[Senate Hearing 113-186]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-186
 
                      THE IMPACTS OF SEQUESTRATION 

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

                                HEARING

                               before the

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARING

                   FEBRUARY 14, 2013--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations

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        committee.action?chamber=senate&committee=appropriations

                               __________

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                      COMMITTEE ON APPROPRIATIONS

               BARBARA A. MIKULSKI, Maryland, Chairwoman
PATRICK J. LEAHY, Vermont            RICHARD C. SHELBY, Alabama, 
TOM HARKIN, Iowa                         Ranking
PATTY MURRAY, Washington             THAD COCHRAN, Mississippi
DIANNE FEINSTEIN, California         MITCH McCONNELL, Kentucky
RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
TIM JOHNSON, South Dakota            SUSAN M. COLLINS, Maine
MARY L. LANDRIEU, Louisiana          LISA MURKOWSKI, Alaska
JACK REED, Rhode Island              LINDSEY GRAHAM, South Carolina
FRANK R. LAUTENBERG, New Jersey      MARK KIRK, Illinois
MARK L. PRYOR, Arkansas              DANIEL COATS, Indiana
JON TESTER, Montana                  ROY BLUNT, Missouri
TOM UDALL, New Mexico                JERRY MORAN, Kansas
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
JEFF MERKLEY, Oregon                 MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska                  JOHN BOOZMAN, Montana

                   Charles E. Kieffer, Staff Director
             William D. Duhnke III, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page

Opening Statement of Chairman Barbara A. Mikulski................     1
Sequester Impact.................................................     2
Statement of Senator Richard C. Shelby...........................     3
Super Committee..................................................     4
Additional Submitted Statements From Members.....................     5
    Prepared Statement of Senator Patrick J. Leahy...............     6
    Prepared Statement of Senator Richard J. Durbin..............     6
Statement of Hon. Daniel I. Werfel, Controller, Office of 
  Management and Budget..........................................     7
Effects of Sequestration.........................................     8
Prepared Statement of Daniel I. Werfel...........................     9
Statement of Hon. Arne Duncan, Secretary, Department of Education    11
Smart, Targeted Change Needed, Not Indiscriminate Cuts...........    11
Local Education Agencies Planning and Stability Would Be 
  Undermined.....................................................    12
Sequester Would Affect Most Vulnerable Students..................    12
Impact on Higher Education and Student Aid.......................    12
Impact Aid--Sequester Impact Affects This School Year............    13
Impact on Education Department Administration....................    13
Serious Ripple Effects From indiscriminate Education Cuts........    13
Impact on Ability to Remain Globally Competitive.................    13
Prepared Statement of Arne Duncan................................    14
Immediate Impact of Sequestration................................    14
Impact on State and Local Educational Agencies...................    14
Impact on Programs Serving the Neediest Students.................    15
Impact on Student Aid............................................    15
Departmental Management Impact...................................    15
Investing in the Future..........................................    16
Long-Term Impact.................................................    16
Statement of Hon. Shaun Donovan, Secretary, Department of Housing 
  and Urban Development..........................................    16
Department of Housing and Urban Development Programs.............    17
Prepared Statement of Shaun Donovan..............................    18
Harmful Effects of Sequestration on Homeless and Other Vulnerable 
  Populations Around the Country.................................    18
Sequestration's Damaging Effects on Families, Communities, and 
  the Economy Across the Nation..................................    19
Statement of Hon. Janet Napolitano, Secretary, Department of 
  Homeland Security..............................................    20
National Security and Economy....................................    20
Prepared Statement of Janet Napolitano...........................    22
Impact on the Economy and the American People....................    22
Disaster Preparedness and Recovery...............................    23
Border Security..................................................    23
Immigration Enforcement and Department of Homeland Security 
  Investigations.................................................    24
Transportation Security..........................................    24
Cybersecurity....................................................    24
United States Secret Service Investigations and Protection.......    25
Department of Homeland Security Research and Development.........    25
Department of Homeland Security Enterprise.......................    25
Statement of Hon. Ashton B. Carter, Deputy Secretary, Department 
  of Defense.....................................................    26
National Security................................................    26
Department of Defense Civilian Workforce.........................    27
Prepared Statement of Ashton B. Carter...........................    29
How Sequestration Would Work.....................................    30
What Sequestration Means.........................................    30
Near-Term Actions in Response to the Possibility of March 1 
  Sequester and Year-Long Continuing Resolution..................    31
Additional Actions That Will Need to be Taken Should 
  Sequestration and a Year-Long Continuing Resolution Occur......    31
Longer-Term Effects of Sequestration and Reductions in 
  Discretionary Caps.............................................    32
Sequestration Must be Avoided....................................    33
Sequester Impact on Education....................................    34
Disadvantaged Children...........................................    34
Impact on Title I and Children With Disabilities.................    35
Federal Housing Administration...................................    35
Unlimited Authority..............................................    36
Reprogramming....................................................    36
Return to Regular Order of Budget Process........................    36
Flexible Funding.................................................    37
Flexibility in Distributing Sequester Cuts Not a Solution........    37
Discretionary Caps...............................................    38
Statement of Senator Tom Harkin..................................    39
Statement of Senator Susan Collins...............................    40
Continuing Resolution............................................    41
Shifting Education Funds Among Programs Not a Solution...........    41
Statement of Senator Patty Murray................................    42
National Organizations (Listed Alphabetically)...................    43
Regional, State, and Local Organizations (Listed Alphabetically, 
  by State)......................................................    52
Housing..........................................................    82
Sequester Would Hit Hard Already Fiscally Strapped Local 
  Education Agencies.............................................    83
Childhood Education..............................................    83
Negative Impact of Larger Class Sizes............................    84
Impact on Head Start.............................................    84
Statement of Senator Dan Coats...................................    84
Statement of Senator Tom Udall...................................    86
National Security Labs...........................................    86
National Nuclear Security Administration.........................    87
Impacts on New Mexico's Military Installations...................    87
Statement of Senator Lisa Murkowski..............................    88
Priorities.......................................................    89
Indian Health Services...........................................    89
Statement of Senator Dianne Feinstein............................    90
National Steel and Shipbuilding Company..........................    91
Continuing Resolution............................................    91
Long-Lead Financing..............................................    91
Statement of Senator Roy Blunt...................................    92
Fiscal Year 2014 Budget..........................................    93
Sequester Effect on Impact Aid Funds.............................    93
Impact Aid Money.................................................    94
Onsite Inspectors................................................    94
Statement of Senator Mary Landrieu...............................    95
Border Patrol....................................................    96
Statement of Senator John Boozman................................    98
Veterans Benefits................................................    98
Shortfall in TRICARE.............................................    98
Federal Aviation Administration Disruption.......................    99
Air Force Cuts Facilities Maintenance Projects...................   100
Statement of Senator Jeanne Shaheen..............................   116
Sequester Costs..................................................   117
Program Costs....................................................   117
Office of Inspector General Staff................................   118
Statement of Senator Jerry Moran.................................   119
National Bioscience Agro-Defense Facility........................   119
National Institutes of Health Research Projects..................   121
Statement of Senator Mark Pryor..................................   122
Furloughs........................................................   122
Industrial Base..................................................   123
Statement of Senator Lamar Alexander.............................   124
Mandatory Programs Savings.......................................   124
Entitlement Spending.............................................   126
Statement of Senator Jeff Merkley................................   126
Budget Control Act of 2011.......................................   126
Education Is an Investment That Should Not Be Cut................   127
Section 8........................................................   128
Statement of Senator Thad Cochran................................   129
Statement of Senator Jack Reed...................................   129
Homeless Emergency Assistance and Rapid Transition to Housing Act 
  of 2009........................................................   130
Contracts........................................................   131
Statement of Senator Lindsey Graham..............................   131
National Security................................................   131
Sequester Impact on the Nation's Ability to Compete..............   132
Education Investment.............................................   133
Diversity of Students Obtaining Graduate Degrees.................   133
Start of Sequester...............................................   134
Sequestration Responses From Departments and Agencies............   135
Department of Agriculture........................................   136
    Additional Sequestration Information.........................   137
Department of Commerce...........................................   140
Department of Defense............................................   142
Department of Education..........................................   144
Department of Energy.............................................   146
Department of Health and Human Services..........................   147
Department of Homeland Security..................................   149
Department of Housing and Urban Development......................   150
Department of the Interior.......................................   150
    Department of the Interior...................................   151
Department of Justice............................................   152
Department of Labor..............................................   155
Department of State..............................................   157
    Impact of Sequestration on Department of State and the U.S. 
      Agency for International Development.......................   158
Department of Transportation.....................................   159
Department of the Treasury.......................................   160
Environmental Protection Agency..................................   161
    Potential Impacts of Sequestration...........................   161
    Air Programs.................................................   161
    Enforcement and Compliance Programs..........................   162
    Tribal Programs..............................................   163
    Research and Development Programs............................   163
    Water Programs...............................................   164
    Community Protection Reduced.................................   164
    EPA State Cleanup and Waste Program Cuts.....................   165
Federal Bureau of Investigation..................................   165
    Impacts of Sequestration by FBI Program......................   166
National Aeronautics and Space Administration....................   169
    Impacts of March 1, 2013, Sequester on Fiscal Year 2013 
      President's Budget Request for NASA........................   169
National Science Foundation......................................   171
Small Business Administration....................................   172
Social Security Administration...................................   173
Additional Committee Questions...................................   174
Questions Submitted to Danny I. Werfel...........................   174
Question Submitted by Senator Mary L. Landrieu...................   174
Questions Submitted by Senator Jack Reed.........................   174
Questions Submitted by Senator Frank R. Lautenberg...............   175
Question Submitted by Senator Jon Tester.........................   176
Question Submitted by Senator Mark Begich........................   176
Questions Submitted by Senator Thad Cochran......................   177
Questions Submitted by Senator Jerry Moran.......................   177
    National Institutes of Health Grants.........................   177
    National Institutes of Health Public-Private Partnerships....   178
    National Institutes of Health Authorities....................   178
    Centers for Medicare and Medicaid Services...................   178
Questions Submitted by Senator John Hoeven.......................   179
Questions Submitted to Janet Napolitano..........................   180
Questions Submitted by Senator Mary L. Landrieu..................   180
    Department of Homeland Security Cybersecurity--Risk to 
      Federal Computer Systems...................................   180
    Federal Emergency Management Agency Disaster Relief Fund--
      Impact on Recovery.........................................   181
    Sequester--Growing the Economy by Enhancing Travel to the 
      United States..............................................   181
Questions Submitted by Senator Frank R. Lautenberg...............   182
Questions Submitted by Senator Tom Udall.........................   182
Question Submitted by Senator Mark Begich........................   183
Questions Submitted by Senator Thad Cochran......................   183
Questions Submitted by Senator Daniel Coats......................   184
Questions Submitted by Senator Jerry Moran.......................   184
    National Bio and Agro-Defense Facility.......................   184
Questions Submitted to Ashton Carter.............................   185
Question Submitted by Senator Patty Murray.......................   185
    Cuts to the Department of Defense/Mental Health..............   185
Question Submitted by Senator Dianne Feinstein...................   185
    Intelligence Activities......................................   185
Prepared Statement of Feeding America............................   187
    The Emergency Food Assistance Program Administrative Funds...   187
    Women, Infants, and Children Nutrition Program...............   188
    Senior Meals.................................................   188
    Emergency Food and Shelter Program...........................   188
Prepared Statement of the Zuni Tribe.............................   189


                      THE IMPACTS OF SEQUESTRATION

                              ----------                              


                      THURSDAY, FEBRUARY 14, 2013

                                       U.S. Senate,
                               Committee on Appropriations,
                                                    Washington, DC.
    The committee met at 9:35 a.m., in room SH-216, Hart Senate 
Office Building, Hon. Barbara A. Mikulski (chairwoman) 
presiding.
    Present: Senators Mikulski, Leahy, Harkin, Murray, 
Feinstein, Durbin, Landrieu, Reed, Pryor, Tester, Udall, 
Shaheen, Merkley, Begich, Shelby, Cochran, Alexander, Collins, 
Murkowski, Graham, Kirk, Coats, Blunt, Moran, and Johanns.


           opening statement of chairman barbara a. mikulski


    Chairwoman Mikulski. Good morning everybody.
    Today, we are convening a hearing of the Appropriations 
Committee. It is the first hearing of the Appropriations 
Committee in the 113th Congress, and it is the first hearing 
with me as the chairwoman of the full committee.
    The focus of today's hearing will be on the impact of the 
sequester on our Government agencies and on critical national 
functions that are important to the security, safety, and 
future of the American people.
    Today, as I take and assume this gavel, I am mindful of the 
history that has come before me, and I want to acknowledge the 
previous leadership of our outstanding chairs.
    It is a great honor for me to chair this full committee, 
but I think we all carry a special place in our hearts, in our 
presence here today, for Senator Daniel K. Inouye, who was a 
great American and a great chairman.
    This committee has an incredible history of excellent 
chairmanship on both sides of the aisle, and we also need to 
acknowledge the incredible roles that Senator Ted Stevens and 
Senator Robert C. Byrd have played.
    I want to acknowledge the wonderful cooperation I received 
from Senator Thad Cochran. On December 20, I became the chair 
of this committee. Senator Cochran was the vice chair, and he 
helped me in those early days to expeditiously move the 
Hurricane Sandy appropriations. I will be forever grateful for 
his steady hand, his wise counsel, and the direct assistance 
that he provided me.
    Now I want to acknowledge my ranking member, and in this 
committee it is called the vice chairman, Senator Richard C. 
Shelby. It is well known to many of the members of the 
Appropriations Committee in the Senate that Senator Shelby and 
I have a longstanding personal and professional relationship. 
We came to the House of Representatives together; we served on 
the same committee; and we have served in the Senate together.
    I look forward to working with him as my vice chair in 
continuing the tradition of bipartisanship that has been 
characteristic of this committee. My relationship with Senator 
Shelby is based on mutual trust, mutual respect, and a desire 
to move things forward in a regular order.
    We know that we will disagree on matters of policy, but we 
feel that if we could agree on matters of process, and get 
beyond Government of ultimatum, Government by crisis, 
Government from lurching from one dramatic event after the 
other, and return to a regular order, that the country will be 
better governed, and the American people will be better served.
    This Appropriations Committee, I remind everybody, is one 
of only two congressional committees mandated in the 
Constitution of the United States--a revenue committee, to 
gather revenue, to operate the Government of the United States; 
the other is to make wise and prudent expenditures in the 
interest of the United States. We are constitutionally 
mandated.
    All other committees, except Finance and Appropriations, 
were created by the Congress to govern itself. We were created 
to help govern the Nation.


                            sequester impact


    And this is what brings us to our hearing today. We are 
going to focus on the impact of the sequester.
    I think it is a bad idea. I think it is bad policy. I think 
it is bad economic policy. I think it is bad governance policy. 
And I really don't like it.
    It is my goal, working with the leadership, to be able to 
find a way to vitiate the sequester and hope that the higher 
powers find a way to vitiate it for the 9 years that it is 
mandated.
    What we hope to accomplish today is to take a look at the 
impact of the sequester on the American people.
    I want to thank all of the panelists for coming.
    Mr. Werfel, we want to thank you. We are eager to get the 
overview from the Office of Management and Budget (OMB).
    Deputy Secretary Carter, we thank you, because you are 
going to speak about defense, and we have heard a lot about 
defense. And it has been well-heard and well-spoken.
    But there is a lot more to the security of the United 
States, so we look forward to hearing from you, Secretary 
Napolitano, on the impact on homeland security.
    In the United States military, those who wear the uniform 
will be protected in the sequester, and they should be. But 
there are others who wear a uniform to protect the United 
States of America, and what is the impact on them?
    Then we have to look on the future of our country, the day-
to-day needs, the ability to build the middle class from the 
middle on out. And this is where, Secretary Donovan, we want to 
talk to you about the housing economy. What is it that we need 
to do?
    And, Secretary Duncan, you hold the future of America in 
your hands. Yes, we want to out-innovate, but first we have to 
out-educate. So we want to hear about the impact of the 
sequester on educational reform.
    Whether we look at national security or our domestic 
agencies, I believe we are at a rendezvous with destiny. We 
must solve this problem.
    But I don't think the American people quite understand the 
impacts where the sequester mandates an $85 billion cut, 
equally to be shared by the Defense Department and the domestic 
Departments.
    And though you are national security, Secretary Napolitano, 
your department is grouped in with the domestics, which is what 
homeland security is.
    I fear furloughs, layoffs, and services not delivered to 
the American people. I also have to cope, along with my Members 
here, with the issues related to the fiscal cliff where we 
already have to take $4 billion, also the issues of--because of 
implementing homeland security.
    So we want to look at the impact on these agencies. For me, 
it will be about jobs and community safety. Are we going to 
have air traffic controllers? Are we going to have security 
guards furloughed? What about the Federal Bureau of 
Investigation and Drug Enforcement Administration? What about 
the people who staff our Federal prisons? And in the area of 
health and education, I understand 4 million Meals On Wheels 
won't be delivered. What are they going to do, go to a nursing 
home that is also shut down because we are cutting payments? We 
are cutting funding for special education, already an unfunded 
Federal mandate.
    So we are here to listen to you.
    And, of course, Deputy Secretary Carter, we know the 
impact, that when defense sneezes, the economy could catch a 
cold or pneumonia. I fear those layoffs or furloughs, not only 
on the dedicated personnel at the Department of Defense (DOD), 
but also shipyard workers that will affect several States. So 
we want to hear from you.
    So enough about hearing from me. Working with the 
leadership, I will seek to try to find a balanced solution of 
increased revenue; yes, strategic cuts; and a prudent look at 
mandatory spending. There needs to be a balanced solution where 
the burden isn't borne just by cuts on domestic agencies alone.
    I would like to make sure the sequester doesn't happen this 
year, but, again, not happen over the next 9 years.
    Now I would like to turn to my vice chairman, Senator 
Shelby, for his opening statement. We will go to the panel 
after that.


                 statement of senator richard c. shelby


    Senator Shelby. Thank you, Chairwoman----
    Chairwoman Mikulski. Mikulski.
    Senator Shelby. Yes, Mikulski, I know that. I can't----
    Chairwoman Mikulski. Not Murkowski. She is long and lanky 
and Republican.
    I am a little bit----
    Senator Shelby. For Senator Mikulski, thank you for your 
kind words.
    Today, we will hear from our witnesses on the impact of the 
sequester, which is appropriate and timely, I believe, because 
the cuts are poised to take effect in just 15 days. It should 
be noted that the sequester is something that the Congress and 
the President set in motion knowing full well that this day 
would come.
    The sequester will bring spending cuts that are automatic 
and across the board for most discretionary accounts. A rigid 
formula will determine how cuts are made, instead of what is 
best for economic growth, safety, and prosperity.
    Cuts will happen without regard to a program's merit or 
efficacy. Some of the most severe cuts, as the chairwoman has 
said, will hit defense programs.
    Although we must reduce spending, it should be done, I 
believe, in a deliberate way. This is why I opposed the bill 
that created the sequester in the first place.


                            super committee


    The sequester was supposed to be a last resort if the so-
called ``super committee'' failed to agree upon measures to 
reduce the deficit.
    In the end, the super committee reached an impasse. It did 
not produce even a penny of deficit reduction.
    It has been more than a year since the super committee's 
failure. Although we have seen the sequester coming, we haven't 
taken any steps to fix it. In fact, the Congress has only 
delayed it further.
    This situation presents a perfect opportunity, I believe, 
for the President to exercise some leadership. Although he has 
called on the Congress to act, he has not put forward a 
proposal, on his own, with specific options.
    Also, when I hear the President and some Members of 
Congress say that the solution must include raising taxes 
further, I question their seriousness in fixing the overall 
problem.
    As the Congressional Budget Office's (CBO) latest analysis 
shows, we do not have a revenue problem. We have a spending 
problem. Revenues are already on a path to increase and to 
return to levels that are in line with our historical average 
of 18 to 19 percent of gross domestic product (GDP).
    In contrast, Government spending remains high during the 
next 10 years and is expected to grow beyond its 40-year 
average. This will occur even with discretionary spending caps 
and the sequester put in place by the Budget Control Act of 
2011 (BCA). In fact, under current law, CBO estimates that 
discretionary spending will fall by more than 3 percentage 
points less than its historical average.
    The real driver of our debt is not discretionary spending, 
as we all know, but entitlement spending. As CBO reports, this 
combination of an aging population, rising healthcare costs, 
and an expansion of health insurance subsidies, will drive up 
the cost of mandatory programs. Absent reform of entitlements, 
this will lead to an unstoppable debt spiral.
    I believe the issue is only compounded by the cost of 
servicing our debt, which will rise from about $220 billion in 
fiscal year 2012 to more than $850 billion projected in fiscal 
year 2023. By then, interest payments will equal 60 percent of 
our discretionary budget.
    This growing indebtedness, as CBO states, poses an 
increased risk of precipitating a fiscal crisis, the likes of 
which we have never seen.
    The warning signs that we are moving toward a fiscal 
meltdown have been in place for a long time. The Congress has 
repeatedly failed to heed these signs. It has been years since 
the Congress has even had a regular order budget process with 
appropriation measures agreed upon by both Chambers. Instead, 
important decisions on spending and taxes happen at the 11th 
hour behind closed doors.
    I believe the American public deserves a transparent and 
accountable budget process that restores fiscal order. 
Sequestration should not be part of the process. It certainly 
is no long-term solution to our spending problem.
    It should be a cautionary tale for the Congress. The 
sequester we face today is the tip of the iceberg compared to 
the austerity measures that will be necessary in the future if 
the Congress does not act soon on comprehensive fiscal reform.
    I believe comprehensive fiscal reform must include both tax 
reform and spending cuts. One without the other is only a 
partial solution.
    In his State of the Union Address, the President reiterated 
what appears to be his goal of $4 trillion in deficit reduction 
over 10 years. That number alone sounds staggering, but when it 
is compared with our actual long-term unfunded obligations, $4 
trillion barely scratches the surface.
    It is common practice here in Washington when faced with an 
overwhelming problem to define it down and then declare victory 
while pursuing half-measures. That is why I am concerned that 
the debate surrounding the sequester will become a diversion 
from the real problem facing us.
    The time for partial and temporary solutions is long past. 
What we need, I believe, is a collective acknowledgement of the 
problem and a comprehensive joint effort to reach a long-term 
solution. Anything short of that will inevitably place the 
American economy on an irreversible downward glide path.
    Today, we will hear about the dire consequences of the 
impending cuts. I do not doubt that they will be painful to 
bear for many agencies and people across the Federal 
Government.
    If there is a way to mitigate the pain while we continue to 
enforce some fiscal discipline, I am open to discussing it. But 
I believe it is very important to reemphasize that the 
sequester and whatever temporary solution we may devise is just 
a precursor to the main event.
    Thank you.
    Chairwoman Mikulski. Thank you very much, Senator Shelby.


              additional submitted statements from members


    Before we begin, any member who wishes to submit an opening 
statement may do so and they will be placed in the record at 
this point.
    [The statements follow:]
             Prepared Statement of Senator Patrick J. Leahy
    Madam Chairwoman, I commend you for the very energetic way you have 
taken on your new responsibilities, and for starting things off with 
this hearing. There is no more pressing topic.
    Although today's witnesses will focus on the impact of 
sequestration on a number of Departments and agencies, there are 
consequences for the budget of the Department of State and foreign 
operations, which is about the national security of the United States.
    It might interest people to know that the entire State, Foreign 
Operations, and Related Programs budget amounts to 1 percent of the 
Federal budget, not the 15 or 20 percent some mistakenly believe.
    That 1 percent is what we have to operate our Embassies and 
consulates in more than 290 locations, to carry out diplomacy, respond 
to humanitarian crises, and build alliances with security and trading 
partners. There are dozens of examples of how sequestration would harm 
these efforts, but I will mention just three:
  --Cuts in diplomatic security, at a time when everyone agrees we need 
        to do more to protect our Foreign Service Officers overseas. 
        Funding for local guards, diplomatic security personnel, and 
        Embassy security would be reduced by $181 million from the 
        current level.
      This would force the State Department to choose between reducing 
        the number of local guards at overseas posts, delaying 
        maintenance at existing facilities, or postponing construction 
        of secure facilities to replace those that do not meet current 
        safety standards--at a time of increasing attacks against U.S. 
        overseas diplomatic posts.
  --Global health programs that prevent the spread of AIDS and pay for 
        vaccines for children, women's health, and to combat malaria 
        and tuberculosis, would be cut by $468 million from the current 
        level.
      A reduction of this size would end life-saving drugs to more than 
        165,000 people infected with the AIDS virus. It would result in 
        thousands more deaths from malaria. Tens of thousands of people 
        infected with tuberculosis will not receive treatment.
  --Funding for disaster and refugee aid would be cut by $156 million 
        from the current levels. With 750,000 Syrian refugees and 5,000 
        fleeing the country each day, now is not the time to cut these 
        programs. Other funds to help victims of drought, famine, and 
        extremist violence in Mali, Somalia, and Sudan, and to prevent 
        those crises from getting worse, will also be cut.
      These are real world consequences, not only for the people of 
        those countries but for the security of the United States, and 
        I want to be sure people are aware of what is at stake.
    I worry that we are losing sight of the fact that sequestration was 
included in the Budget Control Act of 2011 as an incentive to 
negotiate. The idea was that it would have such painful consequences 
that rational minds would replace it with a thoughtful and balanced 
approach to deficit reduction.
    Unfortunately, that has not yet happened, and time is running out.
    I thank each of the witnesses for being here to give voice to a 
side of the conversation we have not heard--the impact of nondefense 
cuts--and to explain what these cuts would mean to programs the 
American people depend on.
                                 ______
                                 
            Prepared Statement of Senator Richard J. Durbin
    Our national military strategy has long called on our military to 
be prepared to defend the United States on two fronts on two different 
continents. Today, the Department of Defense (DOD) is preparing to 
defend itself on two different fronts: sequestration and the threat of 
a year-long continuing resolution.
    These two fronts would hit DOD hard and have serious effects on our 
troops, the families that support them, and our industrial 
capabilities.
    For our troops, sequestration will mean an immediate impact on 
training and readiness. Eighty percent of Army combat units will have 
training events delayed. Fifty-five percent of Marine Corps combat 
units will have unsatisfactory readiness ratings. Navy ship deployments 
will be cut by nearly one-quarter.
    Sequestration would mean significant cuts to family support 
programs. For example, DOD has contracts to provide financial 
counseling services to military families to help deal with the 
pocketbook issues of having a loved one deployed to a war zone. There 
are also contracts for career resource centers, which help find jobs 
for military spouses when a family relocates from base to base. These 
contracts would be sharply reduced--or outright terminated--under 
sequestration.
    We are also looking at significant job losses in the industrial 
base. These job losses are not just jobs building next-generation 
weapons that we may not need. The Navy estimates up to 30,000 layoffs 
at shipyards and depots that service the equipment we already own. The 
Army has estimated 5,000 layoffs at its own depots.
    There is a right way and a wrong way to save money in the defense 
budget. Sequestration is the wrong way. Across-the-board cuts hurt good 
programs by cutting them for no reason; and prolong bad programs by not 
cutting them enough.
    The right way to save money in the defense budget is to first go 
line-by-line and eliminate unneeded or redundant spending. In fiscal 
year 2012, the Defense Appropriations Act cut 775 underperforming 
programs to save $23.5 billion. In fiscal year 2011, the bill cut 677 
programs to save $18.1 billion.
    There have also been bills introduced in the House and Senate to 
give DOD unchecked transfer authority to deal with the effects of a 
continuing resolution. We all know that a continuing resolution is a 
bad way to run Government, but the answer is not to hand over the power 
of the purse to the DOD.
    The Congress needs to pass an appropriations bill to provide for 
DOD. If the DOD were to be under a full-year continuing resolution for 
the first time in its history, there would be no amount of transfer 
authorities and quick-fixes that would fix all the problems that would 
arise. There simply aren't enough band-aids to address the problems of 
a year-long continuing resolution for defense.
    Fixing the sequester doesn't simply mean looking out for DOD. 
Secretary Panetta spoke at Georgetown University and said:

    ``Let me also remind you that the sequester does serious damage to 
the nondefense side of the budget as well. It's not just defense, it's 
education, loss of teachers, it's child care. I think the estimate is 
that some 100,000 children will be kicked out of Head Start. It's about 
healthcare, 700,000 women and children will no longer receive 
nutritional assistance. It's about a number of other programs that 
support our quality of life in this country. And our quality of life is 
important to our national security.''

    Chairwoman Mikulski. Now we are going to go to our panel, 
and I am going to explain how this is going to work.
    Ordinarily, we would have a series of panels. We would lead 
it off with OMB, then we would go to the domestics, and we 
would wrap up with national security. In the interest of time 
and efficacy, we are going to have one panel, one table, and 
then be able to ask the questions, hopefully, where we can get 
cross-communication going.
    Mr. Werfel, we are going to start with you, then 
Secretaries Duncan, Donovan, and Napolitano. Dr. Carter, we 
will wrap up with you. Then we are going to go to questions, 
alternating on both sides of the aisle, led off by Senator 
Shelby and myself, and then with Senators in the order of their 
arrival.
    So, Mr. Werfel, representing OMB, we know that Mr. Zients 
had obligations with Presidential responsibility, so, please, 
why don't you go ahead and give us the view from OMB?
    And then I am not going to introduce everybody. We are 
going to keep it going.
STATEMENT OF HON. DANIEL I. WERFEL, CONTROLLER, OFFICE 
            OF MANAGEMENT AND BUDGET
    Mr. Werfel. Thank you.
    Madam Chairwoman, Vice Chairman Shelby, members of the 
committee, good morning. I am here today to discuss the 
automatic spending reductions known as sequestration currently 
scheduled to occur March 1 as well as the impacts of these 
reductions and the actions the administration is taking to 
prepare to implement sequestration, should it be necessary.
    I want to start today by reiterating a point that the 
administration has made on numerous occasions: Sequestration is 
bad policy, and the administration believes that the Congress 
should pass balanced, bipartisan deficit reduction to avoid it.

                        EFFECTS OF SEQUESTRATION

    If allowed to occur, sequestration would have significant 
and destructive consequences for domestic investments, national 
security, and core Government services.
    The cuts required by sequestration harm middle-class 
families, seniors, and the most vulnerable. The President 
believes that these indiscriminate, across-the-board cuts are 
not a responsible way to address our collective goals of 
balanced deficit reduction.
    Working together with the Congress, we have already made 
significant progress in this regard, enacting more than $2.5 
trillion in deficit reduction over the past 2 years. The vast 
majority of this progress has come in the form of spending cuts 
with roughly $3 in spending cuts for every $1 in additional 
revenue.
    The President believes that we need to have a balanced 
approach to further deficit reduction that includes spending 
cuts but also includes common-sense tax reform that can raise 
additional revenue.
    As part of the American Taxpayer Relief Act of 2012, the 
date on which the President would have to issue a sequestration 
order was delayed by 2 months from January 2, 2013, to March 1, 
2013. This delay was paid for in a balanced manner with $24 
billion in deficit reduction split evenly between additional 
revenue and spending cuts.
    This approach set an important precedent of avoiding 
sequestration through balanced deficit reduction that combines 
additional revenue and spending cuts.
    Should the Congress fail to act in the next 2 weeks, a 
sequestration of approximately $85 billion will be ordered for 
the remainder of fiscal year 2013, split evenly between defense 
and nondefense programs. This will lead to a number of deeply 
troubling consequences in critical Government programs that we 
all depend on.
    It would mean fewer teachers to educate our children, less 
funding for schools to help disadvantaged students with 
disabilities, less research into life-threatening diseases. It 
would cut nutrition assistance for vulnerable populations and 
reduce funding for essential mental health programs.
    It would keep Federal agencies from conducting the 
inspections necessary to keep our food, our air, and our water 
safe and clean. It would make our country less secure at home, 
reducing our ability to protect our borders, stay ahead of 
emerging cybersecurity threats, and keep crime off our streets 
and out of our neighborhoods. And it would make us less safe 
abroad by causing critical degradations in the support for and 
readiness of our Armed Forces.
    There is no amount of planning that can avoid these 
damaging impacts. Prudence dictates, however, that the Federal 
Government take all reasonable steps to be ready to implement 
sequestration in the most responsible way possible.
    Accordingly, Federal agencies and OMB have been engaged in 
ongoing planning activities for months to determine how to 
operate under a potential sequestration, keeping in mind our 
primary responsibility to execute our core mission areas on the 
behalf of the American people.
    Let me assure you that should a sequestration order have to 
be issued by the President on March 1, we will be ready to 
implement the law. But let me also reiterate, no amount of 
planning or preparation on our part, no matter how thorough or 
careful, can mitigate the significant and highly destructive 
impacts that sequestration would have.

