
    Mrs. Maloney. Okay. Thank you for that information.
    I also wanted to talk about a flight from the great State 
of New York killing a number of people, including a very dear 
friend of mine. In February of 2009, Flight 3407 crashed on 
approach to Buffalo. It was very tragic. Both pilots, both 
flight attendants, and 45 passengers were killed. And the 
National Transportation Safety Board stated as follows, ``The 
pilots' performance was likely impaired because of fatigue.'' 
And both of the pilots operating the flight were found to have 
``commuted hundreds of miles prior to the flight.''
    In December of 2011, the Department of Transportation 
issued a new rule, known as the Pilot Fatigue Rule, to 
emphasize the responsibility of pilots and airlines to ensure 
that pilots are fit to fly when they report for duty. However, 
the new rule does not restrict the amount of commuting the 
pilots may undertake on their way to the airport, and I would 
like to ask, who would be the proper person, Mr. Scovel? Who 
would be the proper person to answer this?
    Have you recommended that the FAA ensure that the 
collection of data regarding domestic and commuting link for 
all part of 121 flight crews? And why did you make this 
recommendation? Were you the one who made the recommendation, 
Mr. Scovel?
    Mr. Scovel. We did, Mrs. Maloney. Thank you.
    Mrs. Maloney. Okay. Why did you make the recommendation and 
what type of study do you feel is required to understand the 
risk of fatigue associated with pilots' commute?
    Mr. Scovel. We made that recommendation, in part, because 
of just what you said, of NTSB's finding. We found that most 
significant and eye-opening in terms of when we looked at the 
FAA's available information on pilot domicile and commuting, it 
didn't exist.
    So we thought it would be helpful to the agency in their 
safety oversight responsibilities to at least begin to collect 
that data; not to jump to the conclusion that regulation of 
pilot domicile or commuting practices should be embarked on, 
but in light of the dearth of the data, NTSB's concern, the 
fact that the National Academy of Sciences, as well, did a 
study and found a lack of available data, we thought it would 
behoove the safety regulators to take a look.
    Mrs. Maloney. Well, Mr. Porcari, can I ask you very quickly 
do you think that the amount of review of existing studies and 
literature is sufficient?
    Mr. Porcari. We are not satisfied with the data that we 
have. Mr. Scovel mentioned the National Academy of Sciences' 
study. There was also some work done by our own FAA Aeromedical 
Institute on cabin crews that we used as a proxy for flight 
crews. In neither case did it draw a direct link between 
commuting time and fitness for duty, which is the 
responsibility of the air crew. But we all know that we can 
benefit from better data on this.
    Mrs. Maloney. Mr. Scovel, do you believe the FAA's 
examination of existing literature is enough?
    Mr. Scovel. Not yet.
    Mrs. Maloney. Why not?
    Mr. Scovel. The FAA owes us their response, and I believe 
it was due, in fact, at the end of last week, the 28th. We 
haven't yet seen it. I am told informally that it is on the 
way.
    Mrs. Maloney. Okay, I would like to ask the chairman if we 
could request that we get a copy of that. That is important to 
me and the families that lost their loved ones, and airline 
pilots and everyone else.
    Deputy Porcari, can you commit today to make an effort to 
collect and analyze primary source data on this issue to 
determine whether additional steps should be taken to ensure 
flight safety?
    Mr. Porcari. We are looking right now at what can be done 
in terms of reliable data, and what I can commit to you is that 
safety is our number one priority. We know that this is a real 
frustration of all of us and we need to understand this better 
at this point, so I would like, if I can, for the work that the 
FAA is completing now to speak for itself as the next step in 
this process.
    Mrs. Maloney. Well, thank you. My time has expired, 
regretfully. I have a lot of other questions, but thank you so 
much for your time and testimony.
    Mr. Farenthold. Thank you, Mrs. Maloney. We will do a quick 
second round. I know the ranking member has a couple questions 
he would like to ask and I just have one or two I would like to 
ask, so we will do that, if the panel will indulge us for a 
moment.
    Mr. Scovel, I read through your testimony and listened to 
what you had to say. The bulk of the IG recommendations out of 
DOT, rightly so, deal with safety issues, bridges in 
particular. I know in the district I represent, we have an 
aging bridge that we are looking at $600 million that we are 
going to have to replace, and that is not uncommon around the 
Country.