                           PREPARED STATEMENT

    Sequestration is not a responsible long-term solution for 
deficit reduction. The long-term solution is a balanced 
approach of spending reductions and revenues that builds upon 
the significant deficit reduction we have already worked 
together to achieve, strengthens the middle class, protects 
investments critical to our Nation's continued growth and 
prosperity, and avoids sequestration.
    Thank you. I look forward to answering your questions.
    [The statement follows:]
                 Prepared Statement of Daniel I. Werfel
    Madam Chairwoman, Ranking Member Shelby, members of the committee, 
good morning.
    I am here today to discuss the automatic spending reductions, known 
as sequestration, required by section 251A of the Balanced Budget and 
Emergency Deficit Control Act of 1985 (BBEDCA), as amended, as well as 
the impacts of these reductions and the actions the administration is 
taking to prepare to implement the sequestration, should it be 
necessary, on March 1, 2013.
    I want to start today by reiterating a point that the 
administration has made on numerous occasions: sequestration is bad 
policy, and the administration believes that the Congress should pass 
balanced, bipartisan deficit reduction to avoid it. If allowed to 
occur, sequestration would have a wide range of significant and 
destructive consequences for domestic investments, national security, 
and core Government services. The President believes that these 
indiscriminate, across-the-board cuts are not a responsible way to 
address our collective goals of balanced deficit reduction. Instead, 
what we need, and what the Nation deserves, is a comprehensive package 
of deficit reduction that balances additional revenues with targeted 
spending cuts, while continuing to make investments in research, 
education, and infrastructure that create jobs and strengthen the 
middle class.
    Working together with the Congress, we have already made 
significant progress in this regard, enacting more than $2.5 trillion 
in deficit reduction over the past 2 years. The vast majority of this 
deficit reduction has come in the form of spending cuts, with roughly 
$3 in spending cuts for every $1 in additional revenue. The President 
believes that we need to continue to have a balanced approach to 
further deficit reduction that includes spending cuts as well as 
common-sense tax reform that can raise additional revenue. That is why 
he has put forward sensible reforms that would further reduce spending 
in Medicare and other entitlement programs as part of a broader plan to 
reduce the deficit by a total of over $4 trillion, the level economists 
and elected officials from both parties recognize is needed to 
stabilize our debt. This balanced approach, as opposed to the 
indiscriminate, irresponsible cuts imposed by sequestration, is the 
right path toward continuing to reduce our deficit.
    From the beginning, the inclusion of sequestration as part of the 
Budget Control Act of 2011 (BCA) was meant to be a forcing mechanism to 
encourage the Congress to pursue just this type of balanced deficit 
reduction. The BCA, which was passed with bipartisan majorities in both 
chambers of the Congress and signed by the President, reduces the 
deficit through two mechanisms. First, it establishes binding 
discretionary caps that reduce the deficit by almost $1 trillion over 
10 years. Coming on top of hundreds of billions of additional 
discretionary cuts enacted earlier in 2011, the caps reduce 
discretionary funding to its lowest level as a share of the economy 
since the Eisenhower administration more than half a century ago. These 
are significant and difficult cuts to discretionary spending that are 
already locked in, and they represented an important first step down 
the road toward balanced deficit reduction.
    Second, the BCA established a congressional joint committee charged 
with the task of developing a proposal that would achieve at least $1.2 
trillion in deficit reduction. However, last November the joint 
committee announced that it could not reach agreement on a balanced, 
comprehensive deficit reduction plan. This failure triggered an 
enforcement mechanism of automatic funding cuts, known as 
sequestration, to achieve the required deficit reduction. In fiscal 
year 2013, savings would be achieved through a blunt, across-the-board 
cut to Federal funding, with the bulk of the reductions coming from 
discretionary programs. From fiscal year 2014 through fiscal year 2021, 
the reductions in discretionary funding would be implemented by 
reducing the discretionary budget caps, and nonexempt mandatory 
programs would be sequestered each year.
    As part of the American Taxpayer Relief Act (ATRA) of 2012, the 
date on which the President would have to issue a sequestration order 
was delayed by 2 months, from January 2, 2013 to March 1, 2013. This 
delay was paid for in a balanced manner, with $24 billion in deficit 
reduction split evenly between additional revenue and spending cuts. 
This approach set an important precedent of avoiding sequestration 
through balanced deficit reduction that combines additional revenue and 
spending cuts, and the President believes that the Congress should 
adhere to this precedent in enacting additional deficit reduction.
    Should the Congress fail to act in the next 2 weeks, a 
sequestration of approximately $85 billion will be imposed for the 
remainder of fiscal year 2013, split evenly between defense and 
nondefense programs. As required by law, the sequestration would be 
applied as a uniform percentage reduction to all non-exempt budgetary 
accounts, and the reductions would then be implemented equally across 
all programs, projects and activities (PPAs) within each account. While 
the Office of Management and Budget (OMB) has not yet finalized the 
percentage reductions that would apply to all nonexempt accounts, our 
preliminary estimates indicate that sequestration would require a 
reduction of roughly 5 percent for nondefense programs and roughly 8 
percent for defense programs. Importantly however, these percentage 
reductions are based on the assumptions of a full year of budget 
authority. In reality, should a sequestration order have to be issued 
on March 1, agencies would be required to implement the cuts over the 
remaining 7 months of the fiscal year, meaning that in many programs 
the effective cuts would be closer to 9 percent for nondefense programs 
and 13 percent for defense programs when compared to what agencies 
would spend during this period under normal circumstances. Any 
budgetary cuts of this magnitude would have significant repercussions, 
regardless of how they are applied.
    The sequestration would lead to a number of deeply troubling 
consequences in critical Government programs that we all depend on. It 
would mean fewer teachers to educate our children, less funding for 
schools to help disadvantaged students or children with disabilities, 
and less research into life-threatening diseases. It would cut 
nutrition assistance for vulnerable populations, reduce funding for 
essential mental health programs, and eliminate resources provided to 
small businesses and homeowners. It would keep Federal agencies from 
conducting the inspections necessary to keep our food, our air, and our 
water safe and clean. It would make our country less secure at home, 
reducing our ability to protect our borders, stay ahead of emerging 
cybersecurity threats, and keep crime off our streets and out of our 
neighborhoods. And it would make us less safe abroad by causing 
critical degradations in the support for and readiness of our Armed 
Forces.
    Across the Federal Government, agencies will have to take 
significant and painful steps to implement sequestration. As my fellow 
witnesses today will testify, critical Federal grant and assistance 
programs would be cut, reducing or eliminating services and programs 
for millions of Americans. States and localities would see Federal aid 
slashed. The Department of Defense would have to reduce training and 
equipment maintenance for later deploying units, delay needed 
facilities maintenance, and significantly reduce investments in weapons 
programs. Core operations would have to be shut down or curtailed 
across nearly all Federal agencies. Businesses that work with the 
Federal Government would see their contracts reduced or terminated, 
which could lead to substantial job losses. And agencies would have to 
consider wide-ranging furloughs of hundreds of thousands of Federal 
employees, preventing them from carrying out their duties on behalf of 
the American people and slashing the paychecks they rely on to support 
their families.
    There is no amount of planning or preparation that can avoid these 
damaging impacts. Prudence dictates, however, that the Federal 
Government take all reasonable steps to be ready to implement 
sequestration in the most responsible way possible. Accordingly, 
Federal agencies and OMB have been engaged in ongoing planning 
activities for months to determine how to operate under a potential 
sequestration.
    In conducting this planning, we must keep in mind our primary 
responsibility to execute our core mission areas on behalf of the 
American people and take all appropriate steps to protect this mission 
to the extent possible. With that as a framework, OMB has instructed 
agencies to adhere to a number of specific guiding principles in their 
planning efforts, such as:
  --identifying and addressing operational challenges that could 
        potentially have a significant deleterious effect on the 
        agency's mission or present risks to life, safety, or health;
  --reviewing grants and contracts to determine where cost savings may 
        be achieved in a manner that is consistent with the applicable 
        terms and conditions, remaining mindful of the manner in which 
        individual contracts or grants advance the core mission of the 
        agency;
  --identifying the most appropriate means to reduce civilian workforce 
        costs where necessary; and
  --taking into account funding flexibilities, including the 
        availability of reprogramming and transfer authority.
    OMB has issued multiple memoranda to agencies to help provide 
guidance and clarity on navigating these issues, as well as held 
regular discussions with senior leadership across the executive branch. 
In September, OMB also issued a roughly 400-page report providing 
detail regarding the reductions that would be required in more than 
1,200 budget accounts in the event of sequestration, given certain 
assumptions specified by law. Let me assure you that, should a 
sequestration order have to be issued by the President on March 1, we 
will be ready to implement the law.
    That said, this preparation, while the prudent and appropriate 
thing to do, unfortunately diverts agencies' time and attention from 
their core missions in service of the American people, to say nothing 
of the disruptive effects and anxiety it imposes on Federal employees, 
contractors, and their families. It is wasteful and inefficient for the 
Government to operate under this cloud of uncertainty and to divert 
resources to plan for extraordinarily disruptive contingencies that are 
within the Congress' authority to avoid.
    Finally, it is important to reiterate that no amount of planning or 
preparation on our part, no matter how thorough or careful, can 
mitigate the significant and highly destructive impacts that 
sequestration would have. Sequestration is not a responsible way to 
reduce the deficit. Should the Congress require more time to reach this 
goal and finish the job of deficit reduction, the President has made 
clear that the right course is to pass a small package of spending cuts 
and tax reforms that would delay the damaging effects of sequestration 
until the Congress finds a way to replace these cuts with a smarter 
solution.
    Sequestration is not a long-term solution for deficit reduction. 
The solution is a balanced approach of spending reductions and revenues 
that builds upon the significant deficit reduction we have already 
worked together to achieve, strengthens the middle class, protects 
investments critical to our Nation's continued growth and prosperity, 
and avoids sequestration.
    Thank you. I look forward to answering your questions.
STATEMENT OF HON. ARNE DUNCAN, SECRETARY, DEPARTMENT OF 
            EDUCATION
    Secretary Duncan. Thank you so much, Madam Chairwoman, and 
congratulations. And members of the committee, thank you for 
this opportunity.
    I just wanted to say quickly to Senator Kirk, great to see 
you again, great to be working with you.
    With your support, we have been able to help States, 
districts, and communities make changes that are bringing major 
benefits for all students, particularly the most vulnerable.
    The issue of sequestration is vital, and I appreciate this 
opportunity to testify about this topic once again. I hope the 
committee members will keep those most vulnerable students in 
the forefront of their minds, because they are the ones who 
will be hurt most if the Congress chooses to let sequestration 
happen.

         SMART, TARGETED CHANGE NEEDED, NOT INDISCRIMINATE CUTS

    I want to be clear that I believe we absolutely have 
opportunities at all levels of Government to make spending on 
education more productive and more efficient. But boosting 
educational productivity requires smart, targeted changes to 
programs, not indiscriminate across-the-board budget cuts.
    Sequestration would force us to cut crucial services, doing 
real damage to the life chances of millions of students. There 
is only unnecessary pain. There is no palatable plan B.

  LOCAL EDUCATION AGENCIES PLANNING AND STABILITY WOULD BE UNDERMINED

    Here is who would get hurt with the sequester: The biggest 
cuts take effect next school year, the 2013-2014 school year, 
but their impact would start sooner. When I ran the Chicago 
public schools, we made hiring decisions in the spring, like 
pretty much every other district. Under sequestration, 
districts would have to plan to make do with less, meaning 
fewer teachers and staff, larger class sizes, fewer courses, 
less tutoring, and higher unemployment.
    This undermines the very stability and predictability every 
school system works so hard to achieve, and hurts families, 
children, teachers, and school staff. And the vast majority of 
school districts, obviously, will not be able to make up for 
these cuts at the local level.

            SEQUESTER WOULD AFFECT MOST VULNERABLE STUDENTS

    When the cuts hit, not surprisingly, they will hurt the 
most vulnerable students the worst, because Federal education 
resources generally are targeted to those children with the 
greatest need.
    At the K-12 level, here is what that means concretely: 
Title I grants serve almost 23 million students in high poverty 
schools, and special education State grants help about 6.5 
million special needs students. Sequestration would cut title I 
by $725 million, which could affect 1.2 million disadvantaged 
students and risk the jobs of about 10,000 teachers and support 
staff.
    In special education, we could be forced to cut almost $600 
million, which would require States and districts to cover the 
cost of approximately 7,200 teachers, aides, and other staff.
    And in early childhood education, we have seen some very 
tough cuts as well. In Head Start, some 70,000 students could 
be kicked out. And as the President talked about in his State 
of the Union Address, we are trying to do a lot more in terms 
of early childhood education, not go in the opposite direction.
    Doing that to our most vulnerable children is educational 
malpractice, economically foolish, and morally indefensible.

               IMPACT ON HIGHER EDUCATION AND STUDENT AID

    In higher education, the impact is just as destructive. We 
would have to cut back collection of student debt, decreasing 
payments to the Treasury, and fall behind on servicing up to 29 
million student loans. We would also cut more than 70,000 
students from grant and work-study programs that help needy 
students finance the cost of college. Clearly, that is not the 
path we want to go down to regain our place as the Nation that 
leads the world in college completion.

         IMPACT AID--SEQUESTER IMPACT AFFECTS THIS SCHOOL YEAR

    While those cuts don't take effect until next school year, 
others will hit right away. And these cuts affect schools and 
programs that draw much of their direct funding from us, the 
Federal Government.
    Who would be hurt right away? Disproportionately, families 
of our military servicemembers, individuals with disabilities, 
and people living on Native American lands.
    Just to give you one quick example, in the Gallup-McKinley 
County public schools in New Mexico, which enrolls about 7,000 
students living on Indian lands, sequestration would cut almost 
$2 million from Impact Aid, which makes up more than one-third 
of that district's budget. These are young people we 
desperately need to invest more in, not less.

             IMPACT ON EDUCATION DEPARTMENT ADMINISTRATION

    And we have already warned our own employees at the 
Department of Education of possible furloughs, which across-
the-board cuts would force us to make. We have already made 
significant cuts in our Department's budget, and we believe in 
continuing to look for efficiencies.

       SERIOUS RIPPLE EFFECTS FROM INDISCRIMINATE EDUCATION CUTS

    But let me say this: Education isn't just another line in 
the budget, just another Government expense. Education is 
fundamentally an investment. It is an investment in the future 
of our children, our communities, our competitiveness, and our 
country. High-quality education from cradle all the way through 
to career is the only way to build a strong and vibrant middle 
class and to foster upward economic and social mobility.
    At a time when most young Americans today don't meet the 
minimum qualifications to enlist in the military, it is also an 
investment in our national security.
    Budgets, as all of you know, are not just numbers. Whether 
we as a Nation choose to invest in children and education is a 
crystal-clear statement about our values. Children listen to 
what we say, but it is our actions and not our words that tell 
them whether or not we truly care.
    As President Obama said in his State of the Union Address, 
these are ``. . . sudden, harsh, and arbitrary cuts that would 
devastate priorities like education, energy, and medical 
research.'' It would certainly slow down our recovery and cost 
us hundreds of thousands of jobs.

            IMPACT ON ABILITY TO REMAIN GLOBALLY COMPETITIVE

    Internationally, I promise you, our competitors are keeping 
their education systems strong and striving to actually get 
better faster. Do we want to help our children successfully 
compete in a global economy, or do we want our country to drift 
in the opposite direction?
    Madam Chairwoman, you and I both know the Congress can take 
another better path. Sequestration would represent an 
uncompromising, rigid, tone-deaf Government at its worst.

                           PREPARED STATEMENT

    I would echo the President in asking that you take the time 
to develop a budget that will permanently replace the 
sequester. As I testified last summer, the President and all of 
us here on his team remain ready to work with all of you on a 
long-term plan to cut the deficit while investing in strategic 
programs that will strengthen our families, our economy, and 
our global leadership. The American people deserve no less.
    Thank you.
    [The statement follows:]
                   Prepared Statement of Arne Duncan
    Madam Chairwoman and members of the committee: Thank you for this 
opportunity to talk about the impact of a March 1 sequestration on 
education programs. The across-the-board nature of the cuts would focus 
an ill-advised reduction on our grant programs and the funds we need to 
administer them. In short, sequestration would have a negative impact 
on the education of our Nation's children and adults, reducing funding 
for teachers and other staff, cutting grants and work-study programs 
that help families pay for college, and potentially slicing payments to 
the contractors we rely on to administer our financial aid programs.
    Education is the last place to be reducing our investment as the 
Nation continues to climb out of the recent recession and to prepare 
all of its citizens to meet the challenges created by global economic 
competitiveness in the 21st century. Indeed, I can assure you that our 
economic competitors are increasing, not decreasing, their investments 
in education, and we can ill afford to fall behind as a consequence of 
the indiscriminate, across-the-board cuts that would be required by 
sequestration.
                   immediate impact of sequestration
    Some key programs would feel the impact of sequestration 
immediately. For example, many school districts qualifying for Impact 
Aid receive a high percentage of their overall funding from the 
Department and use the money during the current school year. Often the 
districts get the funds because they have large concentrations of 
children of military families or children living on Indian lands. These 
and other districts receive Impact Aid funds because the presence of 
Federal activities can both increase the number of students and 
decrease the local property tax base. Sequestration would eliminate 
roughly $60 million for Impact Aid Basic Support Payments for schools 
that are counting on those funds to meet the basic needs of students 
and to pay teacher salaries this spring, potentially forcing districts 
to make wrenching, mid-year adjustments. Many districts are already 
dealing with reductions of instructional and non-instructional staff 
and delaying needed building maintenance for buildings that are in 
serious disrepair.
    An example of the fiscal impact on these programs is that the 
Killeen Independent School District in Texas, which has 23,000 
federally connected children, including 18,000 military dependents, 
would lose an estimated $2.6 million in Impact Aid funds. Similarly, 
the Gallup-McKinley County Public Schools in Gallup, New Mexico, would 
lose nearly $2 million of the funds the district receives from the 
Impact Aid program to help meet the educational needs of 7,500 
federally connected children, including 6,700 who live on Indian lands. 
This impact is severe, given that Impact Aid funds make up 35 percent 
of the district's total budget.
    In the Vocational Rehabilitation State Grants program, funds are 
used to provide services to individuals with disabilities to help them 
become employed. The grants fund operations during the current fiscal 
year, and the Department provides about 80 percent of these operational 
funds. Thus, sequestration would immediately eliminate $160 million 
from funds supporting activities that help these individuals prepare 
for, obtain, or retain employment. In particular, counselor caseloads 
would likely increase, as would wait times for individuals to receive 
essential vocational rehabilitation services, hurting the effort to 
lower the unemployment rate for these individuals, which already is 
significantly higher than that of the general population.
             impact on state and local educational agencies
    For Federal education programs that are forward-funded, the impact 
of sequestration would not reduce funding until the 2013-2014 school 
year, but local districts will be making decisions in April and May of 
this year about which jobs to cut and which teacher contracts to renew. 
Districts will have to plan on less funding. Fewer teachers and staff 
could mean larger class sizes, fewer courses or subject areas, less 
tutoring for struggling students, reductions in counseling, and more 
difficulty in retaining recently hired teachers. And, local economies 
will suffer from the higher unemployment and the uncertainty of the 
staff.
    Survey data last year showed that 80 percent of school districts 
would not be able to make up the losses from sequestration, a finding 
that should not be surprising given that State and local budgets are 
only just beginning to recover from the recent financial crisis and 
economic recession. Any inroads they have made to rebuild or 
restructure programs as the economy recovers and local tax revenues 
increase would be undermined by a significant loss in Federal education 
funds.
            impact on programs serving the neediest students
    In particular, sequestration would hit hard at Federal, State, and 
local efforts to improve educational opportunities for the Nation's 
neediest students and their families. Title I Grants to local 
educational agencies (LEAs) serve nearly 23 million students in high-
poverty schools and Special Education State Grants help State 
educational agencies (SEAs) and LEAs provide a free appropriate public 
education (FAPE) to roughly 6.5 million special needs students. 
Sequestration would reduce title I funding by some $725 million, 
potentially eliminating support to an estimated 2,700 schools serving 
1.2 million disadvantaged students, while also putting at risk the jobs 
of approximately 10,000 teachers and aides serving these students. 
Formula grants to States under part B of the Individuals with 
Disabilities Education Act could be reduced by as much as $598 million, 
which would require States and districts to cover the cost of 
approximately 7,200 teachers, aides, and other staff who are needed to 
provide a FAPE for students with disabilities, placing additional 
burden on cash-strapped States and districts.
                         impact on student aid
    The law specifically exempts Pell grants from sequestration. The 
law also includes a special rule on student loans that specifies a 
small increase in the origination fee for loans made after the 
sequester order. This origination fee change would require adjustments 
in systems and records for those getting loans late in school year 
2012-2013 and early in school year 2013-2014.
    Cutting mandatory administrative funds for Student Aid programs 
will affect the servicing of student loans by Not-For-Profit (NFP) 
contract servicers. Sequestration could require each NFP servicer 
payment to be reduced. The impact of reducing payments to the NFP 
student loan servicers would be significant and could adversely impact 
as many as 29 million student loan borrowers. NFPs may have to lay off 
or furlough many of their contract employees in States such as 
Pennsylvania, Wisconsin, Missouri, Tennessee, Iowa, and Utah. Some 
smaller NFPs may run operational risks and even be forced to close, 
disrupting service and potentially causing problems with payment 
processing for all student and parent borrowers they service.
    The Department also uses for-profit contractors to administer 
functions like FAFSA processing, Pell grant disbursements, loan 
originations, collections, and related tasks. The Department's ability 
to collect defaulted student debt and provide high-quality services to 
borrowers once they are out of school would likely be hampered by 
sequestration, due to possible cuts in contracts with private-sector 
entities. If we do not collect on loans, fewer funds will be repaid to 
the Treasury, and our deficit will increase. That is the opposite of 
what sequestration is supposed to achieve. It is another illustration 
of why sequestration is a bad policy. To underscore the magnitude of 
the risk in this area, during the 2011-2012 award year, the Department 
delivered or supported the delivery of approximately $172 billion in 
grant, work-study, and loan assistance to almost 15 million 
postsecondary students attending more than 6,000 postsecondary 
institutions.
    The administrative cuts would hamper our aid delivery. Award 
funding would also be cut in campus-based college programs like Federal 
Work-Study and Supplemental Educational Opportunity Grants. Federal 
Work-Study would be cut by $49 million, eliminating 33,000 students 
from participation. Supplemental Educational Opportunity Grants would 
be cut by $37 million, with a resultant reduction of 71,000 recipients.
                     departmental management impact
    The sequester also would likely require the Department to furlough 
many of its own employees for multiple days. The full repercussions are 
unknown, but extended furloughs would significantly harm the 
Department's ability to prevent fraud, waste, and abuse in the very 
large, complex student financial assistance programs. Furloughing 
employees also would hurt all the Department's other activities, 
including making grant awards on a timely basis.
                        investing in the future
    Sequestration is a bad policy. It cuts all programs by the same 
percentage, no matter the purpose or the performance. We need to 
replace sequestration with balanced deficit reduction that includes 
revenues. And we need to make smart spending investments within the 
discretionary caps established by the Budget Control Act of 2011. 
That's what has been done at the Department of Education. From 2010-
2012, 49 programs have been eliminated. Those programs didn't work, had 
achieved their purpose, or could be done more effectively. The 
elimination of those programs saves $1.2 billion annually. Those 
savings have been largely reinvested in programs with a greater chance 
for success in improving education. We also saved $68 billion by 
reforming the student loan programs in 2010; unnecessary payments to 
third parties were eliminated. Much of those savings were reinvested in 
Pell grants, and some reduced the deficit. These are examples of 
selective cuts and investments where the Congress made choices based on 
performance and evaluations and cost-savings. That is a much better 
approach than the mindless across-the-board sequestration.
    It's also important to note that even without sequestration, 
domestic discretionary spending has already been declining. Nonsecurity 
discretionary spending is now on a path to reach its lowest level as a 
share of GDP since the Eisenhower administration. In addition, State 
and local spending has been cut due to the financial crisis. At a time 
when we are just starting to see signs of renewed economic growth, as 
well as the positive impact of historic education reforms in programs 
like Race to the Top and School Improvement Grants that will contribute 
to future growth and prosperity, it just makes no sense at all to 
undermine this progress through the sequestration of Federal education 
funds.
                            long-term impact
    The long-term impact of sequestration could be even more damaging. 
By reducing education funding now and in the coming years, it would 
jeopardize our Nation's ability to develop and support an educated, 
skilled workforce that can compete in the global economy. In addition 
to what you are hearing today from the Department of Defense, cutting 
education funding also could hurt our military preparedness, because we 
won't have enough high school graduates for our uniformed services. 
Already, nearly 25 percent of American students who do not graduate 
from high school will not be able to serve in the military, and 30 
percent of high school graduates still lack the basic math, science and 
English competency skills to pass the military's entrance exam. 
Sequestration would only make this situation worse.
    I have given you many reasons why sequestration is a step in the 
wrong direction. I will stop now and be glad to answer your questions.
STATEMENT OF HON. SHAUN DONOVAN, SECRETARY, DEPARTMENT 
            OF HOUSING AND URBAN DEVELOPMENT
    Secretary Donovan. Chairwoman Mikulski, Vice Chair Shelby, 
and the members of the committee, I particularly want to 
recognize Senator Murray, Senator Collins, the chair and 
ranking member of our Appropriations subcommittee, for their 
great partnership together and with us in making difficult but 
important decisions for our agency and for the country. Thank 
you, all.
    And thank you for the opportunity to testify today 
regarding the impacts of sequestration on the Department of 
Housing and Urban Development (HUD) and our programs.
    Should sequestration go into effect on March 1, the cuts 
would be deeply destructive to HUD programs and those who rely 
on them, including hundreds of thousands of middle class and 
low-income individuals. It would also cause significant damage 
to our Nation's housing market at a time when it is helping to 
lead our economic recovery.
    More specifically, sequestration would mean about 125,000 
individuals and families, more than one-half of whom are 
elderly or disabled, losing assistance provided through the 
Housing Choice Voucher Program and becoming at risk of 
homelessness.

          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PROGRAMS

    Sequestration would also result in more than 100,000 
homeless and formerly homeless people, the majority of whom are 
families, disabled adults, or veterans, being removed from 
their current housing or emergency shelter programs, putting 
them at substantial risk of returning to the streets.
    Cuts to the Housing Opportunities for Persons With AIDS 
program, would result in 7,300 fewer low-income households 
receiving supportive housing assistance and threaten to add 
even further to the population of homeless Americans.
    Cuts to our Office of Healthy Homes and Lead Hazard Control 
and related programs would result in more than 3,000 of the 
most vulnerable children not being protected from lead 
poisoning or other hazards in their homes.
    Cuts to housing counseling grants would result in 75,000 
fewer households receiving vital foreclosure protection, 
prepurchase, rental, or other counseling. This means fewer 
families making responsible, informed choices and greater risk 
throughout the housing market.
    Sequestration will also have a broader, more damaging 
effect--economic impact--on our still-fragile local economies. 
While sequestration cuts $212 million from our HOME and 
Community Development Block Grant (CDBG) programs, communities 
lose nearly $500 million in additional funding from private and 
other sources because they can no longer leverage those 
critical Federal dollars.
    Cuts to public housing authority budgets would mean more 
deferred maintenance and capital repairs on top of an existing 
capital needs backlog of more than $25.6 billion nationwide, 
endangering the future of these apartments, the families, and 
their neighborhoods.
    In 2012, CDBG created or retained almost 22,000 permanent 
jobs and more than 32.5 million people benefited from the CDBG. 
Sequestration would jeopardize those jobs and services as well.
    Indeed, across all of HUD's programs, sequestration will 
likely result in the loss of tens of thousands of jobs at a 
time when continued recovery depends on a stable job market, 
especially in our hard-hit construction industry.
    HUD initiatives and programs have been central to the 
recent recovery in the housing market, but our Department's 
ability to perform critical activities that support the 
recovery will be severely hampered by sequestration as a result 
of furloughs that would be required for agency staff.
    Sequestration would jeopardize the Federal Housing 
Administration's (FHA) ability to process loans at a time when 
FHA represents a substantial portion of all loan originations 
for the single-family market, including almost one-half of all 
first-time homebuyers across the country, as well as 25 percent 
of all new multifamily construction. That risks destabilizing 
the market and slowing our economic recovery.
    Finally, sequestration seriously threatens our Hurricane 
Sandy recovery efforts. A 5-percent cut amounts to $3 billion 
from the Hurricane Sandy supplemental just passed by the 
Congress, taking away crucial funding for repair and recovery 
from housing, transportation, and other areas.
    Just as an example, the funding that would be cut from CDBG 
would help make necessary repairs to more than 10,000 homes and 
small businesses in the region.
    Whether it is the manmade disaster of the recession or the 
natural disaster of Hurricane Sandy, HUD has been central to 
recovery efforts, and we cannot afford to threaten them.
    As the President said on Tuesday, we know that broad-based 
economic growth requires a balanced approach to deficit 
reduction with everybody doing their fair share, not an 
approach that clearly harms the middle class and the poor, and 
comes at the expense of our Nation's economy.
    Sequestration is a blunt and indiscriminate instrument that 
was intended to ensure more measured and deliberate cuts would 
be made. It is my hope, and all of our hope in the 
administration, that the Congress can find a bipartisan 
solution to our budget and deficit concerns without risking our 
economic recovery and imposing the kind of serious damage that 
the sequester makes inevitable.

                           PREPARED STATEMENT

    Again, Madam Chairwoman, thank you for inviting me to 
testify. I am eager to work with you and your committee in any 
way I can to help avoid sequestration.
    Thank you.
    [The statement follows:]
                  Prepared Statement of Shaun Donovan
    Chairwoman Mikulski, Ranking Member Shelby, and members of the 
committee, thank you for the opportunity to testify today regarding the 
effects of the across-the-board Federal cuts that would result from the 
potential sequestration now scheduled for March 1, just 2 weeks from 
tomorrow. As the President stated last week, these arbitrary and 
indiscriminate cuts ``will cost us jobs and significantly slow down our 
recovery.'' With respect to the Department of Housing and Urban Develop 
(HUD) that I am privileged to lead, these cuts would be deeply 
destructive, would damage the economy, and would harm numerous 
families, individuals, and communities across the Nation that rely on 
HUD programs.
   harmful effects of sequestration on homeless and other vulnerable 
                     populations around the country
    The March 1 sequestration would have devastating effects on 
homelessness and on other vulnerable groups that HUD works with on 
housing needs across the country. In particular:
  --About 125,000 individuals and families, including elderly and 
        disabled individuals, could lose assistance provided through 
        the Housing Choice Voucher (HCV) program and be at risk of 
        becoming homeless. The HCV program, which is administered by 
        State and local public housing agencies (PHAs), provides 
        crucial assistance to families and individuals in renting 
        private apartment units. There may be even more families 
        affected by the sequestration cuts to the extent that PHAs are 
        forced to absorb annual funding losses in less than a full 12-
        month timeframe. In addition, since sequestration will also cut 
        PHA administrative fees for the HCV program, numerous PHAs may 
        find continued operation of the program financially untenable 
        and thus stop operating the program entirely, which will harm 
        even more families and individuals, including homeless 
        veterans.
  --Sequestration cuts would also result in more than 100,000 formerly 
        homeless people, including veterans, being removed from their 
        current housing or emergency shelter programs, putting them at 
        substantial risk of becoming homeless. Much of this damage will 
        be done through cuts to HUD's Continuum of Care programs, under 
        which formerly homeless families and individuals are quickly 
        rehoused and given other assistance to move them toward self-
        sufficiency. In addition, the sequestration cuts would 
        eliminate some of the key funding for the Nation's shelter 
        system for the homeless provided by the Emergency Solutions 
        Grants (ESG) program. Because ESG is considered a critical 
        glue, holding together the shelter system across the country, 
        the cuts could have a ripple effect and force some shelters to 
        close down altogether, with even more devastating effects. Over 
        the last several years, we have made significant progress in 
        reducing homelessness and in achieving the national goal of 
        ending veterans' homelessness. These sequestration cuts would 
        lead us in the opposite, and tragically wrong, direction.
  --Sequestration cuts to the Housing Opportunities for Persons With 
        AIDS program would result in 7,300 fewer low-income households 
        receiving permanent and short-term supportive housing 
        assistance, including rent or utility assistance. This could 
        result in some people falling into homelessness, which would 
        further exacerbate this tragic problem.
  --Safe, decent, and affordable housing is desperately needed in 
        Indian Country, and HUD is an important source of assistance. 
        Sequestration cuts would mean that more than 900 fewer Native 
        American families would be able to obtain housing loan 
        guarantees.
  --Sequestration would cut important programs offered by HUD's Office 
        of Healthy Homes and Lead Hazard Control and related HUD 
        programs addressing housing-related health hazards. As a 
        result, more than 3,000 vulnerable children would not be 
        protected from lead poisoning and other safety hazards in the 
        home. Such danger to our Nation's most precious resource--our 
        children--would be another tragic result of the arbitrary cuts 
        required by sequestration.
  sequestration's damaging effects on families, communities, and the 
                       economy across the nation
    From HUD's perspective, the March 1 sequestration would also have 
even broader harmful effects on middle class families, on communities, 
and on the economy across the Nation. Specifically:
  --Sequestration would result in 75,000 fewer households receiving 
        foreclosure prevention, pre-purchase, rental, or other 
        counseling though HUD housing counseling grants. This 
        counseling is crucial for middle class and other families who 
        have been harmed by the housing crisis from which we are still 
        recovering, and are trying to prevent foreclosure, refinance 
        their mortgages, avoid housing scams, and find quality, 
        affordable housing. Studies show that housing counseling plays 
        a crucial role in those efforts. Distressed households who 
        receive counseling are more likely to avoid foreclosure, while 
        families who receive counseling before they purchase a home are 
        less likely to become delinquent on their mortgages.
  --The impact of sequestration would force PHAs to defer maintenance 
        and capital repairs to public housing, leading to deteriorating 
        living conditions and, over the longer term, risking the 
        permanent loss of this affordable housing that serves 1.1 
        million of the Nation's poorest residents. The cuts would also 
        harm the local economies in the areas served by PHAs. PHA 
        spending on maintenance and capital repairs results in 
        expenditures for goods and services throughout local economies. 
        Sequestration would also reduce the number of families served 
        by HUD programs designed to help families in public housing 
        become more self-sufficient.
  --The cuts caused by sequestration would prevent State and local 
        communities that receive funding under the HOME Investment 
        Partnerships program from building and rehabilitating 2,100 
        affordable housing units for low-income families. These cuts 
        will have an even broader effect on local economies, 
        particularly because historically, every $1 of HOME funding is 
        leveraged with almost $4 of other governmental or private 
        investment for the production or rehabilitation of affordable 
        single or multi-family housing. This will mean fewer jobs in 
        and more harm to local construction and related industries.
  --Sequestration will also result in significant cuts to community 
        development funding for public services, facilities, and 
        infrastructure improvements across the country. This will harm 
        middle class families who rely on such services and reduce jobs 
        in local economies across the Nation. These funds improve our 
        local communities, and also support jobs for construction 
        workers and others who build or rehabilitate public facilities, 
        infrastructure, and housing, and for those providing social 
        services at the local level. Historically, it has been 
        estimated that community development related funding over the 
        past decade has sustained 400,000 jobs in local economies 
        across the country. In 2012 alone, nearly 21,800 permanent jobs 
        were created or retained using CDBG funds and more than 32.5 
        million people benefited from CDBG funded public facilities 
        activities. The negative effects of cuts in community 
        development funding are multiplied because for every $100 of 
        funding from HUD for such activities, another $150 in other 
        governmental or private investment in such community 
        development is generated. In addition, these cuts will 
        adversely impact confidence in the long-term sustainability of 
        the private market rental housing that HUD supports.
  --Only weeks ago, the Congress appropriated community development and 
        other funds for the recovery and rebuilding of the devastation 
        caused by Hurricane Sandy and other natural disasters. The 
        March 1 sequestration would force cuts to those crucial funds, 
        preventing communities from making critical investments. This 
        will not only prolong the suffering in a region that has been 
        hit again this past weekend by a new storm. It will also cost 
        jobs that would be created by full expenditure of the approved 
        funding and slow the full recovery and rebuilding of a region 
        that is critical to our economy.
  --Finally, sequestration would directly affect the employees who work 
        for HUD itself, along with their families and communities. I am 
        privileged to lead just more than 9,000 HUD employees around 
        the Nation in 81 field offices around the country. Specific 
        plans are still being reviewed and finalized, but we believe 
        that furloughs or other personnel actions may well be required 
        to comply with cuts mandated by sequestration. The public will 
        suffer as the agency is simply less able to provide information 
        and services in a wide range of areas, such as FHA mortgage 
        insurance and sale of FHA-owned properties.
                               conclusion
    As the President and many Members of Congress have made clear, 
sequestration is a blunt and indiscriminate instrument that was passed 
to help ensure that action is taken on a balanced deficit reduction 
package, not as an actual method of deficit reduction via arbitrary 
budget cuts. I firmly agree with the President's statement just last 
week that ``our economy is headed in the right direction, and it will 
stay that way as long as there aren't any more self-inflicted wounds 
coming out of Washington.'' Sequestration is just such a self-inflicted 
wound that would have devastating effects on our economy and on people 
across the Nation.

STATEMENT OF HON. JANET NAPOLITANO, SECRETARY, 
            DEPARTMENT OF HOMELAND SECURITY
    Secretary Napolitano. Thank you, Chairwoman Mikulski, Vice 
Chair Shelby, and members of the committee. I appreciate the 
opportunity to discuss the impacts of sequestration on the 
Department of Homeland Security (DHS).
    DHS has a broad mission that touches almost every aspect of 
our economy. We secure our aviation sector, screening 2 million 
domestic air travelers each day. We protect our borders and 
ports of entry while facilitating trade and travel.
    Last year, our CBP officers processed more than 350 million 
people and facilitated nearly $2.3 trillion in trade.
    We enforce the immigration laws. We partner with the 
private sector to protect critical infrastructure. And we work 
with States and communities to prepare for and respond to 
disasters of all kinds, like Hurricane Sandy, while supporting 
recovery and rebuilding.

                     NATIONAL SECURITY AND ECONOMY

    Put simply, the automatic budget reduction mandated by 
sequestration would be destructive to our Nation's security and 
to our economy. It would negatively affect the mission 
readiness and capabilities of the men and women on the 
frontlines. It would undermine the significant progress DHS has 
made over the past 10 years to build the Nation's preparedness 
and resiliency.
    Perhaps most critically, it would have serious immediate 
consequences to the flow of trade and travel at our Nation's 
ports of entry, including many ports represented by members of 
this committee.
    At the major international airports, average wait times to 
clear customs will increase by 50 percent. And at our busiest 
airports like Newark, John F. Kennedy, Los Angeles and Chicago 
O'Hare, peak wait times, which can already reach more than 2 
hours, could grow to 4 hours or more.
    Such delays not only would cause thousands of missed 
passenger connections, they would have severe economic 
consequences at both the local and national levels.
    Furloughs of Transportation Security Officers will increase 
domestic passenger wait times at our busiest airports by more 
than 1 hour.
    On the Southwest border, our biggest land ports could face 
waits of 5 hours or more, functionally closing these ports 
during core hours.
    At our seaports, delays in container examinations would 
increase up to 5 days, resulting in increased costs to the 
trade community and reduced availability of consumer goods and 
raw materials. Mid-size and smaller ports would experience 
constrained hours of operation, affecting local cross-border 
communities. And at cruise terminals, processing times could 
increase up to 6 hours, causing passengers, again, to miss 
flights, delay trips, and increase costs.
    Trade and travel are absolutely essential to our economy. 
Indeed, according to the U.S. Travel Association, 1 new 
American job is created for every 33 travelers arriving from 
overseas. And according to the International Trade 
Administration, each extra minute of wait times at our busiest 
southern ports can result in $116 million in economic loss.
    Sequestration would have serious consequences for our other 
missions. CBP would have to furlough all of its employees, 
reduce overtime, and eliminate hiring to backfill positions, 
decreasing the number of work hours equivalent to more than 
5,000 CBP agents.
    The Coast Guard would have to reduce its presence in the 
Arctic by nearly one-third and surface operations by more than 
25 percent, affecting management of our Nation's waterways, as 
well as fisheries enforcement, drug interdiction, migrant 
interdiction, port security, and other law enforcement 
operations.
    Under sequestration, Immigration and Customs Enforcement 
(ICE) would be forced to reduce detention and removal. We would 
not be able to maintain the 34,000 detention beds mandated by 
the Congress. Sequestration would reduce our investigative 
activities into things like human smuggling, 
counterproliferation, and commercial trade fraud.
    Sequestration reductions would require us to scale back the 
development of critical capabilities for the defense of Federal 
cybersecurity networks, and the Nation's core critical 
infrastructure would also remain vulnerable.
    Sequestration would have impacts on our Nation's disaster 
preparedness, response, and recovery efforts. It would reduce 
the DRF, the Disaster Relief Fund, by more than $1 billion, 
affecting survivors still recovering from Hurricane Sandy, the 
tornadoes in Tuscaloosa and Joplin, and other major disasters 
across the Nation. And DHS grant funding would be reduced to 
its lowest level in 7 years, leading to layoffs of State and 
local emergency personnel across the country.
    Threats from terrorism and the need to respond to and 
recover from natural disasters will not diminish because of 
budget cuts. Even in this current fiscal climate, we do not 
have the luxury of making significant reductions to our 
capabilities without placing the Nation at risk.
    DHS will continue to preserve our frontline priorities as 
best we can, but no amount of planning can mitigate the 
negative effects of sequestration on the security of the 
country.

                           PREPARED STATEMENT

    As we approach the first of March, I urge the Congress to 
act to prevent sequestration and ensure the safety, security, 
and resiliency of the Nation.
    [The statement follows:]
                 Prepared Statement of Janet Napolitano
    Chairwoman Mikulski, Ranking Member Shelby, and members of the 
committee: Thank you for the opportunity to appear today to discuss the 
Budget Control Act of 2011 and, specifically, the sequestration that is 
currently mandated to be ordered on March 1.
    The President has made clear that the Congress can and should act 
to avoid sequestration in a balanced and fiscally responsible manner. 
If allowed to occur, sequestration would be disruptive and destructive 
to the Department of Homeland Security (DHS), its missions, and our 
Nation's security and economy.
    The automatic budget reductions--which must be applied in equal 
measure to virtually every program, project, and activity that DHS 
has--would negatively affect the mission readiness and capabilities of 
the men and women on our front lines. Sequestration would undermine the 
significant progress DHS has made over the past 10 years to build the 
Nation's preparedness and resiliency.
    Sequestration would roll back border security, increase wait times 
at our Nation's land ports of entry and airports, affect aviation and 
maritime safety and security, leave critical infrastructure more 
vulnerable to attacks, hamper disaster response time and our surge 
force capabilities, and significantly delay cyber security 
infrastructure protections. In addition, sequestration would 
necessitate furloughs of up to 14 days for a significant portion of our 
frontline law enforcement personnel, and could potentially result in 
reductions in capabilities across the Department.
    Today, I would like to provide you with specific examples of the 
potential impacts of sequestration on the Department and the 
consequences that will be felt by the American people.
             impact on the economy and the american people
    Sequestration would have significant impacts on our economy, 
including travel, tourism and trade.
    DHS's U.S. Customs and Border Protection (CBP) staff and operate 
329 ports of entry (POEs) across the country, welcoming travelers, and 
facilitating the flow of goods essential to our economy. Each day, 
almost 1 million people arrive at these ports of entry by land, sea, 
and air. In fiscal year 2012 alone, DHS processed more than 350 million 
travelers at our POEs, including more than 98 million international air 
travelers, as well as $2.3 trillion worth of trade. Trade and travel is 
absolutely essential to our economy. Indeed, according to the U.S. 
Travel Association, one new American job is created for every 33 
travelers arriving from overseas.
    Any increases in wait times at the borders will have a direct 
impact on our Nation's economy. A study commissioned by the Department 
of Commerce's International Trade Administration found that border wait 
times at the five busiest southern border POEs result in an average 
economic output loss of $116 million per minute of delay. This study 
states that in 2008, delays cost the U.S. economy 26,000 jobs and $6 
billion in output.
    Reductions mandated under sequestration would require furloughs and 
reduced staffing at our Nation's POEs and airport security checkpoints, 
increasing wait times for travelers and slowing commerce across the 
country. Reduced CBP staffing would make 4- to 5-hour wait times 
commonplace and cause the busiest ports to face gridlock situations at 
peak periods. In addition, furloughs of Transportation Security 
Administration (TSA) Transportation Security Officers (TSOs) would 
substantially increase airline passenger wait times by as much as 1 
hour at the Nation's largest and busiest airports. Such delays would 
affect air travel significantly, potentially causing thousands of 
passengers to miss flights with negative economic consequences at the 
both the local and national levels.
    Additional effects of sequestration would be felt by the American 
public from reductions to U.S. Coast Guard (USCG) fisheries law 
enforcement, aids to navigation, and other important activities that 
help ensure the safe flow of commerce along U.S. waterways and the 
protection of natural resources. These reductions will impact USCG's 
ability to respond to issues impacting the U.S. Marine Transportation 
System that generates more than $3.2 trillion of total economic 
activity, moves 78 percent of foreign trade, and sustains more than 13 
million jobs each year. USCG also will have to reduce its patrols of 
the 3.4 million square mile U.S. Exclusive Economic Zone--impacting 
fisheries enforcement and resulting in more incursions by foreign 
vessels, exploiting our natural resources. Reduced USCG presence 
protecting the U.S. fishing industry would impact an industry which 
generates $32 billion in income and supports more than 1 million jobs 
annually.
    Reductions in the Department's preparedness and grants programs as 
well as the Science and Technology's (S&T) research and development 
(R&D) activities would affect first responders on the frontlines across 
the country. Vital assistance for State and local law enforcement 
efforts--such as training, technical assistance, security clearances, 
and connectivity to Federal systems and technologies--would all be 
scaled back under sequestration.
                   disaster preparedness and recovery
    DHS, through its Federal Emergency Management Agency (FEMA), works 
closely with States, cities, tribes, territories, and communities large 
and small to help prepare for and respond to disasters and emergencies 
of all kinds. We provide funding through homeland security grants, 
support training and exercises, assess State and local response 
capabilities and recommend needed improvements. We also support 
recovery and rebuilding efforts after a disaster.
    Cuts to FEMA would have significant, negative impacts on our 
Nation's disaster preparedness, response and recovery efforts.
    Weeks after the Congress passed the recent fiscal year 2013 
Disaster Assistance Supplemental Act (Public Law 113-2), sequestration 
would reduce the Disaster Relief Fund by more than $1 billion, 
affecting survivors recovering from Hurricane Sandy, the tornadoes in 
Tuscaloosa and Joplin, and other major disasters across the Nation, as 
well as the economic recoveries of local economies in those regions. 
Sequestration cuts could also require FEMA to implement Immediate Needs 
Funding Restrictions late in the fiscal year during what is 
historically the season for tornados, wild fires, and hurricanes, which 
would limit funding for new projects in older disasters.
    Finally, State and local homeland security grants funding would be 
reduced to its lowest level in the past 7 years, leading to potential 
layoffs of State and local emergency personnel across our country.
                            border security
    DHS's border security responsibilities are significant. Through CBP 
and USCG, we protect 4,000 miles of border with Canada; 2,000 miles of 
border with Mexico; and 2,600 miles of shoreline. USCG also ensures 
maritime security, protecting our Nation's seaports as well as 95,000 
miles of waterways.
    Facing more than $500 million in cuts, CBP would not be able to 
maintain current staffing levels of CBP agents and CBP officers as 
mandated by the Congress.
    Funding and staffing reductions from sequestration will increase 
wait times at airports, affect security between land ports of entry, 
limit CBP's ability to collect revenue owed to the Federal Government, 
and slow screening and entry programs for those traveling into the 
United States.
    Sequestration would force CBP to immediately begin furloughs of its 
employees, reduce overtime for frontline operations, and decrease its 
hiring to backfill positions. Specifically, beginning April 1, CBP 
would have to reduce its work hours by the equivalent of more than 
5,000 CBP agents and the equivalent of more than 2,750 CBP officers.
    Sequestration would also have significant impacts to USCG's ability 
to protect our maritime borders. USCG is the principal Federal agency 
responsible for maritime safety, security, and environmental 
stewardship in U.S. ports and inland waterways, along the coasts, and 
on the high seas. While USCG is one of our Nation's five armed 
services, it is also a law enforcement and regulatory agency with broad 
domestic responsibilities and legal authorities.
    To address reductions mandated by sequestration, USCG would have to 
curtail air and surface operations by more than 25 percent, adversely 
affecting maritime safety and security across nearly all mission areas. 
A reduction of this magnitude would reduce drug interdiction, migrant 
interdiction, port security, and other law enforcement operations. 
Furthermore, to achieve the level of reduction prescribed by 
sequestration, a significant level of ongoing maintenance and training 
would be deferred, with serious consequences for USCG's future force 
readiness and mission effectiveness.
      immigration enforcement and department of homeland security 
                             investigations
    DHS also has significant responsibilities with respect to 
immigration enforcement. U.S. Immigration and Customs Enforcement (ICE) 
serves as the principal investigative arm of the Department and is the 
second-largest investigative agency in the Federal Government.
    ICE promotes homeland security and public safety through broad 
criminal and civil enforcement of approximately 400 Federal laws 
governing border control, customs, trade, and immigration. ICE also 
identifies, apprehends, and removes criminal and other removable aliens 
from the United States. Last year, ICE removed more than 400,000 
illegal immigrants including 225,000 individuals who had been convicted 
of felonies or misdemeanors.
    Under sequestration, ICE would be forced to reduce current 
detention and removal operations, potentially affecting public safety, 
and would not be able to maintain 34,000 detention beds as mandated by 
the Congress.
    ICE Homeland Security Investigations (HSI) works in more than 200 
cities throughout the United States and 47 countries around the world 
to investigate and dismantle transnational criminal organizations 
involved in smuggling and other cross-border criminal activities. 
Sequestration would reduce HSI's activities, including human smuggling, 
counter-proliferation, and commercial trade fraud investigations. ICE 
would also be required to reduce or eliminate contracts for 
investigative support, including those for wiretaps under title III of 
the Omnibus Crime Control and Safe Streets Act.
                        transportation security
    Each year, transportation systems protected by TSA accommodate 
approximately 640 million aviation passengers; 751 million passengers 
traveling on buses; more than 9 billion passenger trips on mass 
transit; nearly 800,000 daily shipments of hazardous materials; more 
than 140,000 miles of railroad track; 3.8 million miles of roads; and 
nearly 2.5 million miles of pipeline.
    TSA is the Federal Government's lead agency for protecting our 
Nation's transportation systems from terrorist attacks while ensuring 
the freedom of movement for people and commerce. TSA manages effective 
and efficient screening and security of all air passengers, baggage, 
and cargo on passenger planes. It also deploys Federal Air Marshals 
internationally and domestically to detect, deter, and defeat hostile 
acts targeting air carriers, airports, passengers, crews, and other 
transportation infrastructure.
    Sequestration's mandated reductions would require TSA to furlough 
its frontline workforce and reduce its operations at our Nation's 
airports, substantially increasing passenger wait times at security 
checkpoints. TSA would need to initiate a hiring freeze for all TSO 
positions in March, eliminate overtime, and furlough its 50,000 
officers for up to 7 days.
                             cybersecurity
    DHS also safeguards our Nation's cyber systems and networks, 
working in close partnership with the private sector. DHS is the 
Federal Government's lead agency for securing civilian government 
computer systems, and through our National Protection and Programs 
Directorate (NPPD), we work with our industry and Federal, State, 
local, tribal, and territorial government partners to secure critical 
infrastructure and information systems.
    Reductions resulting from sequestration would require NPPD to scale 
back its development of critical capabilities for the defense of 
Federal cyber networks. Ongoing collaboration and information sharing 
between NPPD and its Federal, State, local, tribal, private sector, and 
international partners could also be limited.
    Full deployment of the National Cybersecurity Protection System 
(NCPS) intrusion prevention system, known as E3A, would be delayed. 
This delay would reduce our ability to detect, analyze, and build 
capabilities into NCPS to respond to emerging cyber threats. Deployment 
of a cyber diagnostics capability for the 118 Federal agencies would be 
affected, leaving departments and agencies less protected and delaying 
risk reduction features until at least fiscal year 2014. In addition, 
sequestration would disrupt long-term efforts to build a qualified 
cybersecurity workforce, leaving up to 20 percent of the positions at 
the DHS United States Computer Emergency Readiness Team vacant.
    U.S. Secret Service (USSS) agents conduct investigations responding 
to network intrusions and data breaches resulting in the theft of 
financial data and personally identifiable information on a daily 
basis. In fiscal year 2012, USSS prevented more than $1.9 billion in 
cyber crime fraud loss and identified more than $330 million in actual 
loss. Ongoing collaboration with law enforcement, the private sector 
and academia working to detect and suppress computer-based crime 
through its 31 domestic and international Electronic Crimes Task Forces 
would be severely weakened by furloughed staffing and reductions in 
funding.
       united states secret service investigations and protection
    USSS carries out a unique dual mission of protection and 
investigation through its 165 domestic and international offices. USSS 
protects the President, Vice President, visiting heads of State and 
Government, and National Special Security Events. It also safeguards 
the Nation's financial infrastructure and payment systems to preserve 
the integrity of the economy, investigates electronic crimes, 
investigates threats against U.S. and visiting world leaders, and 
protects the White House and other designated buildings within the 
Washington, DC area.
    In addition to counterfeiting, USSS is the lead law enforcement 
agency for investigating credit and debit card fraud as well as other 
types of bank fraud. In fiscal year 2012, USSS investigations prevented 
more than $2 billion in potential loss to financial institutions and 
citizens.
    Furloughs and reductions in overtime would adversely affect the 
USSS workforce, and hinder ongoing criminal and protective intelligence 
investigations. All USSS Special Agents and Uniformed Division Officers 
would be subject to furloughs of up to 7 days.
        department of homeland security research and development
    Sequestration would also have significant impacts on the S&T, an 
agency which helps to strengthen our Nation's security and resiliency 
by providing innovative technology solutions and knowledge products 
across the homeland security enterprise. S&T works closely with 
operators, scientists, and engineers to conduct research and 
development and provide critical homeland security solutions across our 
missions.
    Sequestration would force S&T to halt ongoing R&D efforts focused 
on countermeasures for bio-threats, improvements to aviation security 
and cyber security technologies, and projects that support first 
responders. Funding for the university network that provides essential 
R&D will face significant cuts, resulting in fewer new technologies 
available to meet current and emerging threats.
               department of homeland security enterprise
    Finally, under sequestration, DHS would be unable to move forward 
with important command and management infrastructure. DHS would have to 
scale back management integration efforts such as modernizing critical 
financial systems. This would hinder the Department's abilities to 
provide accurate and timely financial reporting, facilitate clean audit 
opinions, address systems security issues and remediate financial 
control and financial system weaknesses.
                               conclusion
    Hurricane Sandy, recent threats surrounding aviation and the 
continued threat of homegrown terrorism demonstrate how we must remain 
vigilant and prepared, as a Department and as a Nation. Threats from 
terrorism and response and recovery efforts associated with natural 
disasters will not diminish because of budget cuts to DHS.
    Even in this current fiscal climate, we do not have the luxury of 
making significant reductions to our capabilities without placing our 
Nation at risk. If we are to continue to prepare for, respond to, and 
recover from evolving threats and disasters, we will need sufficient 
resources to sustain and adapt our capabilities accordingly.
    In order to sustain frontline operations while planning for 
declining budgets, the Department has already taken more than $4 
billion in significant reductions and cost avoidances to administrative 
and mission support functions over the past several years. Further 
reductions mandated by sequestration will directly impact the 
Department's frontline operations.
    While we will continue to preserve our frontline priorities as best 
we can, no amount of planning can mitigate the negative effects of 
sequestration. DHS simply cannot absorb the additional reduction posed 
by sequestration without significantly and negatively affecting 
frontline operations and our Nation's previous investments in homeland 
security.
    Thank you for inviting me to appear before you today. The 
Department appreciates the strong support it has received from the 
Congress over the past 10 years. As we approach March 1, I urge the 
Congress to act to prevent sequestration and ensure the safety, 
security, and resiliency of our Nation.
    I would be pleased to answer any questions you may have.

    Chairwoman Mikulski. Dr. Carter.
STATEMENT OF HON. ASHTON B. CARTER, DEPUTY SECRETARY, 
            DEPARTMENT OF DEFENSE
    Dr. Carter. Thank you, Chairwoman Mikulski, very much, and 
Ranking Member and Vice Chairman Shelby. I thank you both, and 
this entire committee, very much from the bottom of my heart 
for having this hearing, and I will tell you why.
    We have been very concerned now, Secretary Panetta and I 
and the entire DOD leadership, about what we have called the 
devastating effects of the sequester on our Nation's defense 
and everything we do. We have been talking about this for 16 
months now, and now the wolf is at the door.

                           NATIONAL SECURITY

    I would like to describe to you some of the specific 
consequences of the sequester for national security. I should 
say, right at the beginning, that we have another contingency 
that is affecting us. It is not affecting my colleagues at the 
moment, which is the continuing resolution and the prospect 
that it would remain in force through the end of the year, for 
reasons I will explain shortly, that has a particularly near-
term, deleterious effect on the Department.
    So for us, there are two things that come together. The 
first one is the sequester, which is scheduled to kick in just 
a couple of weeks' time, and, for us, that requires us to 
remove $46 billion from our spending in the last 7 months of 
the fiscal year and moreover, as you all know, to do it in the 
dumbest possible way, from a management standpoint, which is 
account by account, item by item.
    The continuing resolution poses a different kind of problem 
for us. We have enough money in the continuing resolution. The 
problem is that it is in the wrong accounts, and, in 
particular, the operations and maintenance part is very much 
short, and that creates problems I shall describe shortly in 
the remaining months of the fiscal year.
    So these two things come together to create what we have 
been calling, and what the Joint Chiefs of Staff have called, 
``a crisis in readiness'' in the near term.
    In the far term, over the next 10 years, if the budgetary 
caps triggered at the same time--the sequester is triggered for 
fiscal year 2013--are sustained, we are not going to be able to 
carry out the defense strategy, the new defense strategy, that 
we crafted under President Obama's leadership just 1 year ago.
    It is not that we don't understand that DOD needs to make a 
contribution to the Nation's fiscal situation and its 
resolution. That is why we have accommodated $487 billion in 
cuts over the next 10 years. We are just beginning to make that 
enormous transition. That was on top of several hundred billion 
dollars worth of cuts that Secretary Gates began, eliminating 
unneeded and underperforming programs. And all of this is on 
top of the historic reduction associated with the winding down 
of the wars in Iraq and Afghanistan.
    I also understand that the taxpayer deserves very careful 
use of each and every DOD dollar that we do get from you. And 
that is why we have striven, and will continue to strive, to 
get better buying power for the DOD dollar and reform the 
acquisition system.
    But both a strategic approach to defense spending and 
efficient use of the taxpayer dollar are undermined by 
sequestration. And what is particularly tragic is that 
sequestration is not the result of an economic recession or an 
emergency. It is not because discretionary spending cuts are 
the answer to our Nation's fiscal challenge. You do the math. 
It is not in reaction to a more peaceful world. It is not due 
to a breakthrough in military technology or to a new strategic 
insight. It is not because paths of entitlement growth and 
spending have been explored and exhausted. It is not because 
sequestration was ever a plan intended to be implemented.
    All this is purely the collateral damage of political 
gridlock. For our troops, for the force, the consequences are 
very real and very personal. The President has indicated his 
intention to spare military compensation from sequestration. 
And that is a very good decision and one that we intend to 
carry out.
    But make no mistake, the troops are going to feel this very 
directly in other ways. And I will just give you, I think, the 
principal example. There are many.
    Between now and the end of the year, we will need to 
sharply curtail training in all of the services. And so that 
means, for example, a brigade combat team that has returned 
from Afghanistan that is used to being at tiptop readiness--and 
that is what matters to this profession, and that is what we 
want to have matter to them--can't train. And the Army reports 
that two-thirds of its brigade combat teams will be at reduced 
readiness by year's end. And I can go through the same thing, 
true in the Air Force and so forth. So it is going to have a 
big effect on our uniformed people.