    What we didn't really talk about and one of the purposes of 
this hearing was where we can find savings to avoid having to 
do an additional tax increase to maybe offset some of the 
things with sequester. In some of the unimplemented reports 
from your Department, did you find some cost savings?
    Mr. Scovel. Of course we did. Thank you, Mr. Farenthold. 
Last year we had financial recommendations totaling $1.7 
billion for the Department. The year before that, $1.7 billion 
for the Department. That is not to say that all of those 
financial recommendations translate immediately to cost 
savings, because they do not.
    For some of them, for instance, we would expect that our 
recommendations, for instance, for the enterprise architecture 
or FAA facility consolidation and realignment, they are 
forward-looking. We would expect that they would lead to better 
decision-making and ultimate cost savings over the course of a 
long process to fully implement the program.
    Mr. Farenthold. Mr. Porcari, let me ask you another. We 
heard a lot of testimony about NextGen in aviation. I have the 
privilege of also serving on the Transportation and 
Infrastructure Committee Aviation Subcommittee, and we have 
heard a lot about the delays associated with NextGen.
    I also have the opportunity to speak to various folks 
within the airline industry on my commutes back and forth to 
Texas, and I hear time and time again that not only are these 
delays costing the airlines efficiency and money, but they are 
potentially costing us money. Do you have any idea how much we 
would have saved if we would have gotten NextGen done anywhere 
near on time?
    Mr. Porcari. We can get you some estimates of the 
accelerated benefits, but I will tell you just in one piece of 
it, using required navigation performance in Seattle-Tacoma 
Airport, where it is in place right now, it is saving the 
airlines a significant amount of money. It is also the 
equivalent to taking a couple thousand cars off the road in 
terms of environmental safety.
    Mr. Farenthold. And I know they are struggling getting a 
route from Houston to Corpus Christi that has all been done. 
There is some sort of other regulatory approval, I think 
environmental.
    Mr. Porcari. The Houston Metroplex initiative is actually 
one of the marquee early short-term benefits of NextGen. I have 
been down to Houston to actually meet with the 
interdepartmental staff working on it; they take great pride in 
getting the approvals concurrently, in designing the approaches 
and the other requires parts on an accelerated basis. They are 
literally committed to shaving years off of what would be a 
multi-year process.
    Mr. Farenthold. And is there anything that this committee 
can do to help expedite that process?
    Mr. Porcari. Congress has been very supportive, 
historically, of NextGen, which is a multi-year system of 
systems that, quite frankly, is very expensive. It is that 
continued year-to-year commitment so that we can plan ahead, so 
that the contracting community and the airlines can be 
confident to make those investments. That is the single most 
important thing, the consistency and predictability of it.
    Mr. Farenthold. And having had the privilege of touring 
some FAA facilities, you have some fine men and women working 
there, but you have 1950s technology in there, and I think the 
traveling public would be better served, as well as the 
environment and a vast variety of other factors, if that were 
taken care of.
    Mr. Porcari. Absolutely.
    Mr. Farenthold. And I will yield back the remainder of my 
time and recognize the ranking member for his second round of 
questions.
    Mr. Cummings. Thank you very much.
    First of all, I want to thank you all for being here, and 
thank you for your testimony, it has been extremely helpful. It 
is clear that more needs to be done. These recommendations need 
to be followed through, and I would hope that both Departments 
would act on them swiftly.
    Certainly, a lot of the discussion has gone to 
sequestration because that is what we are dealing with, and we 
have heard Mr. DesJarlais say there is more to come. He made 
that very clear. More cuts to come beyond sequestration.
    So I guess I am trying to figure out, as I listened to you, 
Ms. Tighe, and you, Mr. Scovel, I was saying to myself, you 
know, the IG offices have tremendous credibility. As a lawyer, 
I tremendously respect, and as a legislator I respect what you 
all do. And as you talked about, I think it was you that said 
there was some criminal investigation that you couldn't get 
into or whatever because of personnel. I wish that there was a 
level of trust with regard to other Federal employees outside 
of your agencies.
    I was telling a group on the Floor the other day, when they 
were talking about Federal employees, it was mentioned that 
Federal employees only leave at a .4 percent rate, Federal 
Government; in other words, their exit rate is not as extensive 
as the private sector because they have great benefits and 
because they have all this pay. And I tried to tell them if 
they listened to some Federal employees and asked them why they 
do what they do, in most instances it is because they want to 
help the public, period. It is not about pay.