                DEPARTMENT OF DEFENSE CIVILIAN WORKFORCE

    Likewise, also, for our much maligned civilians, you know, 
a lot of people think that DOD civilians are people who wake up 
in the Washington suburbs and get in a car and drive up I-395 
and come to an office building here. They are not. Most of them 
work in depots. They fix airplanes. They maintain ships and 
overhaul ships. Eighty-six percent of them don't even live in 
the Washington area. Forty-four percent of them are veterans. 
And on or around April 1, we will need to begin to furlough 
many of them, and to do that, for up to 22 days, which is the 
statutory limitation.
    And I have promised that when that happens, I am going to 
give back one-fifth of my paycheck to the Treasury for those 
last 7 months, if we have to furlough people. I can't be 
furloughed, because I am a Senate-confirmed Presidential 
appointee, but I am going to give back one-fifth of my salary.
    There is a real human impact here, is what I am saying.
    And in addition to the military and civilian personnel, the 
effects will be devastating on the defense industry, upon which 
we depend. The quality of our defense industry, second only to 
the quality of our people in uniform, is what makes our 
military the greatest in the world. And a technologically 
vibrant and financially successful defense industry is in the 
national interest.
    The act of sequestration and the longer-term budget cuts, 
and even the prolongation of uncertainty, will limit capital 
market confidence in our industry, and companies may be less 
willing to make internal investments in their defense 
portfolios.
    The turmoil is even greater for our subcontractors. Many of 
them lack the capital structure to withstand this kind of 
turbulence. And I will just remind you that 60 to 70 cents of 
every $1 we contract goes not to the prime contractor, but is 
in turn subcontracted out. Many of these are small businesses. 
We count on them for the vibrancy and new people, new talent, 
fresh blood in the defense sector.
    And above all, the sequester will cause a spike in program 
inefficiency by stretching out programs and driving up unit 
costs. So for the force--military, civilian, our industry--the 
consequences are very direct and devastating.
    I would like to close with an appeal, which is to de-
trigger sequestration and also, very importantly to us, to pass 
appropriations bills not only for defense, but for all our 
Federal agencies for that matter.
    And in that connection, I would just like to add that, in 
the long run, national security rests on a strong economy. It 
rests on a strong industrial and engineering base. It rests on 
having science, technology, engineering, and math talent here 
in America.
    These are, I recognize, provided in other parts of the 
budget, but, indirectly, we depend upon them as well. And 
understanding the effect of sequestration for us managing in 
DOD, I understand the comparable problems that are arising for 
my colleagues around the table.
    The cloud of uncertainty hanging over our Nation's defense 
affairs is already having lasting and irreversible effects. 
Ultimately, the cloud of sequestration needs to be dispelled 
and not just moved to the horizon. The magnificent men and 
women of DOD and their families deserve no less. They need to 
know that we are going to keep our commitments to them. Our 
partners in the defense industry and their employees need to 
know we are going to have the resources to procure the world-
class capabilities they provide.
    And perhaps most important, the world is watching us. The 
world is watching----
    Chairwoman Mikulski. Secretary Carter, we have----

                           PREPARED STATEMENT

    Dr. Carter. I am almost done.
    Our friends and our enemies are watching us, Madam 
Chairwoman, and they need to know that we have the political 
will to forestall sequestration.
    Thank you.
    [The statement follows:]
                 Prepared Statement of Ashton B. Carter
    Madam Chairwoman, Senator Cochran, Members of the Committee, thank 
you for holding this hearing on the effects of sequestration. I am not 
only pleased, but in fact eager, to testify before you. For over a 
year, Secretary Panetta and I, together with the uniformed leadership 
of this Department, have been warning of the devastating effects for 
national defense that will result from sequestration.
    Last August, I testified in detail to the impacts of sequestration 
that are specific to the Department of Defense, which include all the 
matters we will be discussing today in more detail, including 
furloughs, degraded readiness, maintenance cutbacks, and disrupted 
investment programs. I explained that these devastating effects would 
result from the size--and, for fiscal year 2013, the arbitrary nature--
of the budget cuts that would be required under sequestration and the 
reductions in the discretionary caps mandated by the Budget Control Act 
of 2011 (BCA).
    The consequences of sequestration and a lowering of the 
discretionary caps are serious and far-reaching. In the near-term, 
these reductions would create an immediate crisis in military 
readiness, especially if coupled with an extension of the continuing 
resolution under which we currently operate. In the long-term, failure 
to replace these large and arbitrary budget cuts with sensible and 
balanced deficit reduction would require this nation to change its 
defense strategy.
    I have long understood that the Department of Defense must 
contribute to the resolution of the Nation's fiscal situation. That is 
why we already accommodated $487 billion in budget reductions versus 
the fiscal year 2012 President's budget, and managed to do so in a 
manner consistent with our new defense strategy for the new era that 
America is entering. This $487 billion reduction, now even larger, was 
on top of budget reductions that began under Secretary Gates, when we 
cancelled many unneeded and poorly performing defense programs.
    I also understand that the taxpayer deserves careful use of every 
dollar we are given. That is why we have striven and must continue to 
strive to get better buying power for the defense dollar.
    Both of these efforts will be severely undermined unless the budget 
uncertainty and cloud of sequestration that hangs over this Department, 
its uniformed and civilian employees, and the industry that supports 
us, is lifted.
    What is particularly tragic is that sequestration is not a result 
of an economic emergency or a recession. It's not because discretionary 
spending cuts are the answer to our Nation's fiscal challenge; do the 
math. It's not in reaction to a change to a more peaceful world. It's 
not due to a breakthrough in military technology or a new strategic 
insight. It's not because paths of revenue growth and entitlement 
spending have been explored and exhausted. It's purely the collateral 
damage of political gridlock.
    We have long argued that the responsible way to implement 
reductions in defense spending is to formulate a strategy first and 
then develop a budget that supports the strategy. If the Department 
were forced to operate under the mechanistic sequestration rules and 
the continuing resolution for the remainder of the fiscal year, it 
would achieve precisely the opposite effect by imposing arbitrary 
budget cuts that then drive changes in national security strategy.
    This is why I continue to urge Congress, in the strongest possible 
terms, to avoid sequestration by devising a comprehensive and balanced 
deficit reduction package that both the House and Senate can pass and 
that the President can sign. I also strongly urge the Congress to pass 
fiscal year 2013 appropriation bills for all Federal agencies, 
including the Department of Defense.
                      how sequestration would work
    The American Taxpayer Relief Act of 2012 changed the dates and size 
of sequestration. The sequestration will now begin for the Department 
in about 2 weeks, on March 1, 2013; in addition, a second sequestration 
due to a breach in the discretionary spending caps for fiscal year 2013 
is scheduled to be implemented on March 27. Simply put, the combined 
effects of these two sequestrations will require the Department to cut 
roughly $46 billion from the annualized level of funding provided on 
the fiscal year 2013 continuing resolution, all in the last 7 months of 
the fiscal year.
    Sequestration cuts would apply to all of the DOD budget, including 
the wartime or Overseas Contingency Operations (OCO) portions, with 
only one significant exception. Exercising his statutory authority, the 
President indicated his intent to exempt all military personnel funding 
from sequestration. While I support the President's decision to protect 
our military personnel from sequestration, as a result, other DOD 
budget accounts must be cut by larger amounts to offset this exemption. 
We estimate that all other accounts would be reduced by roughly 8 
percent by the March 1 sequestration order, and by a total of about 9 
percent if both March 1 and March 27 sequestration orders occur. (The 
Office of Management and Budget would eventually calculate the precise 
the sequester percentage and provide it in the sequestration order.)
    In addition to requiring a large and sudden reduction in defense 
spending for fiscal year 2013, the law requires that those reductions 
be accomplished in a rigid, across-the-board manner--account by 
account, and item by item. Cuts to the operating portions of the DOD 
budget must be equal in percentage terms at the level of appropriations 
accounts. (Examples of appropriations accounts in the operating budget 
include Army active operation and maintenance, Navy Reserve operation 
and maintenance, and Air Force Guard operation and maintenance.) For 
the investment portions of the budget, the dollar cuts must be 
allocated proportionally at a line item level of detail. More than 
2,500 programs or projects are separately identified as line items and 
would be reduced by the same percentage. Within each operating account 
or investment line item, managers could decide how best to allocate the 
reductions.
    The continuing resolution also plays a deleterious role in shaping 
the fiscal year 2013 budgetary landscape. The continuing resolution 
provides funding for OCO at the level requested in the President's 
budget for fiscal year 2013. However, the current continuing resolution 
directs that the base budget remain at the level enacted for fiscal 
year 2012. That provides sufficient total base budget dollars to DOD, 
but the dollars are in the wrong appropriations. Compared to our needs 
for fiscal year 2013, the continuing resolution provides too much 
funding in most investment accounts and insufficient funding in the 
Operation and Maintenance (O&M) accounts that sustain day-to-day 
operations and military readiness.
                        what sequestration means
    If sequestration is triggered, we will be required to make cuts of 
$46 billion from virtually every category of the budget, except for 
military personnel. Moreover, these cuts must be accommodated in the 
last 7 months of fiscal year 2013. The impact of these cuts will be 
compounded by the misallocation of funding under the continuing 
resolution.
    The combined effects of sequestration and the continuing resolution 
will be especially problematic for the Operation and Maintenance 
accounts, which most affect military readiness. So allow me to focus on 
O&M, and in particular on the O&M in the base budget for active forces, 
since this portion will be heavily impacted. As part of the overall cut 
of the $46 billion cut caused by the two sequestrations, these O&M 
accounts will be reduced by $13 billion from the annualized continuing 
resolution level. We must obviously protect the O&M dollars for our men 
and women in combat, which under sequestration rules we can only do by 
cutting base-budget O&M disproportionately--this results in an 
additional shortfall of $5 billion in active base-budget dollars.
    Then the continuing resolution comes into play. If it is extended 
in its current form throughout the year, it exacerbates problems 
because it does not provide enough dollars in O&M--adding an additional 
shortfall of $11 billion.
    Next, we are anticipating higher-than-expected wartime operating 
costs due to factors such as unexpectedly high operating tempo, 
increased transportation costs associated with difficulties experienced 
with Pakistan grounds lines of communication, and an expanded Persian 
Gulf presence to deal with contingencies in the region. This will add 
another $5 billion to $6 billion to the shortfall in active O&M 
dollars.
    The cumulative effect of adding all these factors is a DOD-wide 
shortfall of about $35 billion compared to our fiscal year 2013 budget 
request (about 23 percent of that request) just in base-budget O&M 
dollars for Active forces. Some Services will experience base-budget 
O&M reductions much larger than 23 percent. The Army, for example, has 
a greater share of wartime operating dollars to protect and is also 
experiencing higher-than-expected use of wartime operating funds.
    Greatly adding to our concern is that we would have only about 7 
months to accommodate these formidable shortfalls. The result in the 
near-term will be a readiness crisis.
 near-term actions in response to the possibility of march 1 sequester 
                  and year-long continuing resolution
    Because the prospect of these developments is now all too real, and 
because the time in the fiscal year to absorb them is slipping away, on 
January 10 I authorized all Defense Components to begin taking 
immediate actions to slow spending in order to prevent even more dire 
consequences later in the year. I directed each of the Defense 
Component heads to report back to me by February 1 with a list of 
proposed actions and an implementation plan. I subjected the plans to 
three ground rules: first, protect wartime operations, urgent 
operational procurement needs, and wounded warrior programs; second, 
protect, whenever possible, key features of the new defense strategy 
and acquisition efficiencies; and third, ensure, to the extent 
feasible, that these near-term actions are reversible if action is 
taken to formulate a balanced deficit reduction deal that averts these 
developments.
    Let me provide you some examples of the steps that are now being 
taken:
  --Most services and defense agencies will institute civilian hiring 
        freezes, with exceptions for mission-critical activities. DOD 
        hires between 1,500 and 2,000 people per week. It is important 
        to note that this freeze will disproportionately affect 
        veterans, who make up 44 percent of the DOD civilian workforce. 
        Hiring freezes will also be felt across the Nation, since 86 
        percent of DOD's civilian jobs fall outside the Washington, DC 
        metro area.
  --Most services and defense agencies will begin laying off a 
        significant portion of our 46,000 temporary and term employees, 
        again with exceptions for mission-critical activities.
  --Most services and defense agencies will curtail facilities 
        maintenance. More than $10 billion in funding--mostly to 
        contractors and small businesses--would be affected, 
        translating into lost jobs in the private sector. The Air 
        Force, for example, plans to cut facilities maintenance 
        projects by about half, including cuts to 189 projects at 55 
        installations in 26 States.
  --As of March 1, services will begin cancelling ship and aircraft 
        maintenance work for the third and fourth quarters. It is 
        estimated that about 25 ships and 470 aircraft will be affected 
        unless we can reverse these actions.
  --The Army and other services are curtailing training not directly 
        related to missions.
  --The Army has directed a reduction of 30 percent in base operating 
        services relative to fiscal year 2012 levels and other services 
        are also limiting base support.
additional actions that will need to be taken should sequestration and 
                a year-long continuing resolution occur
    We are taking these steps now reluctantly, since they are obviously 
harmful, because we can no longer be confident that the March 
sequestrations and a year-long continuing resolution will be avoided, 
and by acting now we can make the damage in later parts of the year 
somewhat less severe. While these near-term actions will cushion the 
blow in later months, they are not nearly enough to accommodate a year-
long continuing resolution or sequestration. If these unfortunate 
developments actually come to pass, in March we will have to take more 
drastic and irreversible actions. Accordingly, I also directed all 
Defense Services and Agencies to provide me by February 8 with a list 
of actions that they would take in the event that either budget 
contingency occurs. We are still formulating these plans, which are 
complex and require input from thousands of activities. We do not yet 
have complete information, but I can provide examples of the actions 
that the Defense Components have proposed to meet budgetary targets in 
fiscal year 2013:
  --All the Services and Agencies are likely to have to furlough most 
        DOD civilian employees for an average of 1 day per week for up 
        to 22 weeks. This action will seriously harm our ability to do 
        important work, which will, in turn, harm national security: 
        civilians fix our ships and tanks and planes, staff our 
        hospitals, handle contracting and financial management, and 
        much more. During this period, furloughs will result in a 20 
        percent cut in pay for civilians who support our national 
        defense--which will affect their morale. Senate-confirmed 
        political appointees like me cannot be furloughed under the 
        law. But if our employees are furloughed, I intend to give back 
        to the Treasury the same portion of my salary, and I encourage 
        all of us--executive branch and legislative branch--to do the 
        same. In addition, these furloughs, like other spending cuts, 
        will adversely affect economies in the communities where our 
        civilians live and work. Savings from furloughs will be 
        critical to meeting budgetary cuts by the end of the year. 
        However, it is important to note that even if all 800,000 
        civilian DOD employees are furloughed to the maximum extent 
        permitted by law, the savings of $4 billion to $5 billion will 
        still leave us $41 billion short of our $46 billion total 
        target. Thus, much more cutting of DOD spending will result, 
        affecting many defense workers who are not direct DOD 
        employees.
  --The Army will curtail training and reduce maintenance for units 
        that are not scheduled to deploy to Afghanistan. This could put 
        readiness for future contingency operations elsewhere at risk. 
        By year end, about two-thirds of Active and most Reserve 
        Brigade Combat Teams (excluding those in Operation Enduring 
        Freedom) will be at reduced readiness levels. As part of 
        accommodating the sequester cuts, the Army may have to cancel 
        up to five full-spectrum training rotations at its premier 
        training centers.
  --The Air Force will be forced to cut flying hours sharply and will 
        reduce remaining weapon system sustainment funding by about 30 
        percent. Current planning suggests that most flying units 
        (especially later-deploying units) will be below acceptable 
        readiness standards by the end of fiscal year 2013. As a 
        result, the Air Force will be substantially less able to 
        respond on short notice to contingencies, which is one of their 
        key missions.
  --The Navy and Marine Corps will be forced to cut back on readiness 
        and fleet operations. That could include a reduction of one-
        third in operations of Navy ships and aircraft in the Asia-
        Pacific region and gaps in availability of Marine Amphibious 
        Ready Groups.
  --DOD would be short between $2 billion and $3 billion in funds 
        needed to pay for costs in the Defense Health Program. If we 
        protect the operations of our in military treatment facilities, 
        in order to maintain health readiness for Active-duty forces, 
        then it is possible that DOD might not have enough funds to pay 
        TRICARE bills toward the end of the fiscal year.
  --DOD will have to make cuts of roughly 9 percent in each of more 
        than 2,500 investment line items. These cuts will disrupt 
        programs, add to unit costs, and damage the defense industry.
    Overall, these actions will seriously disrupt programs and sharply 
degrade readiness. The acute effects on O&M and readiness are of 
particular concern to the Secretary and me and the Department's senior 
military leaders. The Chairman of the Joint Chiefs of Staff, the Vice 
Chairman, and all the Joint Chiefs recently signed a ``28 star letter'' 
stating: ``The readiness of our Armed Forces is at a tipping point. We 
are on the brink of creating a hollow force.''
 longer-term effects of sequestration and reductions in discretionary 
                                  caps
    So far I have focused on the effects of sequestration and the 
continuing resolution in fiscal year 2013. But current law also reduces 
the budgetary limits for defense spending by about $50 to $55 billion 
in each year from fiscal year 2014 through fiscal year 2021. These 
lower caps would constitute a second long-term budget cut as large as 
the one DOD has already carried out. Cuts of this magnitude will 
require that we substantially modify and scale back the new defense 
strategy that the DOD leadership, working under the guidance of the 
President, so carefully developed just a little more than 1 year ago.
    Last year, we emphasized that we were at a strategic turning 
point--a transition from the era of Iraq and Afghanistan to the 
security challenges that will define our future.
    The new strategy has five pillars:
    First, we said that our force has got be leaner, but also agile, 
ready, and technologically advanced. In other words, we wanted to 
absorb the lessons we learned over the last decade of war--the lessons 
of counterinsurgency, IEDs, rotational presence, intelligence and 
operational integration, adaptability--and apply them to the challenges 
of the future to create a new post-Iraq and Afghanistan concept of 
readiness for each of our services.
    Second, we said that we would continue our focus on the Middle 
East, which will remain an enduring commitment of the United States, 
but also execute our so-called rebalance to the Asia-Pacific region, 
where so much of our future security and economic interests lie.
    Third, we said we would strengthen our global alliances and 
partnerships to achieve shared objectives and to build the capacity of 
our security partners.
    Fourth, we said we would ensure that the United States military 
remains capable of confronting aggression and defeating any opponent, 
anywhere, anytime.
    Fifth, we said we would continue to invest, even in hard budgetary 
times, in future-focused capabilities and technologies, like cyber and 
space, as well as special operations.
    If the budget cuts described were sustained for the full 9 years, 
we would need to make substantial changes to our strategy that will 
directly diminish our military strength. Large reductions in force 
structure would almost certainly be necessary. These force structure 
changes would not happen instantly; in order to meet the new budget 
levels, we would almost certainly be forced to gut our acquisition 
programs in the near-term. This would cancel or significantly delay 
most of our major modernization programs until after the force 
reductions are achieved years from now. On top of this, we would have 
little choice but to reduce military compensation and reduce civilian 
personnel costs.
    The resultant force would not be able to rapidly respond to major 
crises in the world or to be globally positioned to deter our 
adversaries. To protect the most warfighting capability possible, this 
Department would need relief from constraints on how the Department 
manages non-warfighting costs, including such authorities as BRAC.
    Just as sequestration and the reductions in the discretionary caps 
will have devastating effects on the Nation's defense force, it will 
also be harmful to the defense industry upon which we depend. The 
quality of the weapons systems produced by our defense industry is 
second only to the quality of our people in uniform in making our 
military the greatest in the world. As such, a technologically vibrant 
and financially successful defense industry is in the national 
interest. The act of sequestration and longer-term budget cuts, and 
even the prolongation of uncertainty, will limit capital market 
confidence in the defense industry, and companies may be less willing 
to make internal investments in their defense portfolio. The impact 
will be even greater on our subcontractors, who lack the capital 
structure to withstand turmoil and uncertainty. Of note, 60 to 70 
percent of our defense dollars are subcontracted, and many of our 
subcontractors are small businesses. Above all, the sequester will 
cause a spike in program inefficiency by stretching out programs and 
driving up unit costs.
    Already, we saw the threat of sequestration drag on GDP growth in 
the fourth quarter of 2012, and consumer confidence took a hit over 2 
months through January. According to private sector and CBO forecasts, 
sequestration impacts could reduce GDP growth in 2013 by over half a 
percentage point. That lost growth would deprive American workers of 
hundreds of thousands of jobs.
    In the long run, national security rests on a strong economy, and 
also on non-defense functions--like education, especially science, 
technology, engineering, and math (STEM)--provided in other parts of 
the Federal budget. The drastic nature of sequestration would obviously 
be harmful to these functions, as the other witnesses appearing today 
will describe in greater detail.
    Finally, we must be mindful that the world watches--our friends and 
enemies watch--and continued turmoil and uncertainty take a toll on our 
international reputation for excellence and resolve in national 
security affairs.
                     sequestration must be avoided
    My testimony today makes clear that sequestration, especially if 
accompanied by a year-long continuing resolution, would be devastating 
to DOD--just as it would to every other affected Federal agency. The 
difference is that, today, these devastating events are no longer 
distant problems. The wolf is at the door.
    If we end up with an extended continuing resolution, we will need 
help from Congress in modifying the continuing resolution to get the 
dollars in the correct appropriations. We will also need Congress to 
support our efforts to use the reprogramming process to shift money so 
as to meet our highest priorities.
    But additional flexibility at this late date would do little to 
offset the devastating effects of sequestration since cuts of this 
abruptness and magnitude cannot be absorbed without significant and 
damaging cuts in nearly every budget category. Congress needs to deal 
quickly and broadly with our country's deficit problems in a balanced 
way that the President can support. Then Congress needs to de-trigger 
sequestration and pass appropriations bills for all Federal agencies. 
Given that there is not enough time to accomplish these far-reaching 
actions before sequestration is triggered on March 1, I would urge that 
Congress at least delay sequestration. But as I have emphasized, the 
cloud of uncertainty hanging over the Nation's affairs is already 
having lasting and irreversible effects. Ultimately, the cloud of 
sequestration needs to be dispelled, not just moved to the horizon.
    However it is done, we need relief from the twin evils of 
sequestration and a year-long continuing resolution. The magnificent 
men and women of this Department, and their families, deserve no less. 
They need to know with certainty that we will meet our commitments to 
them. Our partners in the defense industry, and their employees, need 
to know that we are going to have the resources to procure the world-
class capabilities they can provide, and that we can do so efficiently. 
And perhaps most important, allies, partners, friends, and potential 
foes the world over need to know that we have the political will to 
implement the defense strategy we have put forward.
    Again, I want to thank the committee for providing us an 
opportunity to highlight our grave concerns. I welcome your questions.


    Chairwoman Mikulski. Thank you.
    To our panel, thank you very much for this really 
compelling and at some points even riveting testimony of the 
consequences of this policy.
    As you can see, we have had an extraordinary turnout among 
members. We also have to recess by 1 o'clock. So we are going 
to follow the 5-minute rule, which I will impose on myself as 
well as on the members. And we would ask the panelists to give 
crisp answers so we can get in as much content as we can.
    The reason we need to have a targeted time is there is a 
Democratic caucus exactly on our proposal to vitiate the 
sequester. I know the other party is also pondering this.
    So we are going to get right on with it. We are going to 
recognize people in the order of arrival, and we look forward 
to these questions.

                     SEQUESTER IMPACT ON EDUCATION

    Secretary Duncan, I am going to go right to you. I have 
heard Secretary Condoleezza Rice, truly an iconic figure in 
American society, speak not only on national security, but she 
says repeatedly that education is the civil rights issue of 
this generation. Education reform began under President Bush 
the elder, President George W., and President Obama.
    Could you tell me the impact of the sequester on our 
bipartisan, multiyear commitment to educational reform to lift 
all boats and get our kids ready for the future? Is this going 
to derail it, dilute it, or just blow it out the window?

                         DISADVANTAGED CHILDREN

    Secretary Duncan. This would have a devastating impact. And 
again, the fact that it is so preventable, not that this is 
easy, but we know we can do better, makes this absolutely 
untenable.
    And as I have said repeatedly, and as Secretary Condoleezza 
Rice and others have said, if we are trying to level the 
playing field, if we are trying to help poor children, 
disadvantaged children enter the middle class, the only way to 
do that is to give them a high-quality education.
    This is the civil rights issue of our generation. It is an 
economic imperative. It is also an issue of national security. 
If you take any one of those by itself, that is a pretty big 
deal. You put those things together----

            IMPACT ON TITLE I AND CHILDREN WITH DISABILITIES

    Chairwoman Mikulski. What is the impact?
    Secretary Duncan. The impact on just one piece of this, 
title I dollars, which go to help poor children, help the 
children with the greatest need, again trying to break cycles 
of poverty and social failure, as many as 1.2 million students 
would be impacted, 2,700 schools.
    And if we fail to educate these children, what are they 
going to do? What is the option?
    For children with disabilities, where there is a tremendous 
need, we have done a lot to try and level the playing field, 
but, there is a long way to go. It would have a huge impact 
there as well.
    That is just simply, again, unacceptable to me.
    Chairwoman Mikulski. Thank you.
    We also understand that housing--everyone in my business 
community says housing is one of the sectors to lead us out of 
the recession. They feel that the economy is poised for 
recovery, but fragile and vulnerable.
    Secretary Donovan, you are the housing guy, along with the 
Secretary of the Treasury, which is financing. Tell me what you 
think the impact of the sequester will be, essentially, on 
housing new starts, rehab, modernization, jobs, the supply 
chain from the lumberyard all the way up to big, big 
construction projects?

                     FEDERAL HOUSING ADMINISTRATION

    Secretary Donovan. Senator, you really put your finger on 
it. As the President said in the State of the Union Address, 
housing has become one of the leading factors that is driving 
our recovery. And because of the critical role that the 
Congress created for FHA, we are absolutely central to that 
recovery at this point. Almost one-half of all first-time 
homebuyers in this country today use an FHA loan to buy their 
first home.
    And let me just take one small example. One of the most 
important factors in our early recovery, particularly in the 
construction industry, has been multifamily construction. It 
has jumped dramatically. We drive about 25 percent of all that 
new multifamily construction. And even just to take a very 
small number of employees out by furlough or a lack of hiring, 
a hiring freeze, we believe just this year that there would be 
about $3 billion in financing for a particular kind of 
multifamily construction that would not happen, with all the 
ripple-effects of jobs.
    And that is just one small example. When you multiply that 
to look at, as I said, almost one-half of first-time 
homebuyers, 25 percent construction----
    Chairwoman Mikulski. Well, isn't the ripple effect in like 
the lumberyard, the brickyard, the pipe----
    Secretary Donovan. It goes from the bricklayer or the 
plumber or the carpenter on the frontline. It goes to the 
window manufacturer. It goes to all of the ripple effects 
through our system that would be halted by that.

                          UNLIMITED AUTHORITY

    Chairwoman Mikulski. Secretary Carter, you outlined very 
compellingly what the sequester will be, and I know the other 
panelists will too. But I want to ask a question: ``What is 
going to minimize the impact on defense?'' And there are those 
that would like to give you unlimited authority to revise the 
defense budget without any recourse of coming to the Congress, 
somehow or another, to soften the blow.
    What is your position and what is the administration's 
position in giving you unlimited defense proposal authority 
without any reprogramming authority? Or do you need something 
more definite, more reliable, and more sustainable?
    Dr. Carter. That would take, my understanding, legislation. 
And I hope if there is legislation in the area affecting 
defense, it is one that dispels this problem once and for all.
    The other thing I will say is that, at this point in the 
fiscal year, with cuts of this magnitude, we have got to go 
where the money is. So we don't have a lot of choice in the 
first place.
    Chairwoman Mikulski. Do you want unlimited authority 
without congressional approval?

                             REPROGRAMMING

    Dr. Carter. We would like some reprogramming authority. 
That would obviously help us toward the end of the year.
    Chairwoman Mikulski. Senator Inhofe has a proposal, and it 
is a bona fide one--we acknowledge that it will be out there 
and debated; I oppose it--which would give up congressional 
authority. I want us to have a real solution to the sequester 
to either vitiate it or to have a proposal go through the 
continuing resolution or something where every agency could 
reprogram and so on but could do it for the year.
    Right now, what they are talking about is just giving 
Defense, where you all can decide how to do it, but exempt 
everybody else.
    Dr. Carter. As I said, at this point in the fiscal year, it 
doesn't help us that much. And if the price of that is just 
kicking this can further down the road and having us continue 
to live under this uncertainty, that is not a very attractive 
prospect to me.
    Chairwoman Mikulski. My time is up.
    I know you will comment on that, Mr. Werfel.
    Senator Shelby.
    Senator Shelby. Thank you.
    Chairwoman Mikulski. And after Senator Shelby, we go to 
Harkin, Collins, Murray, and Coats.
    Senator Shelby. Thank you, Madam Chairman.
    I think it is obvious that we need to return to regular 
order in the appropriations process. The chairwoman talked 
about it. I have talked about it. You have alluded to it.

               RETURN TO REGULAR ORDER OF BUDGET PROCESS

    Do all of you agree that, in order to provide certainty, 
which we need for agency budgets, one of the issues here, do 
all of you support a return to the regular order of the budget 
and appropriation measures?
    Mr. Werfel. Yes.
    Secretary Napolitano. Yes.
    Secretary Duncan. Absolutely.
    Senator Shelby. That is what I thought.
    now, supporting it and doing it are two different things.
    Chairwoman Mikulski. This is why we have gathered here.
    Senator Shelby. That is right.
    In the interest of reestablishing regular order and in the 
likely event that the sequester moves forward, would all of you 
consider transmitting budget amendments for fiscal year 2013 
that would give you the flexibility to realign agency funding 
under new constraints? Assuming the sequester, I think it is a 
good assumption, goes into effect?
    Mr. Werfel. Thank you, Senator, for that question. I will 
get the responses started.

                            FLEXIBLE FUNDING

    The administration would oppose a solution that kept the 
sequester in place and tried to reconstruct it in such a way 
that would try to dull some of the pain. We simply cannot cut 
$85 billion out of our budget over the next 7 months without 
creating significant problems and consequences across both 
defense and nondefense.
    And I think a critical point here is, when the sequester 
was put in place--and it was passed by bipartisan majorities in 
both the House and the Senate--there was not only agreement 
that it should drive a compromise and a solution to balanced 
deficit reduction, I think everyone agreed that it was going to 
be enormously harmful. And one of the ways it was going to be 
enormously harmful, it was going to carry on the backs of 
certain populations this burden of deficit reduction, the 
middle class, the vulnerable.
    And so the notion that we can live within an $85 billion 
cut by moving money around does not change the fact that we 
would still be in a world where who is bearing the burden of 
deficit reduction, it would be the middle class, the 
vulnerable. And all of the critical priorities that these 
secretaries talked about, it will not be possible to save all 
of them. We will see very, very harmful consequences with that.

       FLEXIBILITY IN DISTRIBUTING SEQUESTER CUTS NOT A SOLUTION

    Secretary Duncan. If I could just add quickly, I think it 
is a great summary, but the idea of flexibility, you know, it 
sounds nice as a manager, but the choices here are just 
devastating.
    So the choice would be do we save title I and take more 
money away from children with disabilities? Do we cut more from 
homeless children to do more for English language learners? Do 
we cut Impact Aid to do more for STEM programs?
    None of these are good choices. We have to invest.
    And so the idea that somehow we can kick the can down the 
road and just try a little more flexibility leaves us in a 
situation in which just, again, many, many hundreds of 
thousands of young people will be hurt.
    Secretary Donovan. One other point I would add to that, to 
echo something Deputy Secretary Carter said, we are so late in 
the fiscal year, recognize we are halfway through the year. 
Just take one example of a HUD program where we help a homeless 
veteran get off the street. We don't do that directly. We 
provide funding to local partners who figure out what are the 
needs of that veteran, help them locate a place to live.
    And this late in the year to say, we are going to cut 
substantially from that program, means that you literally--you 
don't have flexibility. You have to cut off existing funding 
for existing units in order to be able to achieve these cuts in 
such a short time.
    And no amount of flexibility would allow us, with this kind 
of both deep cuts but also precipitous cuts, to be able to do 
this in a way that would mitigate the great damage.
    Secretary Napolitano. At this point, ``flexibility'', and I 
put that in quotes, really isn't flexible. There are only so 
many places we can get that kind of money.
    So, like my colleagues said, it is a Hobson's choice. But 
there is no way we would get through sequestration even with 
just a top-line number without serious cuts at airports, 
seaports, land ports, and all of the consequences that occur 
from that.
    Senator Shelby. You have laid it out already, haven't you, 
Dr. Carter?
    Dr. Carter. I think so.
    Senator Shelby. One last question, my time is running away.
    The President, in his State of the Union Address, I 
thought, laid out several new policies that would expand the 
role of the Federal Government. But he also said that nothing 
he proposed, and I will quote him, ``should increase our 
deficit by a single dime.''
    Would any of the President's new policies require an 
increase in discretionary spending? And if so, would the 
Congress be required to raise the caps on discretionary 
spending? And if the caps weren't raised, would agencies face 
additional cost burdens to be borne within the current budget 
constraints?
    Mr. Werfel.
    Mr. Werfel. Yes, thank you for the question.
    It is premature for me to talk specifically about the 
President's budget, which would capture a lot of the 
information that you are requesting. But let me say this, the 
President's budget will build on the $2.5 trillion in deficit 
reduction that has been achieved to date. It will build on the 
framework from last year's budget for $4 trillion in total 
deficit reduction over 10 years.

                           DISCRETIONARY CAPS

    And I will point to you something that has been made 
public. When we issued our guidance to agencies to prepare 
their budgets, so we could submit a budget to the Congress, 
there was very clear direction that the discretionary caps that 
were put in place by the BCA that achieved $1 trillion of the 
$2.5 trillion that I just described are in place, and there are 
very tough choices that need to be made.
    And this is part of the President's overall framework, that 
he is willing to make tough choices on domestic priorities, and 
those are embedded into the discretionary caps in the BCA.
    But moving forward, it does not mean we can't still make 
critical investments in education, in infrastructure, in 
energy, while also balancing our budgets by doing smart things 
on tax reforms and making other responsible spending cuts.
    Senator Shelby. Thank you.
    Chairwoman Mikulski. Excellent.
    Senator Harkin, the chair and subcommittee chair of the 
Labor, Health and Human Services, and Education, and Related 
Agencies Subcommittee.

                    STATEMENT OF SENATOR TOM HARKIN

    Senator Harkin. Thank you very much, Madam Chair.
    I think, first of all, I want to disagree with those who 
say we have a spending problem. Everyone keeps saying we have a 
spending problem. And when they talk about that, it is like 
there is an assumption that somehow we as a Nation are broke. 
We can't afford these things any longer. We are too broke to 
invest in education and housing and things like that.
    Well, look at it this way, we are the richest Nation in the 
history of the world. We are now the richest Nation in the 
world. We have the highest per capita income of any major 
nation. That kind of begs the question, doesn't it? If we are 
so rich, why are we so broke?
    Is it a spending problem? No. It is because we have a 
misallocation of capital, a misallocation of wealth. All of 
this wealth that has been built up by hardworking Americans has 
been accumulated into fewer and fewer hands all the time.
    And then we have a tax code that is skewed toward the 
wealthy; a tax code riddled with loopholes; a tax code that 
encourages companies to offshore jobs, offshore their 
businesses; a tax code that allows a wealthy hedge fund manager 
to pay a lower rate of taxes than a nurse, for example.
    I think it is very interesting that all of this talk we 
have about the sequester, talk about the programs that hit the 
hardest on the homeless and the helpless, the disabled, and, 
yes, also on the middle class, why aren't we talking about a 
sequester that, when the curtain falls, it also falls on all of 
these tax loopholes, that those end on the same day on which we 
are going to cut back the spending that allows us to educate 
our kids with disabilities, Secretary Duncan?
    No, we are not talking about that. We are not talking about 
that.
    So I take exception to those that say we have a spending 
problem. We have a misallocation of capital, a misallocation in 
our tax code.
    In the 1990s, when we had full employment, when we had a 
balanced budget and a growing economy, our revenues equaled 
about 20 percent of our GDP. Now it is down to 16 percent of 
our GDP. So what does that equal? What it equals is more of a 
burden on families with kids with disabilities, Secretary 
Duncan.
    Secretary Donovan, people are homeless, trying to find a 
place to live, a shelter for our veterans.
    And the middle class people that work in the jobs that 
protect our country, Secretary Napolitano, and Dr. Carter, it 
falls on them, too, on the middle class.
    So I have taken a lot of my time to talk, but we have to 
start thinking about this in different terms. We can't just 
focus all of the time on cutting our obligations as a 
Government to build a more fair and just society.
    I still believe, as former Vice President Hubert Humphrey 
once so eloquently said, ``The moral test of Government is how 
it treats those who are in the dawn of life, the children; 
those who are in the twilight of life, the aged; and those in 
the shadows of life, the sick, the needy and the handicapped.'' 
That is a test of Government. And I, quite frankly, don't think 
we are meeting that test right now. We are backing off of that.
    So count me as one of those who, yes, back to a regular 
order, we have to do all of these things. But we can't lose 
sight of the fact that this Federal Government that we 
represent has to be involved--has to be involved--in making 
this a more fair and just society.
    So I know that is sort of an overview, and I have taken all 
my time on that comment.
    But as we move ahead, and I hear voices saying, no, we have 
to exempt defense from the discretionary cuts, if defense is 
exempted, then the disabled ought to be exempted also. And the 
homeless ought to be exempted also. And the middle class 
families that work for you, Secretary Napolitano, they ought to 
be exempted also.
    So I tell you, we have got to get back to a better, 
rational system of revenues and spending in this country, back 
to our obligations.
    So I have taken all my time. I didn't ask a question. But I 
just wanted to make it clear, Madam Chair, that I just feel 
very strongly that it is not just appropriations that is 
causing this problem. It is the lack of the revenue that we 
should be taking in to meet our obligations as a country.
    Thank you, Madam Chair.
    Chairwoman Mikulski. Thank you very much, Senator Harkin. 
Your longstanding reputation for passion and persistence in the 
area of social justice is well-known and well-appreciated.
    I would like to now turn to Senator Collins, who is also 
the ranking member on the Subcommittee on Transportation, and 
Housing and Urban Development, and Related Agencies and also 
comes to us as the former ranking member on the Homeland 
Security Subcommittee. You bring a lot to the table, and we 
look forward to your questions.

                   STATEMENT OF SENATOR SUSAN COLLINS

    Senator Collins. Thank you very much, Madam Chairman.
    It is very difficult to follow the eloquence of my 
colleague from Iowa.
    The fact is, however, I believe we do have a spending 
problem, and the $16.5 trillion debt is ample evidence of that, 
and I say that as one who supported increasing taxes on our 
highest earners.
    The fact is, there is plenty of blame to go around for the 
crisis that we find ourselves in. But there can be no doubt 
that these indiscriminate cuts represent an utter failure to 
set priorities, and we simply cannot allow sequestration to go 
into effect.
    If we do so, we might as well just pack up and go home, 
because if we are just going to have across-the-board cuts, 
what is the point of our being here?
    So I hope we can work together to come up with 
alternatives.
    Secretary Carter, I want to follow up on a point that you 
made, because the ramifications of sequestration are extreme. 
But in my judgment, for DOD, a yearlong continuing resolution 
also would inflict tremendous damage on the Department.
    For example, the Congress has authorized the Navy to 
procure 10 destroyers during the next 5 years as part of last 
year's National Defense Authorization Act. The Navy already has 
the bids for these ships in hand. The Navy is ready to sign. 
But the Navy cannot sign these contracts without an 
appropriations bill.
    Now, here is the point: We risk throwing away significant 
savings on the order of hundreds of millions of dollars as well 
as jeopardizing the stability of the shipbuilding industrial 
base that we have worked so long and hard to preserve if we do 
not complete work on the fiscal year 2013 appropriations bill.

                         CONTINUING RESOLUTION

    So, Dr. Carter, do you agree that it is essential and 
equally important that we not only deal with the sequester, but 
pass the DOD appropriations bill for this year?
    Dr. Carter. It is. They are, both of them, separately but 
together very much so destructive.
    The problem with shipbuilding goes like this: I referred 
earlier to the fact that, in the continuing resolution, we have 
inadequate operations and maintenance dollars, which is why the 
effect of the continuing resolution hits us so fast, so hard in 
training. But separately, to your point, we also need the 
authority to embark on new starts. And the way shipbuilding is 
organized, every new ship is a new start.
    So we are in the absurd position where we are 5 months into 
the fiscal year, and we have the authority to build the ships 
that we built last year and no authority to build the ships 
that we planned to build this year. That is crazy.
    And that has nothing to do with the sequester, by the way, 
that is the continuing resolution, which is a whole other 
problem. As I said, we have both of them.
    Senator Collins. But it is one we do have to address, and 
we can't just do sequestration.
    And I know I have had this same conversation with Secretary 
Napolitano as well.

         SHIFTING EDUCATION FUNDS AMONG PROGRAMS NOT A SOLUTION

    Secretary Duncan, I have met with superintendents, 
principals, and educators from Maine who tell me that my State 
alone would face up to $11 million in cuts in education 
funding. That could reduce funding for critical programs such 
as title I, special education grants, the TRIO programs, rural 
education.
    What does the Department of Education intend to do to help 
schools that are hardest hit by sequestration if this goes into 
effect? For example, could you shift the focus of some of your 
competitive grant programs such as Race for the Top, which I 
know is your favorite, to help fill the gap in education 
spending?
    Secretary Duncan. Race to the Top, the money we spent 
represented less than 1 percent of spending on K-12. That was 
$4 billion. We spend $650 billion, so it was a little more than 
one-half of 1 percent. So to think somehow we could shift a 
small number of dollars to fill the hole here just doesn't make 
sense. The numbers don't work.
    And so, again, the damage here would be irreparable. There 
is very little to anything I can do to cushion that blow.
    And, again, that is why it is so important, with your 
leadership and that of others, to do the right thing here. I 
wish I had a magic wand to wave. I simply don't have that. And 
I would be lying if I told you otherwise.
    Senator Collins. Thank you.
    And, finally, just a comment for Secretary Carter. You made 
such an important point about the Federal civilian workforce. I 
think too often it is thought of as white collar employees who 
are working inside the Beltway.
    Senator Shaheen and I know about the Portsmouth Naval 
Shipyard in Kittery, Maine. These are welders, nuclear 
engineers, and pipe fitters who are going to work at a pier. 
These are the firefighters who put out a very dangerous fire on 
a nuclear submarine. So I think we need to keep that in mind as 
well.
    Thank you, Madam Chairman.
    Chairwoman Mikulski. Thank you.
    Senator Murray, the subcommittee chair on Transportation, 
Housing and Urban Development, and Related Agencies.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you very much, Madam Chairwoman. I 
really appreciate the opportunity today to really hear from a 
really great panel to help us understand the impacts of 
sequestration, should it go into effect.
    I think it is important for all of us to step back and 
remember sequestration was never written into the bill to be 
implemented. If it had been, it would have been a lot more 
thoughtful.
    It was put into the bill simply to force us as Members of 
Congress to come together on a balanced, thoughtful approach on 
how we deal with our national budget.
    So we are here now, 2 weeks away from implementing a policy 
that not only should not be implemented but was never written 
to be implemented. And we cannot shirk our responsibility to 
move forward to replace it with something that is balanced and 
fair.
    And I have been working with Senator Mikulski and others on 
an approach to do that. And I urge all of our colleagues to 
really think about how we can do that moving forward.
    And I do have a letter for the record, Madam Chairwoman, of 
more than 3,000 organizations in this country, from the Human 
Rights Campaign to law enforcement organizations, urging us to 
do just that.
    I would submit it for the record.
    Chairwoman Mikulski. Without objection.
    [The information follows:]
                                                NDD United,
                                 Washington, DC, February 11, 2013.
    Dear Member of Congress: As Congress faces the debt ceiling, fiscal 
year 2013 spending bills, sequestration, and the fiscal year 2014 
budget, the following 3,200 national, State, and local organizations 
urge you to support a balanced approach to deficit reduction that does 
not include further cuts to discretionary programs. The approach to 
deficit reduction has thus far been unbalanced. Discretionary programs 
have contributed $1.5 trillion in spending cuts from the fiscal year 
2011 continuing resolution, the bipartisan Budget Control Act, and the 
bipartisan American Taxpayer Relief Act, while revenues have 
contributed just $600 billion. Additional cuts in discretionary 
programs would put the health, education, safety, and security of all 
Americans at risk.
    Discretionary programs are funded annually by Congress through the 
appropriations process and generally fall into two categories: 
``defense discretionary,'' which includes the Pentagon's budget; and 
``nondefense discretionary'' (NDD), which includes everything else. NDD 
programs are core functions Government provides for the benefit of all, 
including medical and scientific research; education and job training; 
infrastructure; public safety and law enforcement; public health; 
weather monitoring and environmental protection; natural and cultural 
resources; housing and social services; and international relations. 
Every day these programs support economic growth and strengthen the 
safety and security of every American in every State and community 
across the Nation.
    Spending on these programs is not ``out of control.'' On the 
contrary, NDD programs--cut by $900 billion already--represent a small 
and shrinking share of the Federal budget and of our overall economy. 
For example, NDD programs represented just 3.4 percent of our country's 
Gross Domestic Product (GDP) in 2011, consistent with historical 
levels. Under the funding caps established in the bipartisan Budget 
Control Act, by 2021 NDD programs will decline to just 2.5 percent of 
GDP, the lowest level in at least 50 years.
    Continued cuts will have consequences for every American, 
threatening the health, safety, and competiveness of the United States. 
Americans may be left waiting longer for help after natural disasters 
like Hurricane Sandy. They may be more susceptible to deadly infectious 
diseases, like the West Nile virus, Hantavirus, and meningitis. With 
fewer air traffic controllers, flights may be curtailed or safety 
compromised. Classroom size may increase as teachers are laid off. 
National parks will have fewer visitor hours or may close altogether. 
Roads and bridges will continue to crumble. Our communities will lack 
the necessary resources to protect our families, to prevent future 
crimes and to apprehend and prosecute violent criminals. Promising 
research will be curtailed, compromising our global position as a 
scientific leader.
    Discretionary programs support our economy, bolster our global 
competitiveness, and provide an environment where all Americans have 
the opportunity to lead healthy, safe, and productive lives. Only a 
balanced approach to deficit reduction can restore fiscal stability, 
and these programs have done their part. We urge you to work together 
to find a balanced approach to deficit reduction that does not include 
further cuts to these critical programs.
    If you have questions about this letter, please contact Emily 
Holubowich, Executive Director of the Coalition for Health Funding 
(202-484-1100 or [email protected]) or Joel Packer, Executive 
Director of the Committee for Education Funding (202-383-0083 or 
[email protected]).
             national organizations (listed alphabetically)
8th Day Center for Justice
9to5A World Fit For Kids!
Academic Pediatric Association
Academy of Medical Surgical Nurses
Academy of Nutrition and Dietetics
Academy of Radiology Research
AcademyHealth
ACCESS
Act V: The End of AIDS
Ad Hoc Group for Medical Research
Adult Congenital Heart Association
Advocates for Youth
Aerospace Industries Association of America
African American Health Alliance
African American Ministers in Action
AFSE
Afterschool Alliance
AIDS Community Research Initiative of America
AIDS Healthcare Foundation
AIDS Treatment News
AIDS United
Alliance for a Just Society
Alliance for Aging Research
Alliance for Biking & Walking
Alpha-1 Association
Alpha-1 Foundation
Alzheimer's Association
Alzheimer's Foundation of America
American Academy of Child and Adolescent Psychiatry
American Academy of Family Physicians
American Academy of Neurology
American Academy of Nursing
American Academy of Pediatrics
American Alliance of Museums
American Alliance for Health, Physical Education, Recreation and Dance
American Art Therapy Association
American Association for Adult and Continuing Education
American Association for Cancer Research
American Association for Dental Research
American Association for Geriatric Psychiatry
American Association for Health Education
American Association for Marriage & Family Therapy
American Association for Psychoanalysis in Clinical Social Work
American Association for the Advancement of Science
American Association for the Study of Liver Diseases
American Association of Classified School Employees
American Association of Colleges for Teacher Education
American Association of Colleges of Nursing
American Association of Colleges of Osteopathic Medicine
American Association of Colleges of Pharmacy
American Association of Community Colleges (AACC)
American Association of Community Theatre
American Association of Critical-Care Nurses (AACN)
American Association of Physics Teachers
American Association of Poison Control Centers
American Association of Port Authorities
American Association of Radon Scientists and Technologists
American Association of School Administrators
American Association of School Librarians
American Association of Service Coordinators
American Association of State Colleges and Universities
American Association of University Professors (AAUP)
American Association of University Women (AAUW)
American Association on Health and Disability
American Astronomical Society
American Bird Conservancy
American Brain Coalition
American Cancer Society Cancer Action Network
American Chemical Society
American College of Clinical Pharmacy (ACCP)
American College of Preventive Medicine
American Council for School Social Work
American Council on Education
American Council on the Teaching of Foreign Languages (ACTFL)
American Counseling Association
American Dance Therapy Association
American Dental Education Association
American Diabetes Association
American Educational Research Association
American Epilepsy Society
American Federation for Medical Research
American Federation of School Administrators, AFL-CIO
American Federation of Teachers, AFL-CIO
American Forests
American Geophysical Union
American Geosciences Institute
American Geriatrics Society
American Heart Association
American Institute of Biological Sciences
American Jail Association
American Library Association
American Lung Association
American Mathematical Society
American Medical Rehabilitation Providers Association
American Medical Student Association
American Meteorological Society
American Music Therapy Association
American Nephrology Nurses' Association
American Nurses Association
American Occupational Therapy Association
American Organization of Nurse Executives
American Pediatric Society
American Physical Therapy Association
American Planning Association
American Psychiatric Association
American Psychological Association
American Probation and Parole Association
American Public Health Association
American Rivers
American Sexual Health Association
American Sleep Apnea Association
American School Counselor Association
American Social Health Association
American Society for Bone and Mineral Research
American Society for Clinical Laboratory Science
American Society for Clinical Pathology
American Society for Engineering Education
American Society for Microbiology
American Society for Pharmacology & Experimental Therapeutics
American Society of Agronomy
American Society of Clinical Oncology
American Society of Hematology
American Society of Mechanical Engineers (ASME)
American Society of Nephrology
American Society of Pediatric Nephrology
American Society of PeriAnesthesia Nurses (ASPAN)
American Society of Plant Biologists
American Society of Tropical Medicine and Hygiene
American Society on Aging
American Sociological Association
American Speech-Language-Hearing Association
American Therapeutic Recreation Association
American Thrombosis and Hemostasis Network
American Urogynecologic Society
Americans for Nursing Shortage Relief (ANSR) Alliance
Americans for the Arts
America's Service Commissions
amfAR, The Foundation for AIDS Research
Amputee Coalition
Arthritis Foundation
Asian & Pacific Islander American Health Forum
Asian & Pacific Islander Institute on Domestic Violence
Asian & Pacific Islander Wellness Center
Asian American Justice Center, Member of Asian American Center for 
Advancing Justice
ASME
Associated Universities, Inc.
Association for Ambulatory Behavioral Healthcare
Association for Career and Technical Education
Association for Prevention Teaching and Research
Association for Psychological Science
Association for Radiologic & Imaging Nurses (ARIN)
Association for Research in Otolaryngology
Association for Research in Vision and Ophthalmology
Association for Women in Mathematics
Association of Academic Health Centers
Association of Academic Health Sciences Libraries
Association of Ambulatory Behavioral Healthcare
Association of American Cancer Institutes
Association of American Geographers
Association of American Medical Colleges
Association of American Universities
Association of American Veterinary Medical Colleges
Association of Assistive Technology Act Programs (ATAP)
Association of BellTel Retirees, Inc.
Association of Educational Service Agencies
Association of Environmental & Engineering Geologists
Association of Farmworker Opportunity Programs
Association of Jesuit Colleges and Universities (AJCU)
Association of Jewish Aging
Association of Maternal and Child Health Programs
Association of Medical School Pediatric Department Chairs
Association of Minority Health Professions Schools
Association of Nurses in AIDS Care
Association of Prosecuting Attorneys
Association of Public and Land-grant Universities
Association of Public Health Nurses
Association of Rehabilitation Nurses
Association of Research Libraries
Association of School Business Officials International
Association of School Psychologists
Association of Schools and Colleges of Optometry
Association of Science-Technology Centers
Association of State & Territorial Public Health Nutrition Directors
Association of State and Territorial Health Officials
Association of Teacher Educators
Association of University Centers on Disabilities
Association of Women's Health, Obstetric and Neonatal Nurses
Asthma and Allergy Foundation of America
Attention Deficit Disorder Association (ADDA)
Autism National Committee
Basic Education Coalition
Bat Conservation International
Bazelon Center for Mental Health Law
Be the Change, Inc.
Benetech
Benign Essential Blepharospasm Research Foundation
Berkeley Media Studies Group
Biophysical Society
Botanical Society of America
Brain Injury Association of America
Bread for the World
Break the Cycle
Briar Cliff University TRIO Upward Bound
Building Educated Leaders for Life (BELL)
Business Industrial Network
California Institute of Technology
Campaign for Community Change
Campaign for Public Health Foundation
Campaign for Youth Justice
Campaign to Invest in America's Workforce
Campus Compact
CARE
Casa de Esperanza: National Latin @ Network for Healthy Families and 
Communities
C-Change
Center for Biological Diversity
Center of Concern
Center for Effective Government
Center for Employment Training
Center for HIV Law and Policy
Center for Law and Social Policy (CLASP)
Center for Science in the Public Interest
Center for Women Policy Studies
Cerebral Palsy International Research Foundation
ChangeLab Solutions
Charles R. Drew University
Child Care Services Association
Child Welfare League of America
Children and Adults with Attention-Deficit/Hyperactivity Disorder
Children's Defense Fund
Children's Environmental Health Network
Children's HealthWatch
Children's Leadership Council
Children's Mental Health Network
Christopher & Dana Reeve Foundation
Citizen Schools
Citizens United for Rehabilitation of Errants--Women Incarcerated
City Year
Clean Water Action
CLEARCorps USA
Climate Change is Elementary
Clinical Social Work Association
Coalition for a Secure Driver's License
Coalition for Community Schools
Coalition for Health Funding
Coalition for Imaging and Bioengineering Research
Coalition for Juvenile Justice
Coalition for Workforce Solutions
Coalition of Higher Education Assistance Organizations
Coalition to End Childhood Lead Poisoning
Coastal and Estuarine Research Federation
Coastal States Organization
College Board
College Summit
Colleges That Change Lives
Commission on Adult Basic Education (COABE)
Commissioned Officers Association of the U.S. Public Health Service
Committee for Education Funding
Communities Advocating Emergency AIDS Relief (CAEAR) Coalition
Community Action Partnership
Community Anti-Drug Coalitions of America
Community Economic Development Partners, LLC
Conference of Educational Administrators of Schools and Programs for 
the Deaf
Conference of Major Superiors of Men
Consortium for Citizens with Disabilities
Consortium for Ocean Leadership
Consortium for School Networking
Consortium of Social Science Associations
Cooley's Anemia Foundation
COPD Foundation
Corporate Hepatitis Alliance
Corporation for a Skilled Workforce
Corporation for Supportive Housing
Council for Adult and Experiential Learning
Council for Advancement of Adult Education
Council for Advancement of Adult Literacy
Council for Exceptional Children
Council for Opportunity in Education
Council of Administrators of Special Education, Inc. (CASE)
Council of State and Territorial Epidemiologists
Council of State Community Development Agencies
Council of the Great City Schools
Council on Social Work Education
Council on Undergraduate Research
Covenant House International
Crohn's and Colitis Foundation of America
Crop Science Society of America
CURE-Women Incarcerated
Defeat Diabetes Foundation
Defenders of Wildlife
Dermatology Nurses Association
Digestive Disease National Coalition
Directors of Health Promotion and Education
Disability Rights Education & Defense Fund
District 1199C Training & Upgrading Fund
Division for Early Childhood of the Council for Exceptional Children 
(DEC)
Drugs for Neglected Diseases initiative (DNDi)
Dystonia Advocacy Network
Dystonia Medical Research Foundation
Early Care and Education Consortium
Earth Day Network
Earthquake Engineering Research Institute
Easter Seals
Ecological Society of America
Education Industry Association
Education Law Center
Educational Talent Search
Educational Theatre Association
Elderly Housing Development and Operations Corporation (EHDOC)
Emergency Nurses Association
Endangered Species Coalition
Enterprise Community Partners, Inc.
Epilepsy Foundation
Equal Justice Works
Evangelical Lutheran Church in America (ELCA)
Every Child By Two--Carter/Bumpers Champions for Immunization
FairTest: National Center for Fair & Open Testing, Inc.
Family Caregiver Alliance
Family Promise of Lycoming County
Fanconi Anemia Research Fund
Federal Law Enforcement Officers Association
Federation of Associations in Behavioral & Brain Sciences
Federation of Materials Societies
Fellowship Health Resources, Inc.
Fight Colorectal Cancer
First Focus Campaign for Children
Foster Family-Based Treatment Association
Franklin County Head Start
Fred Hutchinson Cancer Research Center
Friends of Agency for Healthcare Research and Quality
Friends of National Center for Health Statistics
Friends of the National Institute of Child Health and Human Development 
(NICHD)
Friends of UNFPA
Futures Without Violence (formerly Family Violence Prevention Fund)
Gay Men's Health Crisis
Gay, Lesbian & Straight Education Network (GLSEN)
Generations United
Genetics Policy Institute
Goodwill Industries of the Valleys
Gray Panthers
Greenpeace
Half in Ten
Harm Reduction Coalition
Health & Disability Advocates
Health Professions and Nursing Education Coalition
Healthcare Leadership Council
HealthHIV
Heifer International
Helen Keller International
Hemophilia Federation of America
Hepatitis B Foundation
HIGH IMPACT Mission-based Consulting & Training
Higher Education Consortium for Special Education
HighScope Educational Research Foundation
HIV Law Project
HIV Medicine Association (HIVMA)
HIV Prevention Justice Alliance
Housing Assistance Council
Human Factors and Ergonomics Society
Human Rights Campaign
Human Rights Project for Girls
iCAST (International Center for Appropriate & Sustainable Technology)
Idea Fuel
IDEA Infant Toddler Coordinators Association (ITCA)
Illinois Campus Compact
Infectious Diseases Society of America
Innocence Project
Innovate+Educate
Innovations in Civic Participation
Insight Center for Community Economic Development
Institute for Educational Leadership
InterAction
International Association of Jewish Vocational Services (IAJVS)
International Certification and Reciprocity Consortium (IC&RC)
International Essential Tremor Foundation
International Foundation for Functional Gastrointestinal Disorders
International Myeloma Foundation
International Reading Association
International Society for Developmental Psychobiology
International Society for Technology in Education
Interstitial Cystitis Association
Iron Disorders Institute
Jeffrey Modell Foundation
Jewish Council for Public Affairs
Jewish Labor Committee
Jobs for the Future (JFF)
Joint Advocacy Coalition of ACRT, APOR, CRF, and SCTS
Juma Ventures
Jumpstart
KaBOOM!
Kids vs Global Warming/iMatter Campaign
Knowledge Alliance
Leadership Conference on Civil and Human Rights
LeadingAge
League of Conservation Voters
Learning Disabilities Association of America
Legal Action Center
Legal Momentum
Local Initiatives Support Corporation
Long-term Ecological Research Network
Lupus Foundation of America, Inc.
Lupus Research Institute
Lutheran Services in America
Magnet Schools of America
Mal de Debarquement Syndrome Balance Disorder Foundation
Manufactured Home Owners Association of America
March of Dimes
Marie Stopes International-US (MSI-US)
Marine Conservation Institute
Materials Research Society
Mathematical Association of America
Meals On Wheels Association of America
Medical Library Association
Medicare Rights Center
Meharry Medical College
Mental Health America
Mercy Housing, Inc.
Mesothelioma Applied Research Foundation
Metro TeenAIDS
Mexican American Legal Defense and Educational Fund
Military Impacted Schools Association
Monarch Housing Associates
Morehouse School of Medicine
NAACP
NAADAC--The Association for Addiction Professionals
NAfME: National Association for Music Education
NAFSA: Association of International Educators
NARAL Pro-Choice America
National Abortion Federation
National Academy of Elder Law Attorneys
National Advocacy Center of the Sisters of the Good Shepherd
National African American Drug Policy Coalition, Inc.
National AIDS Housing Coalition
National Alliance for Eye and Vision Research
National Alliance for Media Arts & Culture
National Alliance of Black School Educators
National Alliance of Community Economic Development Associations 
(NACEDA)
National Alliance of State & Territorial AIDS Directors
National Alliance on Mental Illness
National Alliance to End Homelessness
National Alliance to End Sexual Violence
National Area Health Education Center (AHEC) Organization
National Asian Pacific Center on Aging (NAPCA)
National Assembly on School-Based Health Care
National Association for Bilingual Education
National Association for Biomedical Research
National Association for Children's Behavioral Health
National Association for College Admission Counseling
National Association for County Community and Economic Development
National Association for Geriatric Education and National Association 
of Geriatric Education Centers
National Association for Hispanic Elderly
National Association for Music Education
National Association for Public Health Statistics and Information 
Systems
National Association for Rural Mental Health
National Association for Sport and Physical Education
National Association for the Education of Homeless Children and Youth
National Association for the Education of Young Children
National Association of Area Agencies on Aging
National Association of Chronic Disease Directors
National Association of Clinical Nurse Specialists
National Association of Community Health Centers
National Association of Councils on Developmental Disabilities
National Association of County and City Health Officials
National Association of County Behavioral Health and Developmental 
Disabilities Directors (NACBHDD)
National Association of Development Organizations (NADO)
National Association of Drug Court Professionals
National Association of Elementary School Principals
National Association of Federally Impacted Schools
National Association of Graduate-Professional Students
National Association of Housing and Redevelopment Officials
National Association of Housing Cooperatives
National Association of Human Rights Workers
National Association of Local Housing Finance Agencies
National Association of Marine Laboratories
National Association of Nutrition and Aging Services Programs (NANASP)
National Association of People with AIDS (NAPWA)
National Association of Private Special Education Centers
National Association of Professional Geriatric Care Managers
National Association of Pupil Services Administrators
National Association of Rural Mental Health
National Association of School Nurses
National Association of School Psychologists
National Association of Secondary School Principals
National Association of Social Workers (NASW)
National Association of State Alcohol and Drug Abuse Directors
National Association of State Directors of Career Technical Education 
Consortium
National Association of State Directors of Special Education
National Association of State Emergency Medical Services Officials
National Association of State Head Injury Administrators
National Association of State Long-Term Care Ombudsman Programs (NASOP)
National Association of State Mental Health Program Directors
National Association of States United for Aging and Disabilities
National Association of Thrift Savings Plan Participants
National Association of Workforce Boards (NAWB)
National Association of Workforce Development Professionals (NAWDP)
National Black Nurses Association
National Center for Healthy Housing
National Center for Technological Literacy
National Center for Transgender Equality
National Center for Victims of Crime
National Center on Domestic and Sexual Violence
National Coalition Against Domestic Violence
National Coalition for Asian Pacific American Community Development
National Coalition for Literacy
National Coalition for Promoting Physical Activity
National Coalition of STD Directors
National Community Development Association
National Community Reinvestment Coalition
National Community Tax Coalition
National Congress of American Indians
National Consumer Voice for Quality Long-Term Care
National Council for Advanced Manufacturing
National Council for Community and Education Partnerships (NCCEP)
National Council for Community Behavioral Healthcare
National Council for Workforce Education
National Council of Jewish Women
National Council of La Raza
National Council of State Directors of Adult Education
National Council of State Housing Agencies
National Council of Women's Organizations
National Council on Aging
National Council on Independent Living
National Criminal Justice Association
National Dating Abuse Helpline
National Disability Rights Network
National District Attorneys Association
National Domestic Violence Hotline
National Ecological Observatory Network, Inc. (NEON)
National Education Association
National Education Association Student Program
National Employment Law Project
National Estuarine Research Reserve Association
National Fair Housing Alliance
National Family Planning & Reproductive Health Association
National Federation of Families for Children's Mental Health
National Forum for Heart Disease and Stroke Prevention
National Fragile X Foundation
National Fund for Workforce Solutions (NFWS)
National Head Start Association
National Health Care for the Homeless Council
National Healthy Start Association
National Health Care for the Homeless
National Hemophilia Foundation
National High School Equivalency Program/College Assistance Migrant 
Program Association
National Hispanic Council on Aging
National Hispanic Media Coalition
National Hispanic Medical Association
National Housing Conference
National Housing Law Project
National Housing Trust
National Human Services Assembly
National Immigration Law Center
National Indian Impacted Schools Association
National Juvenile Justice Network
National Kidney Foundation
National Leased Housing Association
National Latina Institute for Reproductive Health
National Latino Alliance for the Elimination of Domestic Violence 
(Alianza)
National Latino Behavioral Health Association
National Law Center on Homelessness & Poverty
National League for Nursing
National Low Income Housing Coalition
National Lung Cancer Partnership
National Marfan Foundation
National Marine Sanctuary Foundation
National Minority AIDS Council
National Multiple Sclerosis Society
National Network for Youth
National Network of Public Health Institutes
National Network of Sector Partners (NNSP)
National Network to End Domestic Violence
National Organization of Social Security Claimants' Representatives
National Parks Conservation Association
National Partnership for Women & Families
National Partnership to End Interpersonal Violence
National Pediatric AIDS Network
National Psoriasis Foundation
National PTA
National Resource Center on Domestic Violence
National Rural Education Advocacy Coalition
National Rural Education Association
National Rural Housing Coalition
National School Boards Association
National Science Teachers Association
National Senior Corps Association
National Skills Coalition
National Spasmodic Dysphonia Association
National Spasmodic Torticollis Association
National Student Nurses' Association, Inc.
National Summer Learning Association
National Superintendents Roundtable
National Task Force to End Sexual and Domestic Violence
National Title I Association
National Tourette Syndrome Association
National Transitional Jobs Network (NTJN)
National Urban League
National Violence Prevention Network
National Viral Hepatitis Roundtable
National WIC Association
National Women's Conference Committee
National Women's Health Network
National Writing Project
National Youth Employment Coalition (NYEC)
National Youth Leadership Council
Natural Resources Defense Council
Nemours
NephCure Foundation
New Horizons Computer Learning Centers
New Leaders
North American Society for Pediatric Gastroenterology, Hepatology and 
Nutrition
Nurse-Family Partnership
Nurses Organization of Veterans Affairs
Oceana
Ocean Conservancy
Oncology Nursing Society
Pancreatic Cancer Action Network (PanCAN)
Parents As Teachers
Parkinson's Action Network
Pediatric Stroke Network, Inc.
People For the American Way
PFLAG National (Parents, Families and Friends of Lesbians and Gays)
Physicians for Reproductive Choice and Health
Planned Parenthood Federation of America
Points of Light
Population Action International
Population Association of America/Association of Population Centers
Population Connection
Population Institute
Positive Education, Inc.
Prevent Blindness America
Preventive Cardiovascular Nurses Association
ProLiteracy
Professional Association of Social Workers in HIV and AIDS
Project Inform
ProLiteracy
Provincial Council of the Clerics of St. Viator (Viatorians)
Public Allies, Inc.
Public Education Network
Public Health Foundation
Public Health Institute
Public Health Solutions
Public Housing Authorities Directors Association
Public Lands Service Coalition
Pulmonary Hypertension Association
Racial and Ethnic Health Disparities Coalition
Racine County Older Adult Nutrition Program
Rape, Abuse & Incest National Network (RAINN)
Reading Partners
Rebuilding Together
Religious Coalition for Reproductive Choice
Research Allies for Lifelong Learning
Resources for Human Development, Inc.
Restore America's Estuaries
Robert F. Kennedy Children's Action Corps
Rose F. Kennedy University Center for Excellence in Developmental 
Disabilities
RTI International
Rushmere Community Development Corporation
Ryan White Medical Providers Coalition
Safe Kids Worldwide
Safe States Alliance
Sargent Shriver National Center on Poverty Law
Save the Children
School Social Work Association of America
Scleroderma Foundation
Sea Grant Association
SEDL
Society for Industrial and Organizational Psychology
Society of Behavioral Medicine
Society of Experimental Social Psychology
Society of Mathematical Psychology
Society of Multivariate Experimental Psychology
Southwest Educational Development Laboratory (SEDL)
SPIE, The International Society for Optics and Photonics
Senior Service America, Inc.
Services and Advocacy for GLBT Elders (SAGE)
Sexuality Information and Education Council of the United States 
(SIECUS)
Sisters of Charity of Nazareth Congregational Leadership
Sisters of Mercy of the Americas
Sjogren's Syndrome Foundation
Sleep Research Society
Society for Advancement of Violence and Injury Research
Society for Computers in Psychology
Society for Healthcare Epidemiology of America
Society for Industrial and Applied Mathematics
Society for Maternal-Fetal Medicine
Society for Medical Decision Making
Society for Neuroscience
Society for Pediatric Research
Society for Public Health Education
Society for Women's Health Research
Society of General Internal Medicine
Society of Gynecologic Oncology
Society of Urologic Nurses and Associates
Soil Science Society of America
Southeast Asia Resource Action Center
Spark Action
Special Olympics, Inc.
Spina Bifida Association
Stand Up for Rural America
State Educational Technology Directors Association
Stem Cell Action Coalition
Strategic Applications International
STRIVE National
Student Conservation Association
Sugar Law Center for Economic & Social Justice
Teach For America
Teaching Strategies, LLC
Technical Assistance Collaborative
Telecare Corporation
TESOL International Association
The Advocacy Institute
The AIDS Institute
The American Society for Cell Biology
The Arc of the U.S.
The Aspen Institute Workforce Strategies Initiative
The Borgen Project
The Center for the Celebration of Creation
The Coalition for the Life Sciences
The Community Builders, Inc.
The Corps Network
The Education Trust
The Eisen Group
The Endocrine Society
The Every Child Matters Education Fund
The Gerontological Society of America
The Imani Project
The Myelin Project
The National Center for Learning Disabilities
The National Center on Family Homelessness
The National Council for Science and the Environment
The National Crittenton Foundation
The National Indian Head Start Directors Association
The Polycystic Kidney Disease Foundation
The Salvation Army
The Trust for Public Land
The United Methodist Church
The Wilderness Society
Travelers Aid International
Treatment Action Group
Treatment Communities of America
Treatment Systems Development
Trust for America's Health
Tufts University
Tuskegee University's College of Veterinary Medicine, Nursing, and 
Allied Health
U.S. Water Fitness Association
U.S. Positive Women's Network
U.S. Soccer Foundation
UNCF
Union for Reform Judaism
Unite 2 Fight Paralysis
United Church of Christ
United Church of Christ Justice and Witness Ministries
United for Medical Research
United Neighborhood Centers of America
United Spinal Association
United States Breastfeeding Committee
UNITY, Society for the Advancement of Violence & Injury Research
Universities Research Association, Inc.
University Corporation for Atmospheric Research
U.S. Climate Action Network
U.S. Hereditary Angioedema Association
VALUEUSA
Vasculitis Foundation
Vera Institute of Justice
Voices for America's Children
Voices for National Service
Voices for Progress
W. Haywood Burns Institute
Witness to Innocence
WestEd
Wider Opportunities for Women (WOW)
Women Employed
Women in Film
WomenHeart: The National Coalition for Women with Heart Disease
Women's Action for New Directions
Wonderlic, Inc.
Woodhull Sexual Freedom Alliance
Workforce Learning Strategies
World Education, Inc.
World Wildlife Fund
Young Invincibles
YouthBuild USA
ZERO TO THREE
  regional, state, and local organizations (listed alphabetically, by 
                                 state)
Alabama
1917 HIV/AIDS Outpatient Clinic at University of Alabama at Birmingham, 
Birminhgam
AIDS Alabama, Birmingham
Alabama Association for Career and Technical Education, Montgomery
Alabama Association of School Business Officials, Huntsville
Alabama Association of Secondary School Principals, Montgomery
Alabama Council of Administrators in Special Education, Guntersville
Alabama Disability Advocacy Program, University of Alabama, Tuscaloosa
Alabama School Counselor Association, Montgomery
Alabama Disabilities Advocacy Program, Tuscaloosa
Auburn Housing Authority, Auburn
Eastside Mental Health, Birmingham
Learning Disabilities Association of Alabama, Montgomery
Low Income Housing Coalition of Alabama, Birmingham
National Alliance on Mental Illness (NAMI) Shoals, Florence
Southwest Alabama Behavioral Healthcare Systems, Monroeville
The Concerned Citizens of Atmore ``Unity in the Community,'' Atmore
Unity Wellness Center Housing Department, Auburn
VOICES for Alabama's Children, Montgomery
YWCA Central Alabama, Birmingham
Alaska
Akeela Development Corporation, Anchorage
Alaska Association of Secondary School Principals, Fairbanks
Alaska Council of Administrators of Special Education, Fairbanks
Alaska Innocence Project, Anchorage
Alaska Occupational Therapy Association, Anchorage
Cook Inlet Housing Authority, Anchorage
Denali Family Services, Anchorage
Disability Law Center of Alaska, Anchorage
Kawerak, Inc., Nome
Kenai Peninsula Food Bank, Soldotna
Kenai Senior Services, Kenai
Southeast Alaska Regional Health Consortium (SEARHC), Juneau
University of Alaska Anchorage, Center for Human Development, Anchorage
American Samoa
American Samoa Office of Protection & Advocacy for the Disabled, Pago 
Pago
  