    So when we look at people losing their jobs, and there are 
going to be some jobs lost; when we look at people taking 
furloughs, like the lady that I met the other day who is going 
to lose $800 a month, when she has two kids, trying to put one 
through college; that is pain. And we may act like it is not a 
big deal, but it is a big deal.
    The thing that I guess I am really concerned about is I 
want us to make sure that when we say that there is going to be 
impact, that is true; in other words, that if there is 
something else that can be done to avoid certain things, I want 
to know that those things are being done. But I guess we get, 
with situation like you, Mr. Miller, when you talk about a 
Sophie's choice, where you have disadvantaged kids trying to 
make it, struggling, trying to be all that God meant for them 
to be, and they can't get there when you are cutting things 
like WIC and all kinds of things. I know WIC is not your piece, 
but you know, the aid, Title I and all that. That is kind of 
tough.
    So, Mr. Porcari, coming back to you, you said that three-
fourths of your budget is exempt basically, is that what you 
are saying?
    Mr. Porcari. That is correct, 74 percent is exempt.
    Mr. Cummings. So this is my question. When I look at BWI in 
Baltimore, they already have, according to our account, about 
258,000 commercial flights a year. I am trying to figure out 
that backup, at some point something has to give. It seems like 
they are already flying from 5:00 in the morning to 1:00 at 
night. So I am trying to figure out what gives. Are you 
following what I am saying?
    Mr. Porcari. It is an excellent question, Mr. Cummings. 
Flight delays is like throwing a rock in a pond; it ripples 
through the entire system. So you may have flights taking off 
late as part of it; you may have cancellations. Because most 
passengers are moving through a hub and spoke system, they may 
miss their connections. Those connections are very tightly tied 
together in banks. So we can't fully quantify what all the 
impacts are. We believe that they will be significant.
    It is also important to point out that they are cumulative, 
in the sense that your airport experience also includes the TSA 
delays to get through the security line, then the potential 
flight delays beyond that.
    Mr. Cummings. Ms. Tighe, just one question. Exactly where 
does your responsibility end and theirs begin? For example, you 
talk about possible criminal investigations or whatever, and 
you talk about this money that has been lost, statute of 
limitations run. Where is the line there? You follow my 
question?
    Ms. Tighe. No, I understand. Generally, the IG makes 
recommendations. We are not management; we can't make 
management decisions. We make recommendations and the 
Department has to decide how to proceed on those. And it is 
really their responsibility to execute. If they come up with 
corrective action which we do get a chance to agree on, then it 
is really up to them to execute that. I mean, that is fully in 
their responsibility.
    Mr. Cummings. The reason why I ask that is when you talk 
about criminal investigations, I am just trying to figure out 
where is that line.
    Ms. Tighe. Generally, when you talk about criminal 
investigations, that is purely under my bailiwick, that is not 
something the Department decides one way or another. In fact, I 
think the secretary, under the IG Act, is specifically 
prohibited from impacting my investigations and what I initiate 
and what I don't. I do know that, resource-wise, I am going to 
have to drop numbers over the next couple years. Let's look 
past this year. I need to drop my numbers.
    Mr. Cummings. When you say drop your numbers, what do you 
mean?
    Ms. Tighe. In terms of people. Because I have too many 
people. We haven't had good attrition. And that is maybe a nice 
reflection of we are an okay place to work, but, on the other 
hand, for a budget it has created some problems. So we have to 
drop. We are going to have to do a buyout and do all the ways 
the Government has to reduce numbers. That is going to mean 
fewer investigators and fewer auditors. And that is fine if 
that is the decision we make that that is how we want to spend 
our money, but that is one of the consequences of, let's put 
sequestration aside. We are still looking at an era of lower 
budgets.
    Mr. Cummings. Thank you very much.
    And thank you all very much.
    Mr. Farenthold. Seeing we have no other members waiting to 
ask questions, I would like to take this opportunity on behalf 
of the entire committee to thank our panel for being in front 
of us. I realize we may not be the easiest committee to testify 
for. As our mission statement says, it is our solemn 
responsibility to hold the Government accountable to the 
taxpayers, and that is what we try to do. Chairman Issa likes 
to refer to us sometimes as the watchdogs, so thank you for 
coming before the dogs. Thank you very much, and we are 
adjourned.
    [Whereupon, at 12:58 p.m., the committee was adjourned.]


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