Arizona
Arizona Association for Lifelong Learning, Phoenix
Arizona Center for Disability Law, Tucson
Arizona Council of Administrators of Special Education, Phoenix
Arizona Housing Alliance, Phoenix
Arizona Justice Project, Phoenix
Arizona School Administrators, Inc., Phoenix
Arizona School Counselors Association, Sahuarita
Arizona State Impact Aid Association, Sacaton
Arizona Institute for Peace, Education, and Research, Tempe
Association for Career and Technical Education of Arizona (ACTEAZ), 
Tucson
Association for Supportive Child Care, Tempe
Association of Arizona Food Banks, Phoenix
Blackwater Enterprises, Rdc, Higley
Booker T. Washington Child Development Center, Inc., Phoenix
Cedar Unified School District, Keams Canyon
Cocopah Head Start, Somerton
Community Intervention Associates, Inc., Yuma
Compass Affordable Housing, Tucson
Cornucopia Community Advocates, Sedona
Early Head Start, Littlefield
Fellowship Square Tucson, Tucson
Fort Thomas Unified School District, Fort Thomas
Foundation for Senior Living, Phoenix
Holbrook Unified School District #3, Holbrook
Hospice Family Care, Inc., Prescott
Housing America Corporation, Somerton
Local Initiative Support Corporation Phoenix, Phoenix
Mayer Elders Club, dba Mayer Area Meals on Wheels, Mayer
McDowell Healthcare Center, Phoenix
Old Pueblo Community Services, Tucson
Our Family Services, Tucson
Parker Unified School District #27, Parker
Peach Springs USD #8, Peach Springs
Pinal County Public Health Services District, Florence
Portable Practical Educational Preparation, Inc., Tucson
Prescott Meals on Wheels, Prescott
Sacaton Elementary School District #118, Sacaton Teens, Training and 
Taxes, Parks
Tuba City Unified School District #15, Tuba City Tucson Planning 
Council for the Homeless, Tucson
United Food Bank, Mesa
Valley Interfaith Project, Sun City
Whiteriver Unified School District, Whiteriver Unified School District
Window Rock Unified School District #8, Fort Defiance
Yarnell Senior Community Center, Yarnell
Arkansas
Area Agency on Aging of Southeast Arkansas, Inc., Pine Bluff
Arkansas Advocates for Children and Families, Little Rock
Arkansas Association of School Business Officials, Little Rock
Arkansas Association of Secondary School Principals, Springdale
Arkansas Association of Student Assistance Programs, Fayetteville
Arkansas Council of Administrators in Special Education, North Little 
Rock
Arkansas Education Association, Little Rock
Arkansas Federation of Families for Children's Mental Health (AFFCMH), 
Little Rock
Disability Rights Center of Arkansas, Little Rock
Family Violence Prevention, Inc., Batesville
Henderson State University, Arkadelphia
Little Angels Childcare, Prescott
Little Rock Community Mental Health Center, Little Rock
Pinon Unified School District #4, Pinon
Portable Practical Educational Preparation, Inc., Tucson
National Alliance on Mental Illness (NAMI) Arkansas, Springdale 
Affiliate, Siloam Springs
Universal Housing Development Corporation, Russellville
California
Advocates for Peace and Justice, Irvine United Congregational Church, 
Irvine
Affordable Housing Network of Santa Clara County, San Jose
Age Well Senior Services, Inc., Laguna Woods
AIDS Legal Referral Panel of San Francisco, San Francisco
AIDS Project Los Angeles, Los Angeles
American Family Housing, Midway City
Armona Union Elementary School District, Armona
Association of California School Administrators, Sacramento
California Association of Alcohol and Drug Abuse Counselors (CAADAC), 
Sacramento
California Association of School Business Officials, Sacramento
California Center for Public Health Advocacy, Davis
California Coalition for Rural Housing, Sacramento
California Community Colleges Chancellor's Office, Sacramento
California Council of Administrators of Special Education (CA CASE), 
Santa Rosa
California Council of Community Mental Health Agencies, Sacramento
California Department of Public Health, Sacramento
California Hepatitis Alliance, San Francisco
California Housing Partnership, San Francisco
California Innocence Project, San Diego
California Lutheran University, Thousand Oaks
California Small School Districts' Association, Sacramento
California Teachers Association, Burlingame
California WIC Association, Sacramento
California Workforce Investment Board, Sacramento
California Association for Micro Enterprise Opportunity (CAMEO), San 
Francisco
Central Union Elementary School District, Lemoore
Children Now, Oakland
Children's Defense Fund-California, Oakland
Church of All, Burbank
Citizen Schools California, Redwood City
Community Action Napa Valley, Napa
Community Action Partnership Food Bank of San Bernardino County, San 
Bernardino
Community Action Partnership of San Luis Obispo County, Inc., San Luis 
Obispo
Community Research Foundation, San Diego
Council of University of California Faculty Associations, Berkeley
Desert Manna, Barstow
Disability Rights California, Sacramento
Disability Services & Legal Center, Santa Rosa
East Bay Housing Organizations, Oakland
Epilepsy Foundation of Northern California, San Francisco
Fair Housing Council of Central California, Fresno
Fair Housing of Marin, San Rafael
Ferguson and Company, Oakland
First Baptist Church Head Start, Pittsburg
Foundation for Successful Solutions, Los Angeles
Fresno County EOC Head Start, Fresno
HIV ACCESS, Alameda County
Housing Authority of the City of Calexico (HACC), Calexico
Housing Authority of the City of Santa Barbara, Santa Barbara
Housing Authority of the City of Upland, Upland
Housing California, Sacramento
Housing Rights Committee of San Francisco, San Francisco
Independent Living Resource Center San Francisco, San Francisco
Interdisciplinary Leadership Education in Neurodevelopmental and 
Related Disabilities Training Program (CA-LEND), Los Angeles
Irvine Meals on Wheels, Irvine
Jewish Labor Committee Western Region, Los Angeles
Klamath-Trinity Joint Unified School District, Hoopa
Kalusugan (Good Health) Community Services, National City
Kings County Charter--Association of California School Administrators, 
Hanford
Kings County Office of Education, Hanford
Kings River-Hardwick Elementary School District, Hanford
KyotoUSA, Berkeley
Lake Family Resource Center, Kelseyville
Lakeside Union Elementary School District, Hanford
Lemoore Union High School District, Lemoore
Lincoln Child Center, Oakland
Local Child Care Planning Council, Oroville
Local Government Commission, Sacramento
Local Initiatives Support Corporation Bay Area, San Francisco
Local Initiatives Support Corporation Los Angeles, Los Angeles
Local Initiatives Support Corporation San Diego, San Diego
Los Angeles Area Chamber of Commerce, Los Angeles
Los Angeles-Orange County Environmental Training Center, Anaheim
Los Angeles Unified School District (LAUSD), Los Angeles
Meals-on-Wheels Greater San Diego, Inc., San Diego
Mending Wheel, Fortuna
Mental Health America of California, Sacramento
Mexican American Opportunity Foundation, Montebello
Mizell Senior Center, Palm Springs
MobileMD, Alameda
Momentum for Mental Health, San Jose
Monterey County Health Department WIC Program, Salinas
Muroc Joint Unified School District, Edwards
Napa Valley Community Housing, Napa
National Alliance on Mental Illness (NAMI) Yolo County, Davis
National Council of Jewish Women, Contra Costa Section, Walnut Creek
National Council of Jewish Women, Long Beach Section, Huntington Beach
National Council of Jewish Women, Los Angeles
National Council of Jewish Women, Sacramento
National Council of Jewish Women, Topanga
New Life Advocacy, Los Angeles
Northern California Innocence Project, Santa Clara University School of 
Law, Santa Clara
Oasis Clinic, Los Angeles
Oceanside Unified School District, Oceanside
Oldtimers Housing Development Corporation--IV, Huntington Park
Pacific Asian Consortium in Employment (PACE), Los Angeles
Parent Voices El Dorado County Chapter, South Lake Tahoe
Parent Voices Southern Alameda County, Hayward
Parents' Place Family Resource and Empowerment Center, West Covina
Peninsula Volunteers Inc, Menlo Park
Portia Bell Hume Behavioral Health and Training Center, Concord
PowerWorks, San Francisco
Project Sister Family Services, Pomona
Sacramento Housing Alliance, Sacramento
San Diego Housing Federation, San Diego
San Fernando Valley Community Mental Health Center, Inc., Van Nuys
San Gaberial Valley/Whittier Chapter of NOW, Fontana
San Mateo County HIV Program Community Board, San Mateo County
Santa Cruz Community Counseling Center Head Start, Santa Cruz
Senior Network Services, Santa Cruz
Senior Services Coalition of Alameda County, Oakland
Shasta Senior Nutrition Programs, Redding
Sierra Cascade Family Opportunities Head Start, Susanville
Sierra Cascade Family Opportunities, Inc., Quincy
Sierra Senior Providers, Inc., Sonora
Silver Valley Unified School District, Yermo
SRO Housing Corporation, Los Angeles
State of California Office of AIDS Surveillance Section, Fresno
Stop the GA Cuts Coalition, Oakland
Tarjan Center at UCLA, Los Angeles
The Non-Profit Housing Association of Northern California, San 
Francisco
The Occupational Training Institute, Foothill-De Anza Community College 
District, Cupertino
The Public Interest Law Project, Oakland
The Wall Las Memorias Project, Los Angeles
Time for Change Foundation, San Bernardino
United Administrators of San Francisco, San Francisco
University of California (U.C.) Riverside Faculty Association, 
Riverside
University of California (U.C.) Berkeley Faculty Association, Berkeley
University of California at Davis Faculty Association, Davis
University of California Santa Cruz Faculty Association, Santa Cruz
University of Southern California School of Pharmacy
Violence Prevention Coalition of Greater Los Angeles, Los Angeles
Volunteers of America Los Angeles, Los Angeles
Watts/Century Latino Organization, Los Angeles
Westside Progressives, Los Angeles
Women Organized to Respond to Life-threatening Diseases (WORLD), 
Oakland
Rural Community Assistance Corporation, West Sacramento
Colorado
Academy School District #20, Colorado Springs
ACADIA LLC, Boulder
Adams County Housing Authority, Commerce City
Adams County School District #14, Commerce City
Adams County Workforce and Business Center, Brighton
Boulder County Network, Boulder
Boulder Housing Partners, Boulder
Colorado Association for Career and Technical Education, Denver
Colorado Association of School Executives, Englewood
Colorado Campus Compact, Denver
Colorado Center on Law and Policy, Denver
Colorado Chapter of ASPIRE, Denver
Colorado Children's Campaign, Denver
Colorado Education Association, Denver
Colorado NAHRO, Boulder
Colorado School Counselor Association, Denver
Colorado School Social Work Association, Fort Collins
Colorado Thespians--Educational Theatre Association, Denver
Colorado Urban Workforce Alliance, Denver
Community Reach Center, Thornton
Community Strategies Institute, Denver
Delta Housing Authority, Delta
Denver's Great Kids Head Start, Denver
Denver Housing Authority, Denver
Federation of Families for Children's Mental Health, Colorado Chapter, 
Denver
FRESC: Good Jobs, Strong Communities, Denver
Healthy Colorado Youth Alliance, Denver
Housing Authority of the County of Yuma, Yuma
Housing Resources of Western Colorado, Grand Junction
Ignacio School District 11JT, Ignacio
Julesburg Housing Authority, Julesburg
LeaderQuest, Denver
Mental Health America of Colorado, Denver
Occupational Therapy Association of Colorado, Denver
Occupy Greeley, Greeley
Public Allies at Eagle Rock School, Estes Park
Regis University, Denver
RNA Group, Denver
Rocky Mountain Wild, Denver
Servicios de La Raza, Inc., Denver
Sexual Assault Response Advocates (S.A.R.A)., Inc., Fort Morgan
Southern Ute Indian Tribe, Ignacio
The Bell Policy Center, Denver
The Legal Center for People with Disabilities and Older People, Denver
The Pendulum Foundation, Denver
Connecticut
1199NE Training and Upgrade Fund, Hartford
All Our Kin, Inc., New Haven
BHcare, Ansonia
Bridgeport Council of Administrators and Supervisors, Bridgeport
Center for Latino Progress--CPRF, Hartford
Collaborative Center for Justice, Inc., Hartford
Connecticut AIDS Resource Coalition, Hartford
Connecticut Association for Human Services, Hartford
Connecticut Association of Directors of Health, Hartford
Connecticut Association of School Business Officials, West Hartford
Connecticut Association of School Psychologists, Bridgeport
Connecticut Association of School Social Workers (CASSW), New Haven
Connecticut Association of Schools, Cheshire
Connecticut Community College System, Hartford
Connecticut Education Association, Hartford
Connecticut Federation of School Administrators, Cromwell
Connecticut Food Bank, East Haven
Connecticut Housing Coalition, Wethersfield
Connecticut Voices for Children, New Haven
Connecticut Women's Education and Legal Fund (CWEALF), Hartford
Eastern Highlands Health District, Storrs
Family Services of Greater Waterbury, Waterbury
FSW, Bridgeport
Gilead Community Services, Middletown
Holy Family Home and Shelter, Inc., Willimantic
LAMPP Project--Connecticut Children's Medical Center, Hartford
Local Initiatives Support Corporation, Hartford
National Alliance on Mental Illness (NAMI) Farmington Valley, Avon
Norwich School Administrator's Association, Norwich
Our Piece of the Pie, Hartford
Public Assisted Housing Resident Network (PHRN), Norwalk
Region 16 Administrators Association, Prospect
Regional School District 16, Prospect
Saint Francis Hospital and Medical Center, Hartford
Sexual Assault Crisis Center of Eastern CT, Inc., Willimantic
St. Philip House, Plainville
University of Connecticut A.J. Pappanikou Center for Excellence in 
Developmental Disabilities Education, Research and Service, Farmington
Village for Families and Children, Hartford
Wellmore Behavioral Health, Waterbury
Woodland Regional High School, Beacon Falls
Delaware
Delaware Association of School Administrators, Dover
Delaware Association of School Psychologists, Wilmington
Delaware School Counselor Association, Dover
Delaware State Education Association, Dover
Epilepsy Foundation of Delaware, Wilmington
Ministry of Caring, Inc., Wilmington YWCA Delaware, Wilmington
District of Columbia
Clearinghouse on Women's Issues
Council of School Officers, American Federation of School 
Administrators, Local 4, AFL-CIO D.C.
D.C. Behavioral Health Association
D.C. LEARNs
D.C. Coalition Against Domestic Violence
Defeat Poverty D.C.
District of Columbia Occupational Therapy Association
Edward C. Mazique Parent Child Center, Inc.
Georgetown University Center for Excellence in Developmental 
Disabilities (UCEDD)
Georgetown Center for Poverty, Inequality and Public Policy
Georgetown University Medical Center
Living Wages Adult Education Program
Local Initiatives Support Corporation Washington, DC
National Association of Local Housing Finance Agencies
Potomac Gardens Resident Council
Public Allies Washington, DC
United Way of the National Capital Area
Florida
1000 Friends of Florida, Tallahassee
Ability Housing of Northeast Florida, Inc., Jacksonville
Adult and Community Educators of Florida, Inc., Tallahassee
Bond Community Health Center, Inc., Tallahassee
Broward Meals on Wheels, Fort Lauderdale
Catholic Charities Housing, Diocese of Venice, Inc., Sarasota/Venice
Center for Independent Living of South Florida, Inc., Miami
Century Village Democratic Club, West Palm Beach
Children's Forum, Tallahassee
Christian Coalition Against Domestic Abuse, Miami
City of Deerfield Beach, Deerfield Beach
Coalition for Independent Living Options, West Palm Beach
Community Coalition on Homelessness, Bradenton
Community Enterprise Investments Inc., Pensacola
Community Justice Project--Florida Legal Services, Miami
Dab the AIDS Bear Project, Oakland Park
Daytona State College, Daytona Beach
Department of Community Development, Miami
Depression and Bipolar Support Alliance (DBSA), St. Cloud
disAbility Solutions for Independent Living, Inc., Daytona Beach
Documents International, St. Petersburg
Dunbar Center, Inc., Hobe Sound
Epilepsy Foundation of Florida, Miami
Familias Latinas Dejando Huellas, Tampa
Farmworker Association of Florida, Apopka
Florida Alliance of Community Development Corporations, Inc., 
Jacksonville
Florida Alliance for Health, Physical Education, Recreation, Dance and 
Sport, Parkland
Florida CASE, Archer
Florida Center for Fiscal and Economic Policy, Tallahassee
Florida Education Association, Tallahassee
Florida HIV/AIDS Advocacy Network, Oakland Park
Florida HIV/AIDS Patient Care Planning Group, Freeport
Florida School Counselor Association, Safety Harbor
Florida Supportive Housing Coalition, Tallahassee
Fusion, Wilton Manors
Gay Free If You Want To Be, Clearwater
Heart of Putnam Coalition, Palatka
Helen B. Bentley Family Health Center, Miami
Homes in Partnership, Inc., Apopka
Hope and Help Center of Central Florida, Inc., Orlando
Housing and Homeless Assistance Program, North Miami
Innocence Project of Florida, Tallahassee
Life Management Center of Northwest Florida, Panama City
Local Initiatives Support Corporation, Jacksonville
Meals on Wheels, Etc., Sanford
Miami Coalition for the Homeless, Inc., Miami
National Alliance on Mental Illness (NAMI) & Depression and Bipolar 
Support Alliance, Lakeland
National Council of Jewish Woman Miami, Miami
National Council of Jewish Women Aventura, Aventura
National Council of Jewish Women Greater Miami Section, Miami
National Council of Jewish Women Hollywood, Hollywood
National Council of Jewish Women Southeast Atlantic Section, Boca Raton
Neighborly Care Network, Inc., Clearwater
North Florida Educational Development Corporation, Gretna
Northwest Florida AIDS/HIV Consortium (NOFLAC), Brent
Planned Parenthood of South Florida and the Treasure Coast, West Palm 
Beach
Positive Champions Speakers Bureau, Daytona Beach
Positively U, Inc., Davenport
Rural Neighborhoods, Inc., Homestead
Sanford Housing Authority Agency-Wide Resident Council, Sarasota
South Florida Community Development Coalition, Miami
St. Johns County Council on Aging, St. Augustine
St. Johns River Alliance, Jacksonville Beach
Sugarloaf Women's Land Trust, Sugarloaf Key
Suncoast Partnership to End Homelessness, Sarasota
Tampa Housing Authority, Tampa
The Florida Housing Coalition, Tallahassee
The Good Shepherd of North East Florida, Inc., Lake City
The Mental Health Association of Okaloosa/Walton Counties, Fort Walton 
Beach
United Faculty of Florida, Tallahassee
Georgia
AID Gwinnett/Ric Crawford Clinic, Duluth
Armstrong Atlantic State University (AASU), Savannah
Augusta Housing Authority, Augusta
BAIN, Inc. Center for Independent Living, Bainbridge
Camden County Schools, Kingsland
Center for Leadership in Disability, Atlanta
DEW Consultants, Inc., Roswell
Douglas County Homeless Shelter, Douglasville
East Point Housing Authority, East Point
Epilepsy Foundation of Georgia, Atlanta
Families First, Inc., Atlanta
Family Visions Outreach, Inc., Sylvester
G-CASE, McDonough
Georgia Alliance to End Homelessness, Marietta
Georgia Association of Secondary School Principals, Thomasville
Georgia Council of Administrators for Special Education, McDonough
Georgia Parent Support Network, Inc., Atlanta
Georgia School Counselors Association, Marietta
Georgia State University Center for Leadership in Disability, Atlanta
Georgia Supportive Housing Association, Atlanta
Grady Health System, Atlanta
Here's to Life, Inc., Decatur
HOPE Atlanta Programs of Travelers Aid, Atlanta
Housing Authority of DeKalb County, Decatur
Liberty County Board of Education, Hinesville
Liberty County Public School System, Hinesville
Long County School District, Ludowici
Lou Walker Senior Center, Lithonia
Northwest Georgia Federation of Families, Rome
Peak Performance Learning, L.L.C., Atlanta
Sexual Assault Support Center, Inc., Columbus
SisterLove, Inc., Atlanta
Sisters of Mercy, Macon
South Fulton Senior Services, College Park
STEM, Inc., Covington
The Cottage, Sexual Assault Center & Children's Advocacy Center, Athens
Urban Residential Development Corporation, Atlanta
Briarcliff Oaks, Atlanta
Guam
University of Guam Center for Excellence in Developmental Disabilities 
(UCEDD), Mangilao
  
Hawaii
Community Alliance for Mental Health, Honolulu
Good Beginnings Alliance, Honolulu
Hawaii Association of Secondary School Administrators, Honolulu
Hawaii Association of School Librarians, Honolulu
Hawaii County Economic Opportunity Council, Hilo
Hawaii Disability Rights Center, Honolulu
Hawaii County Economic Opportunity Council, Hilo
Hawaii Policy Advisory Board for Elder Affairs, Honolulu
Hawaii State Council on Developmental Disabilities, Honolulu
Hawaii State Department of Education, Honolulu
Hawaii State Office of Youth Services, Honolulu
Hawaii State Teachers Association, Honolulu
Lanakila Pacific, Honolulu
Learning Disabilities Association of Hawaii, Honolulu
YWCA of Kauai, Lihue
Idaho
Aberdeen Education Association, Aberdeen
Blackfoot School District No. 55, Blackfoot
Boise State University, Boise
Buhl Education Association, Buhl
Cambridge-Midvale Senior Citizens Center, Cambridge
Cassia County Education Association, Burley
Castleford School District, Castleford
Challis Education Association, Challis
Coeur d'Alene Education Association, Coeur d'Alene
Family Crisis Center, Rexburg
Filer Education Organization, Filer
Gem County Education Association, Emmett
Idaho Association of School Administrators, Boise
Idaho CASE, Boise
Idaho Council for Exceptional Children, Boise
Idaho Council on Developmental Disabilities, Boise
Idaho Education Association, Boise
Idaho Education Association, Coeur d'Alene
Idaho Education Association, Post Falls
Idaho Federation of Families for Children's Mental Health, Boise
Kimberly Education Association, Kimberly
Lakeland Education Association, Rathdrum
Meadows Valley Education Association, New Meadows
Minidoka County Education Association, Rupert
Plummer-Worley Jt School District #44, Plummer
Post Falls Educational Association, Post Falls
Richfield IEA, Richfield
Rimrock Senior Center, Grand View
Ririe Education Association, Ririe
Rockland Education Association, Rockland
Teton Education Association, Felt
The New Meadows Senior Center, New Meadows
Twin Falls Education Association, Twin Falls
Twin Falls School District, Twin Falls
Valley Meals on Wheels, Lewiston
West Ridge Elementary, Post Falls
Illinois
ACTE, SpringfieldAging Care Connections, La Grange
AIDS Foundation of Chicago, Chicago
AIDS Legal Council of Chicago, Chicago
Alexian Brothers AIDS Ministry, Chicago
Burr Ridge Community Consolidated School District #180, Burr Ridge
Calumet Area Industrial Commission, Chicago
Campaign for Better Health Care, Illinois, Champaign and Chicago
Canticle Ministries, Wheaton
Career Link, Bloomington
Casa Central, Chicago
Cass School District #63, Darien
Central Illinois Friends of People with AIDS, Peoria
Chicago Jobs Council, Chicago
Chicago Rehab Network, Chicago
Chicago Workforce Investment Council, Chicago
Children's Home and Aid, Chicago
United Workforce Development Board, Pekin
Citizen Schools Illinois, Chicago
City of Chicago Department of Family & Support Services, Chicago
City of Kankakee Community Development Agency, Kankakee
CJE SeniorLife Home Delivered Meals Program, Chicago
Coalition for Equitable Community Development, Chicago
Community Behavioral Healthcare Association of Illinois, Springfield
Community Outreach Intervention Projects, SPH, UIC, Chicago
Connect 2 Protect Chicago, Chicago
Connections for Abused Women and their Children, Chicago
Cook County GED Testing Program, Chicago
Department of Human Services, Woodstock
DuPage Senior Citizens Council, DuPage County
DuPage Workforce Board, Lisle
East Central Illinois Area Agency on Aging, Bloomington
Educational Support for Students in Temporary Living Situations (STLS), 
Chicago
Egyptian Mental Health Department, Eldorado
FED ED, Northbrook
Goldie's Place, Chicago
Haymarket Center, Chicago
Heartland Alliance for Human Needs & Human Rights, Chicago
Housing Action Illinois, Chicago
Housing Authority of the County of DeKalb, DeKalb
Human Resources Development Institute, Inc., Chicago
IACEA: The Voice of Adult Education in Illinois, Crystal Lake
Illinois Association for College Admission Counseling, Mt. Prospect
Illinois Association of Career Tech Educators, Rockford
Illinois Association of Educational Opportunity Program Personnel, 
Chicago
Illinois Community College Board Adult Education and Family Literacy 
Program, Springfield
Illinois Eastern Community Colleges, Mattoon
Illinois Lead Program, Springfield
Illinois Maternal and Child Health Coalition, Chicago
Illinois Migrant Council, Harvard
Illinois Principals Association, Springfield
Illinois School Counselor Association, DeKalb
Illinois School Counselors Association, Chicago
Illinois School Library Media Association, Canton
Institute on Disability and Human Development, Chicago
Interfaith Open Communities, Chicago
Jewish Council on Urban Affairs, Chicago
Lake County Center for Independent Living, Mundelein
Lake County Workforce Investment Board, Waukegan
Learning Disabilities Association of Illinois, Chicago
Lifescape Community Services, Inc., Rockford
Living Daylight Corporation, Elgin
Local Initiatives Support Corporation Chicago, Chicago
Local Initiatives Support Corporation Peoria, Peoria
Management, Training, and Consulting, Corp., Marion
Mary Crane League, Chicago
Mascoutah Community Unit School District #19, Mascoutah
Mascoutah Senior Services Program, Mascoutah
McHenry County Workforce Investment Board, Woodstock
McHenry County Workforce Network, Woodstock
National Council of Jewish Women, Illinois State Policy Advocacy 
Committee, Chicago
New Foundation Center, Northfield
Oak Park Coalition for Truth and Justice, Oak Park
Open Door Clinic, Elgin
Ounce of Prevention Fund, Chicago
Pediatric AIDS Chicago Prevention Initiative, Chicago
Prairie Center Agianst Sexual Assault, Springfield
RAMP Center for Independent Living, Rockford
Randolph County Health Department, Chester
Regional CARE Association, Joliet
Rock Island County Health Department, Rock Island
Rock River Training Corporation, Rockford
Safe Kids Adams County, Quincy
SIL Radon Awareness Task Force, Inc., Mt Vernon
Southside Solidarity Network, Chicago
St. Catherine Laboure Parish, Glenview
St. Joan of Arc Social Justice & Peace, Lisle
Stroger Hospital of Cook County, Chicago
Supportive Housing Providers Association of Illinois, Springfield
Test Positive Aware Network, Publisher of Positively Aware Magazine, 
Chicago
The Children's Place Association, Chicago
The Safer Foundation, Chicago
Trinity Resources Unlimited, Inc., Chicago
University of Illinois, Urbana
Vermilion County Job Training Partnership, Danville
West Suburban Jobs Council, Wheaton
Western Illinois Area Agency on Aging, Rock Island
Wheaton Franciscans, Wheaton
YWCA of the Sauk Valley, Sterling
Heartland Alliance, Chicago
Illinois Alliance of Administrators of Special Education, Lebanon
Illinois School Counseling Association, Chicago
Illinois School Psychologist's Association, Chicago
Interfaith House, Chicago
Mary Crane Center--Head Start, Chicago
Minority AIDS Awareness Council (MAAC), Peoria
People for Community Recovery, Chicago
Senior Services Plus, Alton
St. Vincent de Paul Center, Chicago
University of Illinois, Chicago
YWCA Metropolitan Chicago, Chicago
Indiana
Area IV Head Start, Frankfort
Association of Indiana School Library Educators, Indianapolis
ATTIC, Inc., Vincennes
Brown County Schools, Nashville
Community Action of Northeast Indiana, Inc. (CANI) Head Start and Early 
Head Start, Fort Wayne
Fulton County Health Department, Rochester
Housing Authority City of Richmond, Richmond
Housing Authority of South Bend, South Bend
ICASE, Madison
Indiana Association of Area Agencies on Aging, Indianapolis
Indiana Association of School PrIncipals, Indianapolis
Indiana Council of Community Mental Health Centers, Inc., Indianapolis
Indiana Council of Special Education Administrators, Indianapolis
Indiana Institute for Working Families, Indianapolis
Indiana School Counselor Association, Lafayette
Indiana School Social Work Association, Mooresville
Indiana State AFL-CIO Labor Institute for Training, Inc., Indianapolis
Indiana State Teachers Association, Indianapolis
INFBPW/Merrillville-Duneland, Schererville
Kokomo Area Special Education Cooperative, Russiaville
Local Initiatives Support Corporation Indianapolis, Indianapolis
Logansport Area Joint Special Services Cooperative, Logansport
Madison County JobSource, Anderson
Mental Health America in Cass County, Logansport
Middle Way House, Inc., Bloomington
Midwest Center for Youth and Families, Valparaiso
Northwest Indiana Special Education Cooperative, Crown Point
Porter-Starke Services, Inc., Valparaiso
The Riley Child Development Center, Riley Hospital for Children, 
Indianapolis
Training, Inc., Indianapolis
YWCA North Central Indiana, South Bend
  
Iowa
Black Hawk-Grundy Mental Health Center, Inc., Waterloo
Chickasaw County Public Health and Home Care Services, New Hampton
Child and Family Policy Center, Des Moines
Community Health Partners of Sioux County, Orange City
Crisis Intervention Services, Oskaloosa
Disability Rights Iowa, Des Moines
Dubuque Franciscan Sisters, Dubuque
Heritage Area Agency on Aging, Cedar Rapids
Iowa Association for College Admission Counseling, Newton
Iowa Association of Community Providers, Urbandale
Iowa Coalition 4 Juvenile Justice, Des Moines
Iowa Comprehensive Human Services, Des Moines
Iowa Council of Administrators of Special Education I-CASE, Des Moines
Iowa Federation of Families for Children's Mental Health, Anamosa
Iowa School Counselor Association, Des Moines
Iowa School Social Work Association, Des Moines
Jackson County Home and Community Health, Maquoketa
Kirkwood Community College, Cedar Rapids
Lincoln Mental Health, Fort Dodge
Lutheran Services in Iowa, Des Moines
Monona County Public Health, Onawa
North Fayette High School, West Union
PITCH, Milford
Positive Iowans Taking Charge, Des Moines
Siouxland Community Health Center, Sioux City
Siouxland District Health Department, Sioux City
Sisters of the Presentation, Dubuque
State Public Policy Group Inc., Des Moines
The Culture Buzz, Des Moines
Tri-County Child and Family Development Council, Inc., Waterloo
United Way of Central Iowa, Des Moines
Waubonsie Mental Health Center, Clarinda
Kansas
Aging Projects, Inc., Hutchinson
Butler County Health Department, El Dorado
Center for Child Health and Development, Kansas City
Clinical Psychologist, Iola
COMCARE, Wichita
Derby Public Schools #260, Derby
ECKAN, Ottawa
Geary County Unified School District #475, Junction City
Great Plains Association for College Admission Counseling, Overland 
Park
HOMESTEAD Nutrition Project, Hays
Independent Living Resource Center, Wichita
Johnson County Area Agency on Aging, Olathe
Johnson County Department of Health & Environment, Olathe
Kaman Composites--Wichita, Inc., Wichita
Kansas Adult Education Association, Paola
Kansas Association of School Librarians, Larned
Kansas Association of Secondary School Principals, Halstead
Kansas Head Start Association, Lawrence
Kansas National Education Association, Topeka
Kansas Occupational Therapy Association, Topeka
Kansas School Counselor Association, Clay Center
Kansas School Social Work Association, Wichita
Kansas University Center on Developmental Disabilities, Lawrence
Kanza Mental Health and Guidance Center, Inc., Hiawatha
Meals on Wheels Association of Kansas, Ottawa
Mid-America Nutrition Program, Inc., Ottawa
Missouri Valley Adult Education Association, Paola
Newton Housing Authority, Newton
Olathe National Education Association, Olathe
Parsons Housing Authority, Parsons
Prairie Independent Living Resource Center, Inc., Hutchinson
Senior Services of Southeast Kansas, Inc., Coffeyville
SKIL Resource Center, Parsons
Statewide Independent Living Council of Kansas, Topeka
Southwest Boulevard Family Health Care, Kansas City
Three Rivers Independent Living, Inc., Wamego
Kentucky
Appalbanc, Inc., Berea
Ashland County Community and Technical College/Boyd County Adult 
Education, Ashland
Audubon Area Community Services, Inc., Owensboro
Beattyville Housing & Development Corporation, Inc., Beattyville
Central Kentucky Community Action Council, Inc., Lebanon
Central Kentucky Community Action Head Start, Lebanon
Central Kentucky Housing & Homeless Initiative, Lexington
Christian County Health Department, Hopkinsville
Commonwealth Council on Developmental Disabilities, Frankfort
Cumberland Valley Housing Authority, Williamsburg
Florence Crittenton Home & Services, Inc., Lexington
Floyd County Health Department, Prestonsburg
Hardin County Adult Education, Elizabethtown
Head Start, Paducah
Kentucky Association for Career and Technical Education, Frankfort
Kentucky Association of School Business Officials
Kentucky Communities Economic Opportunity Council, Corbin
Kentucky Council of Administrators of Special Education, Lexington
Kentucky Domestic Violence Association, Frankfort
Kentucky School Media Association, Frankfort
Kentucky Youth Advocates, Louisville
KY HANDS Home Visitation Program, Kentucky Department for Public 
Health, Frankfort
Louisville Peace Action Community, Louisville
Louisville-Metro Senior Nutrition Program, Louisville
Matthew 25 AIDS Services, Henderson
Mountain Association for Community Economic Development, Berea
New Beginnings Sexual Assault Support Services, Owensboro
Pathways, Inc., Ashland
People's Self-Help Housing, Inc., Vanceburg
Senior Services of Northern Kentucky, Covington
SeniorCare Experts, Louisville
The Catalytic Fund, Covington
The Kentucky Association for Psychology in the Schools, Mount 
Washington
The Pulaski Adult Learning Center, Somerset
Todd County Adult Education, Elkton
University of Kentucky, Lexington
West Kentucky Allied Services, Inc., Mayfield
Western Kentucky University Department of Family and Consumer Sciences, 
Bowling Green
Louisiana
A Community Voice--Louisiana, New Orleans
Advocacy Center, New Orleans
Brand New Attitude, New Orleans
Greater New Orleans Fair Housing Action Center, New Orleans
Gulf Area Training Enterprises, L.L.C., New Orleans
Innocence Project New Orleans, New Orleans
Louisiana Association of Educators, Baton Rouge
Louisiana Association of Principals, Winnfield
Louisiana Federation of Families for Children's Mental Health, Inc., 
Baton Rouge
Louisiana Housing Alliance, Baton Rouge
Louisiana Lung Cancer Partnership, Lake Charles
Louisiana State University Health Sciences Center-Human Development 
Center, New Orleans
N'R PEACE, Inc., Gretna
Southwest Louisiana AIDS Council, Lake Charles
Southwest Louisiana Independence Center, Lake Charles
Tulane University, New Orleans
Maine
Center for Community Inclusion and Disability Studies, Orono
Coastal Enterprises, Inc. (CEI), Wiscasset
Community Housing of Maine, Portland
CWS Architects, Portland
Graham Behavioral Services, Inc., Augusta
Maine Association of School Psychology, Kennebunk
Maine Education Association, Augusta
Maine Children's Alliance, Augusta
Maine Marine Trades Association, Biddeford
Maine People's Alliance, South Portland
New England Association for College Admission Counseling, Kittery
New England Consortium Poverty Reduction Initiative, South Portland
New Hampshire Educational Opportunity Association, Eliot
New Hampshire Leadership Education in Neurodevelopmental and Related 
Disabilities (NH-LEND), Durham
Opportunity Maine, Portland
Portland Housing Authority, Portland
The Horizon Program, Augusta
The Maine Association for Mental Health Services, Augusta
The Maine Association of Substance Abuse Programs, Augusta
TRiO at Plymouth State University, Durham
Maryland
Advocacy and Training Center, Cumberland
Advocates for Children and Youth, Baltimore
Allegany County Teachers' Association, Cumberland
Anne Arundel County Community Action Agency, Annapolis
Baltimore Black Pride, Inc., Baltimore
Baltimore County Association of Senior Citizens Organizations (BCASCO), 
Baltimore County
Baltimore County Public Schools--Education Support Professionals of 
Baltimore County, Baltimore
Baltimore County Public Schools (BCPS), Nottingham
Baltimore Workforce Investment Board, Baltimore
Calvert Association of Supervisors and Administrators, Prince Frederick
Cecil County Classroom Teachers Association (CCCTA), Elkton
Cecil County Public Schools, Conowingo
Channel Marker, Inc., Easton
Community Behavioral Health Association of Maryland, Catonsville
Education Association of St. Mary's County, California
Education Support Professionals of Baltimore County (ESPBC), Baltimore
Elkton Housing Authority, Elkton
Empire Homes of Maryland, Inc., Baltimore
Frederick Association of School Support Employees, Mount Airy
Frederick County Teachers Association, Frederick
Fund Our Communities, Kensington
Garrett County Community Action Committee, Oakland
Goodwill Industries International, Rockville
Head Start of Washington County, Hagerstown
IEC Chesapeake, Odenton
Ivory House Health Services, Lutherville
Kennedy Krieger Institute, Baltimore
Legal Aid Bureau, Inc., Baltimore
LifeLinc of Maryland, Baltimore
Maryland Association of Secondary School Principals, Ellicott City
Maryland Campus Compact, Emmitsburg
Maryland Department of Labor, Licensing, and Regulation, Division of 
Workforce Development and Adult Learning, Baltimore
Maryland Disability Law Center, Baltimore
Maryland State Education Association, Annapolis
Maryland United for Peace & Justice, Bowie
Maryland Rural Development Corporation and MRDC Head Start, Annapolis
Montgomery County Education Association, Rockville
Montgomery Housing Partnership, Silver Spring
National Alliance on Mental Illness (NAMI), Maryland, Columbia
National Council of Jewish Women Howard County, MD. Section, Columbia, 
Ellicott City, Clarksville
Peace Action Montgomery, Brookeville
PeterCares House, Greenbelt
Potomac Association of Housing Cooperative, Baltimore
Prince George's County Educators' Association, Forestville
Progressive Cheverly, Cheverly
Public Justice Center, Baltimore
Reservoir Hill Mutual Homes, Inc., Baltimore
Simon Publications, Bethesda
St. Bernardine's Head Start, Baltimore
The Alliance for Integrative Health Care, Baltimore
The Beacon Newspapers, Silver Spring
The Freedom Center, Frederick
University of Maryland School of Medicine, Baltimore
Upper Bay Counseling & Support Services, Elkton
Vehicles for Change, Baltimore
Veterans For Peace--Washington, DC--Area Chapter, Rockville
Volunteers of America Chesapeake, Inc., Lanham
Xaverian Brothers, Baltimore
YWCA Greater Baltimore, Baltimore
Massachusetts
AIDS Action Committee of Massachusetts, Boston
AIDS Project Worcester, Worcester
Alliance of Cambridge Tenants (ACT), Cambridge
Amory Street Associates, Waltham
Association for Behavioral Healthcare, Natick
Asthma and Allergy Foundation of America, New England Chapter, Needham
Barnstable County HOME Consortium, Barnstable
Bedford Youth & Family Services, Bedford
Behind Locked Doors, Newton
Bellingham Housing Authority, Bellingham
Boston Health Care for the Homeless Program, Boston
Boston Public Health Commission, Boston
Brigham and Women's Hospital, Boston
Cambridge Economic Opportunity Committee, Inc., Cambridge
Cambridge Neighborhood Apartment Housing Services, Cambridge
Cape Cod Children's Place, North Eastham
Career Center Initiative Board, Partnership for A Skilled Workforce, 
Waltham
CareerPOINT Career Center, Chicopee
CASPAR Inc., Cambridge & Somerville
Child Tools Consulting, Fitchburg
Citizen Schools Massachusetts, Boston
Citizens' Housing and Planning Association (CHAPA), Boston
Conservation Law Foundation, Boston
Disability Law Center, Massachusetts, Boston
Epilepsy Foundation of Massachusetts, Rhode Island, New Hampshire, and 
Maine, Inc., Boston
Family Promise Metrowest, Natick
Harbor Health Services, Inc., Boston
Heaven In View Outreach Ministry, Inc., Springfield
Homeowners Rehab, Inc., Cambridge
Housing Corporation of Arlington, Arlington
Immigrant Service Providers Group/Health, Somerville
Independence Associates, Inc., Center for Independent Living, Brockton
Jewish Vocational Service: Boston, Boston
Local 201 IUE/CWA, Greenfield
Local Initiatives Support Corporation Boston, Boston
Massachusetts Advocates Standing Strong, Boston
Massachusetts Association of School Business Officials, Chelmsford
Massachusetts Families Organizing for Change (MFOFC), Raynham
Massachusetts Law Reform Institute, Boston
Massachusetts Music Educators Association, Inc., South Attleboro
Massachusetts Neuropsychological Society, Boston
Massachusetts Organization for Addiction Recovery, Boston
Massachusetts School Counselors Association, Boston
Massachusetts School Psychologists Association (MSPA), Boston
Massachusetts Secondary School Administrators' Association, Franklin
Massachusetts Teachers Association, Boston
Massachusetts Vocational Association, East Freetown
Massachusetts General Hospital, Boston
McLean Hospital, Belmont
Museum of Science, Boston
National Alliance on Mental Illness (NAMI) Cape Ann, Inc., Gloucester
Natick Housing Authority, Natick
National Association of Social Workers, Dorchester
New England Innocence Project, Boston
Northeast Counselors Association, Groveland
One Family, Inc., Boston
PACE, Inc. Housing Services, New Bedford
Partners HealthCare, Boston
Partnerships for a Skilled Workforce, Inc., Marlborough
Pine Street Inn, Boston
Pioneer Valley Planning Commission, Springfield
RCAP Solutions, Inc., Worcester/Gardner
SkillWorks, Brookline
Somerville Homeless Coalition, Somerville
South Middlesex Opportunity Council, Inc., Framingham
South Shore Mental Health, Quincy
Spaulding Rehabilitation Hospital, Boston
Technology for Memory and Organization, Walpole
TenHoor and Associates, Duxbury
The Caleb Group, Swampscott
The Massachusetts Administrators for Special Education (ASE), Cambridge
Tohn Environmental Strategies, Wayland
Training, Inc., Boston
TRI-City Community Action Program, Malden
Tri-Valley, Inc., Dudley
Wayside Youth & Family Support Network, Framingham
Woods Hole Oceanographic Institution, Woods Hole
Woods Hole Research Center, Falmouth
Michigan
A2FACES: Ann Arbor Families for Autistic Children, Ann Arbor
Advocacy Services for Kids, Kalamazoo
American Cancer Society, East Lansing
American Federation of School Administrators (AFSA)--Michigan, Detroit
Ann Arbor Public Schools, Ann Arbor
Area Agency on Aging 1-B, Southfield
Association for Children's Mental Health, Lansing
Center for Civil Justice, Saginaw
Communities Overcoming Violent Encounters, Ludington
Community Economic Development Association of Michigan (CEDAM), Lansing
Developmental Disabilities Institute, Detroit
Dial Help Community Support and Outreach Center, Houghton
Disruptive Innovations for Social Change, Grand Rapids
Educational Talent Search, Alpena
Epilepsy Foundation of Michigan, Southfield
Ferris State University College of Pharmacy, Big Rapids
Flint Strive, Flint
Focus: HOPE, Detroit
Hand Up, Inc. Nonprofit Organization, Romulus
Holy Innocents Episcopal Church, Little Lake
Jackson Area Manufacturers Association, Jackson
Jewish Labor Committee--Michigan Region, Detroit
Kent Regional Community Coordinated Child Care, Grand Rapids
Keppen Elementary School, LIncoln Park
Learning Disabilities Association of Michigan, Lansing
Leland Public School, Leland
Levin Energy Partners, LLC, Bloomfield Hills
LifeWays, Jackson
Local Initiatives Support Corporation Detroit, Detroit
Local Initiatives Support Corporation Michigan Statewide, Kalamazoo
Matrix Human Services, Detroit
Michigan Alliance of Cooperatives, Blanchard
Michigan Association for College Admission Counseling, East Lansing
Michigan Association for Health, Physical Education, Recreation and 
Dance, Lansing
Michigan Association of Administrators of Special Education (MAASE), 
Holland
Michigan Association of Secondary School Principals, Lansing
Michigan College Access Programs and Personnel, Marquette
Michigan Community Action Agency Association, Okemos
Michigan Community Service Commission, Lansing
Michigan Disability Rights Coalition, East Lansing
Michigan League for Public Policy, Lansing
Michigan Music Education Association, Jackson
Michigan Protection and Advocacy Services, Lansing
Michigan School Counselor Association, Grand Rapids
Michigan's Children, Lansing
Morley Stanwood Community Schools, Morley
Mott Community College Workforce Development, Flint
Northwest Michigan Community Action Agency, Traverse City
Organization of School Administrators and Supervisors (OSAS) Local 28--
American Federation of School Administrators 9AFSA, Detroit
Ottawa County Great Start Collaborative, Holland
Ottawa County Great Start Parent Coalition, Allendale
Paw Paw Housing Commission, Paw Paw
Provider Alliance of the Michigan Association of Community Mental 
Health Boards, Lansing
Saginaw County Youth Protection Council, Saginaw
Sault Area Public Schools, Sault Ste. Marie
Save Michigan Seniors, Kalamazoo
Senior Nutrition Services, Region IV, Benton Harbor
Shiawassee Regional Education Service District, Corunna
South Central Michigan Works!, Hillsdale
Southeast Michigan Census Council, Southfield
Southwest Counseling Solutions, Detroit
Superior AIDS Prevention Services, Iron Mountain
Temple B'nai Israel, Petoskey
The Arc Michigan, Lansing
Walker Firehouse Cafe/Senior Neighbors, Grand Rapids, Michigan
Watersmeet Township School District, Watersmeet
Wisdom Institute, Detroit
YWCA of Greater Flint, Flint
Minnesota
A Minnesota Without Poverty, Minneapolis
Bois Forte Tribal Government, Nett Lake
Children's Defense Fund--Minnesota, St. Paul
CROSS Meals on Wheels, Rogers
Deer River Public School District, Deer River
Education Minnesota, St. Paul
Entrepreneur Fund, Duluth
Family Life Mental Health Center, Coon Rapids
Family Service Rochester, Rochester
Hamline University, St. Paul
Houston County Public Health Department, Caledonia
Hunger Solutions Minnesota, St. Paul
Hutchinson Housing & Redevelopment Authority, Hutchinson
Innocence Project of Minnesota, St. Paul
Integrated Community Solutions, Inc., Fridley
JM Grants, Sartell
Litchfield Public Schools Early Childhood Programs, Litchfield
Little Falls Partners for Peace, Little Falls
Local Initiatives Support Corporation Duluth, Duluth
Local Initiatives Support Corporation Twin Cities, St. Paul
Local Public Health Association of Minnesota, St. Paul
McLeod County Public Health, Glencoe
Minnesota Association for Career and Technical Education, Fergus Falls
Minnesota Association for College Admission Counseling, Northfield
Minnesota Association of Secondary School Principals, St. Paul
Minnesota Head Start Association, Inc., Duluth
Minnesota Housing Partnership, St. Paul
Minnesota Indian Women's Resource Center, Minneapolis
Minnesota Occupational Therapy Association (MOTA), St. Paul
Minnesota School Psychologists Association, Winona
Minnesota School Social Workers Association, Gibbon
Minnesota State Colleges and Universities (MnSCU), White Bear Lake
Minnesota Workforce Council Association, Saint Paul
National Alliance on Mental Illness (NAMI) Minnesota, St. Paul
Naytahwaush Community Charter School, Naytahwaush
Nett Lake School District, Nett Lake
Positive Care Center at Hennepin County Medical Center, Minneapolis
Religious Community of Women, Little Falls
Southeast Minnesota Workforce Board, Rochester
The Metropolitan Consortium of Community Developers, Minneapolis
Waubun-Ogema-White Earth Public Schools, Waubun
Workforce Development, Inc., Southeast
YWCA Minneapolis, Minneapolis
Mississippi
Biloxi Branch NAACP, Biloxi
Disability Rights Mississippi, Jackson
Faye's Playhouse & Learning Center, Verona
Local Initiatives Support Corporation Mid South Delta, Greenville
Mississippi Association of Educational Opportunity Program Personnel, 
Jackson
Mississippi Association for Health, Physical Education, Recreation and 
Dance, Olive Branch
Mississippi Association of Secondary School Principals, Columbia
Mississippi Council of Administrators of Special Education (MS CASE), 
Mendenhall
Mississippi Families as Allies, Jackson
Mississippi Innocence Project, Oxford
Nollie Jenkins Family Center, Inc., Lexington
Pontotoc Housing Authority, Pontotoc
Public Policy Center of Mississippi, Jackson
Missouri
Advance National Education Association, Advance
Bayless Education Association, St. Louis
Blue Springs National Education Association, Blue Springs
Bridgeway Women's Center, St. Charles
Caruthers Street Charities, Inc. dba Project HOPE, Cape Girardeau
Central Missouri Community Action (CMCA) Head Start, Columbia
Central Missouri Community Action- Head Start, Laddonia
Dent County Health Center, Salem
Disabled Citizens Alliance for Independence, Viburnum
Epilepsy Foundation of Missouri and Kansas, Kansas City
Farmington National Education Association, Farmington
Ferguson-Florissant National Education Association, Ferguson
Festus Housing Authority, Festus
Head Start, Salem
Independence Housing Authority, Independence
Independence National Education Association, Independence
Jefferson County Health Department, Hillsboro
Jefferson Franklin Community Action Corporation, Hillsboro
Joplin Adult Education and Literacy, Joplin
Kaiden's Voice for the Abused, Springfield
Kansas City Adult Education & Literacy, Kansas City
Kansas City Criminal Justice Task Force, Kansas City
Kansas City Missouri School District Adult Education and Literacy, 
Kansas City
Knob Noster R-VIII School District, Knob Noster
Lindbergh National Education Association, St. Louis
Local Initiatives Support Corporation Greater Kansas City, Kansas City
Lutheran Family & Children's Services of Missouri, St. Louis
Mississippi County Health Department, Charleston
Missouri Adult Education & Literacy Administrators Association, 
Jefferson City
Missouri Association for Career and Technical Education, Jefferson City
Missouri Association for Social Welfare, Jefferson City
Missouri Association of Local Public Health Agencies, Jefferson City
Missouri Association of School Business Officials, Jefferson City
Missouri Association of Secondary School Principals, Columbia
Missouri Council for Exceptional Children (MO-CEC), Blue Springs
Missouri Council of Administrators of Special Education, Jefferson City
Missouri Development Disabilities Council, Jefferson City
Missouri Division of Workforce Development, St. Louis
Missouri National Education Association, Jefferson City
Missouri Public Health Association, Jefferson City
Missouri School Counselor Association, Jefferson City
National Alliance on Mental Illness (NAMI), St. Louis
National Council of Jewish Women, St. Louis Section, St. Louis
Normandy National Education Association, St. Louis
North East Community Action Corporation, Bowling Green
Ozarks Area Community Action Corporation, Springfield
Pettis County Health Center, Sedalia
Phelps/Maries County Health Department, Rolla
Second Harvest Community Food Bank, Saint Joseph
Senior Citizens Community Center, Paris
Training & Employment Administrators of Missouri (TEAM), Jefferson City
Shelby County Health Department, Shelbyville
Smithville R-II School District, Smithville
St. Francois County Health Center, Park Hills,
St. Louis Agency on Training and Employment (SLATE), St. Louis
St. Louis Lead Prevention Coalition, St. Louis
Starkloff Disability Institute, St. Louis
Taney County Health Department, Branson
Waynesville R-VI School District, Waynesville
Westside Community Action Network Center, Kansas City
Youth In Need, Inc., St. Charles
Montana
ADAPT Montana, Missoula
Arlee School District, Arlee
Association of Montana Public Health Officials, Helena
Billings Clinic, Billings
Box Elder Public School District 13G, Box Elder
Dixon School District #9, Dixon
Dodson Schools, Dodson
Eastern Montana Community Mental Health Center, Miles City
Family Support Network--Montana, Billings
Great Falls Housing Authority, Great Falls
Harlem Public Schools, Harlem
Helena Indian Alliance, Helena
Lodge Grass Public School District #2 & 27, Lodge Grass
MEA-MFT, Helena
Montana Aspire TRIO, Great Falls
Montana Association for Career and Technical Education, Worden
Montana Innocence Project, Missoula
Montana Public Health Association, Choteau
National Alliance on Mental Illness (NAMI), Helena
Not Dead Yet Montana, Missoula
Polson School District, Polson
Poplar School Districts 9 & 9B, Poplar
RiverStone Health, Billings
Ronan School District #30, Ronan
School Administrators of Montana, Helena
Teton County Health Department, Choteau
University of Montana Rural Institute: Center for Excellence in 
Disability Education, Research, and Service, Missoula
Nebraska
Creighton University, Omaha
Disability Rights Nebraska, Lincoln
Eastern Nebraska Community Action Partnership, Omaha
Head Start CFDP Inc., Hastings
Lutheran Metro Ministry, Omaha
Nebraska AIDS Project, Omaha
Nebraska Federation of Families for Children's Mental Health, Minden
Nebraska Head Start Association, Hastings
Nebraska School Librarians Association, Lincoln
Nebraska State Education Association, Lincoln
Progressive Research Institute of Nebraska, Omaha
Santee Sioux Nation Head Start, Niobrara
Sisters of Mercy West Midwest Justice Team, Omaha
Somali Community Service, Inc., Omaha
University of Nebraska Medical Center, Omaha
Western Nebraska Resources Council, Chadron
Association of Career and Technical Education of Nebraska, Lincoln
Nevada
Catholic Charities of Southern Nevada, Las Vegas
Churchill County School District, Fallon
Food Bank of Northern Nevada, Reno
Golden Rainbow, Las Vegas
Inter-Tribal Council of Nevada, Inc., Reno
Nevada Adult Educators, Las Vegas
Nevada Association of School Administrators, Pahrump
Nevada Occupational Therapy Association, Las Vegas
Nevada School Counselor Association (NvSCA), Reno, Las Vegas
Reno Senior Citizens Advisory Committee, Reno
Washoe County (Nevada) Department of Senior Services, Reno
New Hampshire
Center For Life Management, Derry
Children's Alliance of New Hampshire, Concord
Greater Nashua Mental Health Center at Community Council, Nashua
Housing Action New Hampshire, Concord
Local 119, Exeter
Nashua Soup Kitchen & Shelter, Inc., Nashua
New Hampshire Association of School Principals, Concord
New Hampshire Association of Special Education Administrators, Concord
New Hampshire School Library Media Association, Laconia
New Hampshire School Library Media Association (NHSLMA), Exeter
Rockingham Nutrition and Meals on Wheels Program, Brentwood
The New Hampshire Occupational Therapy Association, Concord
University of New Hampshire, Durham
New Jersey
Abundant Life Community Development Corporation, Edgewater Park
Advocates for Children of New Jersey, Newark
Alternatives to Domestic Violence, Hackensack
Atlantic Cape Family Support Organization, Northfield
Bergen County Youth Services Commission, Hackensack
Burlington County Workforce Investment Board, Mount Holly
Camden County Family Support Organization, Merchantville
Cape May City Elementary School, Cape May
Career and Technical Education Association of New Jersey, Pemberton
Cathedral Soup Kitchen, Inc., Camden
Catholic Charities Diocese of Trenton, Trenton
Children's Aid and Family Services, South Orange
Citizen Schools New Jersey, Newark
Community FoodBank of New Jersey, Hillside
COPE Center, Inc., Montclair
Cumberland/Salem Workforce Investment Board, Bridgeton
Englewood Housing Authority, Englewood
Family Support Organization of Bergen County, Waldwick
Family Support Organization of Bergen County, Fair Lawn
Food Bank of South Jersey, Pennsauken
Garden State Employment & Training Association, Toms River
Head Start Community Program of Morris County, Inc., Dover
Homefront, Inc., Lawrenceville
Horizon Health Center, Jersey City, Bayonne
Housing Community Development Network of New Jersey, Trenton
Hudson County Housing Resource Center, Jersey City
Hyacinth AIDS Foundation, New Brunswick
JCDTOC, Inc., Cape May Court House
Kean University, Union
LEW Corporation, Mountainside
Local Initiatives Support Corporation Greater Newark, Newark
Meals On Wheels, Inc.--Linden, Linden
Monmouth County Regional Health Commission, Tinton Falls
Morris-Sussex-Warren Workforce Investment Board, Morristown
Mount Carmel Guild, Cranford
National Alliance on Mental Illness (NAMI), Asbury Park
National Alliance on Mental Illness (NAMI), Cherry Hill
National Alliance on Mental Illness (NAMI), Gloucester County, Wenonah
National Alliance on Mental Illness (NAMI), Greater Monmouth, Freehold
National Council of Jewish Women, Concordia Section, Monroe Township
National Council of Jewish Women, Union County Section, Elizabeth
National Council of Jewish Women, West Morris Section, Morristown
New Jersey Anti-Hunger Coalition, Englewood
New Jersey Association for Health, Physical Education, Recreation & 
Dance, Ocean
New Jersey Association of Mental Health & Addiction Agencies, Inc., 
Mercerville
New Jersey Association of Mental Health and Addiction Agencies, Inc., 
Hamilton
New Jersey Association of Pupil Services Administrators, Westfield
New Jersey Campus Compact, Branchburg
New Jersey Citizen Action, Newark
New Jersey Principals and Supervisors Association, Monroe Township
North Hanover Township Schools, Wrightstown
Northern Ocean Habitat for Humanity, Toms River
Ocean County Workforce Investment Board, Toms River
Pleasantville Housing Authority, Pleasantville
Preferred Behavioral Health of New Jersey, Brick
Princeton Community Housing, Inc., Princeton
Project Live, Inc., Newark
Respond, Inc., Camden
Straight and Narrow Inc., Paterson
University of Medicine and Dentistry of New Jersey/University 
Behavioral HealthCare, Piscataway
Visiting Nurse Association of Central New Jersey (VNACNJ) Community 
Health Center, Inc., Asbury Park
New Mexico
Albuquerque Public Schools, Albuquerque
Citizen Schools New Mexico, Albuquerque
Clovis Municipal Schools, Clovis
Community Against Violence, Taos
Disability Rights New Mexico, Albuquerque
Five Sandoval Indian Pueblos, Inc. Head Start, Bernalillo
Gallup-McKinley County Schools, Ramah
Media Arts Collaborative Charter School, Albuquerque
National Education Association New Mexico, Santa Fe
National Education Association Santa Fe, Santa Fe
Native American Disability Law Center, Inc., Farmington
New Mexico Music Educators Association, Las Cruces
New Mexico Association of Secondary School Principals, Rio Rancho
New Mexico Coalition to End Homelessness, Albuquerque
New Mexico Council of Administrators of Special Education (NMCASE), 
Dexter
New Mexico Forum for Youth in Community, Albuquerque
New Mexico Occupational Therapy Association, Albuquerque
New Mexico School Counselor Association, Albuquerque
New Mexico State University, Las Cruces
New Mexico Voices for Children, Albuquerque
Prosperity Works, Albuquerque
Pueblo of Zuni Head Start, Zuni
Supportive Housing Coalition of New Mexico, Albuquerque
YES Housing Inc., Albuquerque
Youth Development, Inc., Albuquerque
National Education Association--Carlsbad, Carlsbad
New York
1199SEIU Training and Employment Funds, New York
Access to Independence of Cortland County, Inc., Cortland
Advocates for Children of New York, New York
Albert Einstein College of Medicine of Yeshiva University, New York 
City
Allegany County Office for the Aging, Belmont
APICHA Community Health Center, New York
Arbor Housing and Development, Bath
Arise, Inc., Syracuse
Boulevard Houses, Brooklyn
Brooklyn Chamber of Commerce, Brooklyn
Brooklyn for Peace, Brooklyn
Brooklyn Kindergarten Society, New York
Brooklyn-Queens National Organization for Women, Brooklyn
Buffalo Council of School Administrators, Buffalo
Campaign for Tomorrow's Workforce, New York
Caring for the Homeless of Peekskill, Peekskill
Cattaraugus County Department of the Aging, Olean
Cazenovia Recovery Systems, Inc., Buffalo
Center for Children's Initiatives, New York
Center for Independence of the Disabled, New York
Central New York Citizens in Action, Inc., Utica
Chenango County Area Agency on Aging, Norwich
Children's Defense Fund--New York, New York
Citizen Action of New York, Binghamton
Citizen Schools New York, New York
Citizens' Committee for Children of New York, New York
City of Syracuse Lead Program, Syracuse
Claire Heureuse Community Center, Inc., Jamaica
College and Community Fellowship, New York
Columbia County Office for the Aging, Hudson
Community Action Planning Council of Jefferson County, New York, 
Watertown
Communty Health Care Association of New York State, New York
Community Service Society of New York, New York
Cortland County Health Department, Cortland
Council of School Supervisors and Administrators (CSA), New York
Delaware County Office for the Aging, Delhi
Dunkirk-Fredonia Meals on Wheels, Dunkirk
Early Care & Learning Council, Albany
Empire Justice Center, Rochester
Epilepsy Foundation of Long Island, Garden City
Everyone Reading, New York
Fifth Avenue Committee, Brooklyn
Foodnet Meals on Wheels, Ithaca
Fort Greene Peace, Brooklyn
Fulton County Office for Aging, Johnstown
Fulton, Montgomery and Schoharie Counties Workforce Development Board, 
Inc., Amsterdam
Future Leaders Institute Charter School, New York
Human Development Services of Westchester, Mamaroneck
Hunger Solutions New York, Albany
Innersight, Islip
International Brotherhood of Electrical Workers--Local 43, Clay
Jackson Resident Association, Inc., Bronx
Joint Council for Economic Opportunity, Plattsburgh
Leake and Watts Services, Inc., Yonkers
Local Initiatives Support Corporation, Buffalo
Local Initiatives Support Corporation New York City, New York
Long Island Educational Opportunity Center, Brentwood
Madison County Office for the Aging, Inc., Canastota
Meals on Wheels of Syracuse, New York, Inc., Syracuse
Montefiore Medical Center, Bronx
National Alliance on Mental Illness--Buffalo & Erie County, 
Williamsville
National Alliance on Mental Illness--Cattaraugus, Olean
National Alliance on Mental Illness--Central Suffolk, Port Jefferson 
Station
National Alliance on Mental Illness--Huntington, Huntington
National Alliance on Mental Illness--LAMP/SW Nassau, Merrick
National Alliance on Mental Illness--New York City, Staten Island, 
Staten Island
National Alliance on Mental Illness--New York State, Albany
National Alliance on Mental Illness--Queens & Nassau, Manhasset
National Alliance on Mental Illness--Rensselaer County, West Sand Lake
National Alliance On Mental Illness--Rochester, Rochester
National Council of Jewish Women--Lakeville Section, Great Neck
Neighborhood Family Services Coalition, New York
Neighborhood Preservation Coalition of New York State, Albany
New Destiny Housing, New York
New York Annual Conference, United Methodist Church, Brooklyn
New York Association of School Psychologists, Albany
New York Association of Training and Employment Professionals (NYATEP), 
Albany
New York State Association of College Admission Counseling, Red Hook
New York State Association of County Health Officials (NYSACHO), Albany
New York State Association of School Business Officials, Albany
New York State Council for Community Behavioral Healthcare, Albany
New York State Dance Education Association, New York
New York State Head Start Association, Glens Falls
New York State Rural Housing Coalition, Albany
New York State School Counselor Association, Leicester
New York University Langone Medical Center, New York
Northern Regional Center for Independent Living, Family Support 
Services, Watertown
Ontario County Office for the Aging, Canandaigua
Opportunities for a Better Tomorrow, Brooklyn
Orleans County Office for the Aging, Albion
Pace Post-Conviction Project, New York
PathStone Corporation, Rochester
Peace Action Bay Ridge, Brooklyn
Per Scholas Inc., Bronx
Program on Applied Demographics--Cornell University, Ithaca
Rape Crisis Service of Planned Parenthood of the Rochester Syracuse 
Region, Batavia
Rural Ulster Preservation Company, Kingston
Safe Against Violence, Hamden
Saugerties Public Housing Agency, Saugerties
School Administrators Association of New York State, Latham
Schuyler County Office for the Aging, Montour Falls
Selfhelp Community Services, New York
Senior Services of Albany, Inc., Albany
Sexual Assault & Crime Victims Assistance Program, Troy
St. John's Riverside Hospital, Yonkers
St. Lawrence County Office for the Aging, Canton
St. Mary's Episcopal Church Food Pantry, New York
Steuben County Department of Social Services/Building Independence for 
the Long Term, Bath
Supportive Housing Network of New York, New York
The Children's Aid Society, New York
The Doe Fund, New York
The Osborne Association, Bronx, Brooklyn, Beacon, Poughkeepsie
Town of Hamburg, New York, Hamburg
Trabajamos Community Head Start, Bronx
Ulster County Office for the Aging, Kingston
VillageCare, New York
Westchester Community Opportunity Program, Inc., Elmsford
Whitney M. Young Community Health Center, Albany
Wyoming County Office for the Aging, Warsaw
YWCA Binghamton and Broome County, Inc., Binghamton
North Carolina
Aging, Disability and Transit Services of Rockingham County, Reidsville
Albemarle Commission Senior Nutrition Program, Hertford
Avery County Habitat for Humanity, Newland
Carolina Institute for Developmental Disabilities, Chapel Hill
Charlotte Family Housing, Charlotte
Citizen Schools North Carolina, Charlotte
Clay County Senior Center, Hayesville
Crisis Council, Inc., Troy
Cumberland County Council on Older Adults, Fayetteville
Cumberland County School System, Fayetteville
disAbility Resource Center, Wilmington
Disability Rights North Carolina, Raleigh
Disaility Rights & Resources, Charlotte
Durham County Department of Social Services, Durham
Duke AIDS Law and Policy Project, Durham
Eastern Carolina Workforce Development Board, Inc., New Bern
Epilepsy Foundation of North Carolina, Winston-Salem
Fargo Public Schools, Fargo
Greensboro Housing Coalition, Greensboro
Harnett County Elderly Nutrition Program, Lillington
Harnett County Schools, Lillington
Healthy Homes and Lead Safety, Leicester
Jackson County Meals on Wheels, Sylva
Lincoln County Senior Services, Lincolnton
Macon Program for Progress, Franklin
McDowell County Head Start & Preschool Programs, Marion
Meals on Wheels of Wake County, Raleigh
Mental Health America of the Triangle, Durham
Mental Health Association in Greensboro, Greensboro
Mental Health Association in Wilson County, Wilson
Mental Health Association of Central Carolinas, Charlotte
National Alliance on Mental Illness (NAMI), Charlotte
National Alliance on Mental Illness (NAMI), Durham
National Alliance on Mental Illness (NAMI), Smithfield
National Alliance on Mental Illness (NAMI), Wilson
NC-LEND at The Carolina Institute for Developmental Disabilities, 
Chapel Hill
News...from our Shoes, Raleigh
North Carolina Association of Educators, Raleigh
North Carolina Council of Administrators of Special Education, 
Wilmington
North Carolina Council of Administrators of Special Education (NCCASE), 
Greensboro
North Carolina Council of Educational Opportunity Programs (NCCEOP), 
Greensboro
North Carolina Families United, Raleigh
North Carolina Lung Cancer Partnership, Raleigh
North Carolina Occupational Therapy Association, Charlotte
North Carolina Principals and Assistant Principals' Association, 
Raleigh
North Carolina School Library Media Association, Raleigh
Pamlico County Senior Services, Alliance
Parent VOICE, Charlotte
Pender County Schools Head Start, Burgaw
Residents for Affordable Housing, Mooresville
Sarah's Refuge, Inc. Domestic Violence & Rape Crisis Center, Warsaw
Senior Resources of Guilford, Greensboro
Senior Services of Forsyth County, Winston-Salem
Southern HIV/AIDS Strategy Initiative (SASI), Durham
Special Education Department Iredell-Statesville Schools, Statesville
Swain County Schools, Bryson City
Carolina Institute for Developmental Disabilities at the University of 
North Carolina Chapel Hill (UECDD), Chapel Hill
United Family Services, Charlotte
WAGES, Goldsboro
Warren-Vance Community Health Center/Northern Outreach Clinic, 
Henderson
Watauga County Project on Aging, Boone
Western North Carolina AIDS Project, Asheville
North Dakota
Abused Adult Resource Center, Bismarck
Dunseith Public School District, Dunseith
Eastern Dakota Housing Alliance, Fargo
Ft. Yates Public School District #4, Ft. Yates
Grand Forks Housing Authority, Grand Forks
Grand Forks Senior Center, Grand Forks
Grand Forks Special Education Unit, Grand Forks
Housing Authority of Cass County, West Fargo
Housing Authority of Dunn County, Dickinson
Housing Authority of McKenzie County, Dickinson
Housing Authority of Richland County, West Fargo
Housing Authority of Stark County, Dickinson
Housing Authority of Traill County, Hillsboro
Kenmare Wheels & Meals, Kenmare
Lake Region Outreach Office, Rolla
Minot Area Homeless Coalition, Inc., Minot
Minot Commission on Aging, Minot
North Dakota Association of Secondary School Principals, Bismarck
North Dakota Coalition for Homeless People, Bismarck
North Dakota Education Association, Dickinson
North Dakota Music Educators Association, Fargo
North Dakota Reading Association, Bismarck
North Dakota School Counseling Association, Jamestown
Parshall School District #3, Parshall
Protection and Advocacy Project, Bismarck
Red River Valley Community Action, Grand Forks
Selfridge Public School District #8, Selfridge
Solen Public School District #3, Solen
South Central Adult Services, Valley City
St. John School District #3, St. John
Valley Senior Services, Fargo
Welcome House, Inc., Bismarck
YWCA Minot, Minot
Northern Mariana Islands
Department of Community and Cultural Affairs, Saipan MP
  
Ohio
Access Center for Independent Living, Dayton
American Association of University Professors--Wright State University, 
Ohio Conference, Lima
Area Agency on Aging 3, Lima
Cleveland Housing Network, Cleveland
Coalition on Homelessness & Housing in Ohio, Columbus
Cogswell Hall, Inc., Cleveland
Columbus State Community College Disability Services, Columbus
Community Counseling Center, Ashtabula
Community Development Corporation Resource Consortium, Inc., Dayton
Consortium for Healthy & Immunized Communities, Inc., Cleveland
Council for Older Adults, Delaware
Cuyahoga County Board of Health (Greater Cleveland), Parma
Elyria City Health District, Elyria
Epilepsy Foundation of Central Ohio, Columbus
Fairborn City Schools, Fairborn
Families Connected of Clermont County/Chapter of the National 
Federation of Families for Children's Mental Health, Batavia
Greater Cincinnati Workforce Network, Cincinnati
Guernsey County Senior Citizens Center, Inc., Cambridge
Hand 'N Hand Activity Center for Adults with Disabilities, Springfield
Hocking Hills Inspire Shelter, Logan
Holmes County General Health District, Millersburg
Housing Research & Advocacy Center, Cleveland
Housing Solutions of Greene County, Inc., Xenia
Juvenile Justice Coalition of Ohio, Bath
Lancaster Fairfield Community Action Agency, Lancaster
Local Initiatives Support Corporation, Toledo
Lorain County Workforce Development Agency, Elyria
Lutheran Metropolitan Ministry, Cleveland
Mad River Local Schools, Riverside
Mature Services, Inc., Akron
Meigs County Council on Aging, Inc., Pomeroy
Mobile Meals, Inc., Akron
National Alliance on Mental Illness--Seneca, Sandusky, Wyandot 
counties, Tiffin
National Alliance on Mental Illness--Stark County, Canton
National Council of Jewish Women--Cleveland, Cleveland
Office of the Ohio Public Defender, Columbus
Ohio Association for Adult and Continuing Education, Columbus
Ohio Association for Career and Technical Education, Westerville
Ohio Association of School Business Officials, Columbus
Ohio Association of Second Harvest Foodbanks, Columbus
Ohio Campus Compact, Granville
Ohio Council of Behavioral Health & Family Services Providers, Columbus
Ohio Education Association, Columbus
Ohio Educational Library Media Association, Columbus
Ohio Innocence Project, Cincinnati
Ohio Music Education Association, Lima
Ohio River Foundation, Cincinnati
Ohio Rural Community Assistance Program, Fremont
Ohio School Social Worker Association, Bay Village
Ohio TRiO, Mansfield
Ohio Workforce Coalition, Fremont
PowerNet of Dayton, Dayton
Public Allies Cincinnati, Cincinnati
Second Harvest Food Bank of Clark, Champaign, Logan Counties, 
Springfield
Second Harvest Food Bank of Mahoning Valley, Youngstown
Shared Harvest Foodbank, Fairfield
Stark County Stark Metropolitan Housing Authority, Canton
Summit County Public Health, Summit County
The Arc of Ohio
The Foodbank, Inc., Dayton
The MetroHealth System, Cleveland
The Ohio Head Start Association, Dayton
Toledo Fair Housing Center, Toledo
Towards Employment, Cleveland
Tri-County Independent Living Center, Inc., Akron
Trumbull County One-Stop, Warren
Trumbull Mobile Meals, Inc., Warren
United Steel Workers Local 8530, Mansfield
Ursuline Sisters HIV/AIDS Ministry, Youngstown
Walnut Hills Redevelopment Foundation, Cincinnati
Workforce Services Unlimited, Inc., Circleville
Working In Neighborhoods, Cincinnati
YWCA H.O.P.E Center, Toledo
Local Initiatives Support Corporation Greater Cincinnati and Northern 
Kentucky, Cincinnati
Voices for Ohio's Children, Cleveland
Oklahoma
Cherokee Strip Reading Council, Enid
Cheyenne & Arapaho Tribes Head Start Program, Concho
Four Winds Iowa Tribe, Perkins
Iowa Tribe of Oklahoma Early Head Start & Expectant Families Program, 
Perkins
J&J Educational Services, Kinta
Leach Public School, Rose
New Lima Public School, Wewoka
Oaks Mission School, Oaks
Oklahoma Association of Career and Technology Education, Oklahoma City
Oklahoma Education Association, Oklahoma City
Oklahoma Innocence Project, Oklahoma City
Oklahoma National Association of Secondary School Principals, 
Kingfisher
Oklahoma Reading Association, Enid
Oklahoma Therapeutic Foster Care Association, Oklahoma City
OSCA, Shawnee
Salina Public Schools, Salina
Wickliffe School, Salina
Oregon
American Association of University Women-Oregon, Salem
CASA of Oregon, Sherwood
Cascade AIDS Project, Portland
Centennial Education Association, Portland
Central City Concern, Portland
Community Alliance of Tenants, Portland
Community Information Center, Portland
Community Pathways, Inc., Portland
Corvallis Education Association, Corvallis
Crook County Health Department, Prineville
Dallas Education Association, Dallas
Disability Rights Oregon, Portland
Eugene Education Association, Eugene
Full Access, Eugene
H & W Mechanical Inc., Tigard
Head Start of Lane County, Springfield
Health Education Network, Corvallis
Hillsboro School District, Hillsboro
Homeless Against Homelessness in America, Portland
Hood River Education Association, Hood River
Job Growers, Inc., Salem
Josiah Hill III Clinic, Portland
Lane Workforce Partnership, Eugene
Madras Education Association, Madras
Mid-Columbia Children's Council, Hood River
Morrow County Education Association, Boardman
National Alliance on Mental Illness--Lane County, Eugene
National Education Association--Parkrose Faculty Association, Portland
Network For Oregon Affordable Housing, Portland
North Clackamas Education Association, Milwaukie
Northwest Oregon Labor Council, AFL-CIO, Portland
Northwest Pilot Project, Portland
Occupational Therapy Association of Oregon, Salem
Oregon Association of School Business Officials, Salem
Oregon Association of School Libraries, Portland
Oregon Campus Compact, Portland
Oregon Developmental Disability Coalition, Salem
Oregon Education Association, Portland
Oregon Food Bank, Portland
Oregon Head Start Association, Phoenix
Oregon Head Start Association, Salem
Oregon Health & Science University, Portland
Oregon Health & Science University Institute on Development & 
Disability--University Center for Excellence in Developmental 
Disabilities (UCEDD), Portland
Oregon Military Support Network, Portland
Oregon Pathways Alliance, The Dalles
Oregon Rehabilitation Association, Salem
Oregon School Counselor Association, Cornelius
Oregon School Social Work Association, Portland
Oregon TRiO Association, Portland
Oregon Wild, Portland
Parkrose Faculty Association, Portland
Partners for a Hunger-Free Oregon, Portland
Partnership Project, Portland
Phoenix-Talent Education Association, Phoenix
Rogue Workforce Partnership, Medford
Salem Keizer Education Association, Salem
Southern Oregon Child & Family Council--Head Start and Early Head 
Start, Medford
Tax Fairness Oregon, Portland
Umpqua Community College/JOBS Program, Roseburg
University of Oregon Center on Human Development--University Center for 
Excellence in Developmental Disabilities (UCEDD), Eugene
Western Farm Workers Association, Hillsboro
Worksystems, Inc., Portland
Pennsylvania
ActionAIDS, Philadelphia
Adult Literacy Program at Bayard Taylor Library, Kennett Square
Allegheny Intermediate Unit, Homestead
Allegheny Valley Association of Churches, Natrona Heights
Allegheny Valley School District, Cheswick
Area Agency on Aging, Philadelphia
Association of Pittsburgh Priests, Pittsburgh
Association of School Psychologists of Pennsylvania (ASPP), Doylestown
Baldwin-Whitehall School District, Pittsburgh
Berks Encore, Reading
BFW Group, L.L.C., Philadelphia
Brentwood Borough School District, Pittsburgh
Bryn Mawr Peace Coalition, Bryn Mawr
Center for Literacy, Inc., Philadelphia
Center for Social Policy and Community Development, Philadelphia
Central Intermediate Unit 10 Development Center for Adults, Pleasant 
Gap
Central Pennsylvania Food Bank, Harrisburg
Centre County Women's Resource Center, State College
Chester County Family Literacy, Kennett Square
Chester County Food Bank, Downingtown
Citizens for Pennsylvania's Future (PennFuture), Harrisburg
Citizens for the Arts in Pennsylvania, Harrisburg
Clairton City School District, Clairton
Community Action Committee of the Lehigh Valley, Bethlehem
Community Counseling Center of Mercer County, Hermitage
Community Development Action Corporation, Norristown
Community Education Center, Altoona
Community Food Warehouse of Mercer County, Sharon
Community Learning Center, Philadelphia
Community Organization for Mental Health and Retardation (COMHAR, 
Inc.), Philadelphia
Community Services Group, Sunbury
Cornell School District, Corapolis
Coro Center for Civic Leadership, Pittsburgh
Crawford County READ Program, Titusville
Crime Victim Center of Erie County, Erie
Deer Lakes School District, Russellton
Delaware County Community College, Downingtown
Delaware Valley School District, Milford
Depression and Bipolar Support Alliance Pennsylvania, Erie
Diakon Community Services for Seniors, Pottsville
Dickinson Center, Inc., Ridgway
Disability Rights Network of Pennsylvania, Harrisburg
Disabled In Action, Philadelphia
Elizabeth Forward School District, Elizabeth
Employment and Training, Inc., Huntingdon
Employment Skills Center, Carlisle
Feast of Justice, Philadelphia
Focus On Renewal, McKees Rocks
Fox Chapel Area School District, Pittsburgh
Franklin County Headstart, Chambersburg
Garraty Workforce Investment, Hummelstown
Goodwill Literacy Initiative, Pittsburgh
Goodwill of Southwestern Pennsylvania, Pittsburgh
Greater Philadelphia Coalition Against Hunger, Philadelphia
Greater Pittsburgh Community Food Bank, Duquesne
Greater Pittsburgh Literacy Council, Pittsburgh
Greater Washington County Food Bank, Eighty Four
H & J Weinberg Food Bank, Wilkes-Barre
Habitat for Humanity of Greater Pittsburgh, Pittsburgh
Highlands School District, Natrona Heights
Housing Alliance of Pennsylvania, Glenside
Housing Association & Development Corporation, Allentown
Housing Authority of Chester County, Chester County
Housing Authority of the County of Dauphin, Steelton
Hunger-Free Pennsylvania, McMurray
Immigration and Refugee Services, ESL Program, Harrisburg
Institute on Disabilities--University Center for Excellence in 
Developmental Disabilities (UCEDD), Philadelphia
International Union of Operating Engineers Local 95, Pittsburgh
Interplay Child Care Center, Pittsburgh
JEVS Human Services, Philadelphia
Just Harvest: A Center for Action Against Hunger, Pittsburgh
Kesington Hospital Early Intervention Services Department, Philadelphia
Keystone Oaks School District, Pittsburgh
Lake Erie Region Conservancy, Erie
Lawrence County Housing Authority, New Castle
Lifelong Learning Choices, New Castle
LifeSpan, Inc., Homestead
Lincoln Intermediate Unit Franklin County Literacy Council, 
Chambersburg
Literacy Council of Lancaster-Lebanon, Lebanon
Literacy Council of Norristown, Norristown
Literacy Council of Reading-Berks, Inc., Reading
Local Initiatives Support Corporation, Philadelphia
Luzerne County Community College, Nanticoke
Marywood Adult Literacy Education Program, Scranton
Mazzoni Center, Philadelphia
McKeesport Area School District, McKeesport
Meals On Wheels Association of Pennsylvania, Inc., Bethlehem
Meals on Wheels of Chester County, Inc., West Chester
Meals on Wheels of Lehigh County, Allentown
Meals On Wheels of Northampton County, Inc., Bethlehem
Meals on Wheels of Northeastern PA, Scranton
Mental Health Association of Northwestern Pennsylvania, Erie
Metro-Erie Meals On Wheels, Erie
Mollie's Meals, Pittsburgh
Monroe County Meals on Wheels, Inc., Stroudsburg
Multicultural Community Resource Center, Erie
National Alliance for Mental Illness, Lansdale
National Alliance on Mental Illness--Chester County, West Chester
Nazareth Housing Services, Pittsburgh
Neighborhood Networks, Philadelphia
Northgate School District, Pittsburgh
Northwest Philadelphia Interfaith Hospitality Network, Philadelphia
Penn Action, Bucks County
Penn Hills School District, Pittsburgh
Penn Medicine, Philadelphia
Pennsylvania Association for Adult Continuing Education (PAACE), State 
College
Pathways Pennsylvania, Holmes
Pennsylvania Association Council of Administrators of Special 
Education, Mountain Top
Pennsylvania Association for College Admission Counseling, Gettysburg
Pennsylvania Association of Career and Technical Education, 
Philadelphia
Pennsylvania Association of Elementary and Secondary School Principals, 
Summerdale
Pennsylvania Association of Rural and Small Schools, Harrisburg
Pennsylvania Association of School Business Officials, Harrisburg
Pennsylvania Coalition Against Rape, Harrisburg
Pennsylvania Council of Churches, Harrisburg
Pennsylvania Head Start Association, Harrisburg
Pennsylvania Occupational Therapy Association, Harrisburg
Pennsylvania Partners, Camp Hill
Pennsylvania Partnerships for Children, Harrisburg
Pennsylvania School Librarians Association, Whitehall
Pennsylvania State Education Association, Harrisburg
Pennsylvania Statewide Independent Living Council, Lords Valley
PenTrans, Philadelphia
Perkiomen School, Pennsburg
Perry County Literacy Council, Newport
Philadelphia Neighborhood Networks, Philadelphia
Philadelphia Works, Philadelphia
Phoenix Rising Counseling Services, Scranton
Pittsburgh Partnership for Neighborhood Development, Pittsburgh
Pleasant Valley Ecumenical Network, Saylorsburg
Plum Borough School District, Plum
ProJeCt of Easton, Inc., Easton
Providence Connections, Pittsburgh
Public Allies Pittsburgh, Pittsburgh
Quaker Valley School District, Sewickley
Reading Muhlenberg Career & Technology Center, Reading
Regional Center for Workforce Excellence, Northwest WIA
Robert Morris University, Moon
Room to Grow Child Development Center/YMCA Greater Pittsburgh, 
Pittsburgh
Shaler Area School District, Glenshaw
South Fayette Township School District, McDonald
South Hills Interfaith Ministries, Bethel Park
South Park School District, South Park
Squirrel Hill Community Food Pantry, Pittsburgh
St. James Social Justice and Peace Committee, Wilkinsburg
Stairways Behavioral Health, Erie
Temple University Center for Social Policy and Community Development 
(CSPCD), Philadelphia
The Advocacy Alliance, Zionsville
The Arc of Pennsylvania, Harrisburg
The Thomas Merton Center, Pittsburgh
The Pennsylvania Innocence Project, Philadelphia
TIU 11 Community Education Services, Lewistown
Tuscarora Intermediate Unit 11 Community Education Services, Lewistown
Tutors of Literacy in the Commonwealth, State College
United Methodist Church, Erie
Vita Education Services, Doylestown
West Allegheny School District, Imperial
West Chester Food Cupboard, West Chester
West Jefferson Hills School District, Jefferson Hills
West Mifflin School District, West Mifflin
Westmoreland Food Bank, Delmont
Women's Christian Alliance, Philadelphia
Won Community Center, Glenside
YWCA Lancaster, Lancaster
Puerto Rico
Centro Deambulantes Cristo Pobre, Ponce
Coalicion de Coaliciones Pro Personas sin Hogar de PR, Inc., Ponce
Head Start Program, Guaynabo
One Stop Career Center of Puerto Rico, Inc., San Juan
Rhode Island
Childhood Lead Action Project, Providence
Children's Friend, Providence
Economic Progress Institute, Providence
Local Initiatives Support Corporation Rhode Island, Providence
Mental Health Association of Rhode Island, Pawtucket
Paul Sherlock Center on Disabilities, Providence
Rhode Island Association of School Principals, Providence
Rhode Island Coalition for the Homeless, Pawtucket
Rhode Island KIDS COUNT, Providence
Rhode Island School Psychologist Association, Providence
Tiverton Senior Center, Tiverton
Women's Development Corporation, Providence
Woonsocket Head Start Child Development Association, Inc.
South Carolina
Affordable Housing Coalition of South Carolina, Columbia
Berkeley County School District, Moncks Corner
Clemson University, Clemson
Florence Crittenton Programs of South Carolina, Charleston
Habitat for Humanity Georgetown County, Georgetown
Humanities Foundation, Mount Pleasant
Lowcountry Housing Trust, Charleston
Protection & Advocacy for People with Disabilities, Inc., Columbia
South Carolina Appleseed Legal Justice Center, Columbia
South Carolina Association of School Social Workers, Columbia
South Carolina Head Start Association, Inc., Hartsville
South Carolina School Counselor Association, Eutawville
South Carolina TRiO, Greenville
Southern Association for College Admission Counseling, North Augusta
The Arc of South Carolina
United Way of Greenville County, Greenville
Watertree AIDS Task Force, Sumter
South Dakota
Aberdeen Housing Authority, Aberdeen
Brandon Valley School District, Brandon
Center for Active Generations, Sioux Falls
Center for Disabilities, University Center for Excellence in 
Developmental Disabilities (UCEDD), Sioux Falls
Custer School District, Custer
Douglas Public School District #51, Box Elder
Flandreau Public School, Flandreau
Hot Springs School District 23-2, Hot Springs
Housing and Redevelopment Commission of Pierre, Pierre
Impact Schools of South Dakota, Sioux Falls
Kadoka Area School District 35-2, Kadoka
Learning Disabilities Association of South Dakota, Chamberlain
Lyman School District, Presho
McLaughlin Public School, McLaughlin
Mitchell Housing Authority, Mitchell
Oelrichs School District, Oelrichs
Smee School District, Wakpala
South Central School District, Bonesteel
South Dakota ASPIRE, Mitchell
South Dakota Association for Career and Technical Education, Watertown
South Dakota Council of Administrators of Special Education, Canton
South Dakota Education Association, Pierre
South Dakota Occupational Therapy Association, Sioux Falls
South Dakota School Counseling Association, Sioux Falls
Todd County School District, Mission
Wagner Community School District, Wagner
White River School District 47-1 SD, White River
Tennessee
Black Children's Institute of Tennessee, Nashville
Center for Literacy Studies, Knoxville
Clarksville Retired Teachers (TEA, NEA, ACA), Clarksville
Disability Law & Advocacy Center of Tennessee, Nashville
Disability Resource Center, Knoxville
East Tennessee State University, Johnson City
Epilepsy Foundation Southeast Tennessee, Chattanooga
Fleming Construction Co., Collierville
Kingsport Public Housing, Kingsport
Kingsport/Sullivan County Adult Education, Kingsport
Le Bonheur Children's Hospital, Memphis
Learning Disabilities Association of Tennessee, Memphis
Ledford Engineering and Planning, L.L.C., Arlington
Metro Nashville Council, Nashville
Nashville CARES, Nashville
New Level Community Development Corporation, Nashville
Regional Intervention Program-Gallatin, Gallatin
Ridgeview Psychiatric Hospital & Center, Inc., Oak Ridge
Telecom Training Corporation, Nashville
Tennessee Association for Adult and Community Education, Ripley
Tennessee Association of Special Programs, Knoxville
Tennessee Education Association, Nashville
The Arc Tennessee
Unicoi County Board of Education, Erwin
Vanderbilt Comprehensive Care Clinic, Nashville
Volunteer Behavioral Health Care System, Murfreesboro
Texas
A Greener World Community Alliance, Houston
Arc of Greater Beaumont, Beaumont
Austin Resource Center for Independent Living, Austin
Baylor University Family Abuse Center, Waco
Builders of Hope CDC, Dallas
CASA of Southeast Texas, Beaumont
Center for Public Policy Priorities, Austin
Children's Defense Fund--Texas, Houston
Citizen Schools Texas, Houston
City Wide Community Development Corporation, Dallas
Copperas Cove Independent School District, Copperas Cove
Crisis Center of the Plains, Plainview
Denton Affordable Housing Corporation, Denton
Denton County Homeless Coalition, Denton County
Disability Rights Texas, Austin
Education Equals Making Community Connections, Plantersville
Family Health & Aids Care Services International (FAHASI), Houston
Fort Bend Seniors Meals on Wheels, Rosenberg
Fort Sam Houston Independent School District, San Antonio
Freedom House, Weatherford
Gateway to Care, Houston
Gregory Housing Authority, Gregory
Health Care for All--Texas, Houston
Hill Country Crisis Council, Inc., Kerrville
Houston Center for Independent Living, Houston
InnerWisdom Counseling Center, Houston
K.E.E.P.S., Austin
Kaufman County Senior Citizens Services, Inc., Terrell
La Fe Policy Research and Education Center, San Antonio
Lackland Independent School District, San Antonio
Legacy Community Health Services, Houston
Lewisville Independent School District, Flower Mound
Liberty County Project on Aging, Liberty
Llano Grande Center, Elsa
Local Initiatives Support Corporation Houston, Houston
LoneStar LEND, University of Texas Health Sciences Center at Houston, 
Houston
Meals on Wheels and More, Austin
Meals on Wheels Association of Texas
Meals on Wheels of Texoma, Gainesville
Meals on Wheels, Waco
Mental Health America of Greater Dallas, Dallas
Mental Health America of Southeast Texas, Beaumont
Mental Health Association in Jefferson County, Beaumont,
Mi Escuelita Preschool, Dallas
National Alliance on Mental Illness (NAMI), Lubbock
National Alliance on Mental Illness (NAMI), San Antonio
National Birth Defects Prevention Network, Houston
National Council of Jewish Women, Houston Section, Houston
Nueces County community Action Agency--Early Head Start, Corpus Christi
Nutrition and Services for Seniors, Beaumont
Parent/Child Incorporated, San Antonio
Pottsboro Independent School District, Pottsboro
Project Transitions, Austin
Senior Center of Walker County, Huntsville
Senior Community Outreach Services, Inc., Alamo
Sexual Assault Resource Center, Bryan
Tarrant County Housing, Fort Worth
Texans Care for Children, Austin
Texas Association for College Admission Counseling, Van Alstyne
Texas Association of Local Health Officials, Austin
Texas Council of Administrators of Special Education, Austin
Texas Elementary PrIncipals and Supervisors Association, Austin
Texas Food Bank Network, Austin
Texas Homeless Network, Austin
Texas Low Income Housing Information Service, Austin
Texas School Public Relations Association, Austin
Texas Tenants' Union, Dallas
The Kitchen ``Meals on Wheels,'' Wichita Falls
The Woodlands Grass Roots Environmental Education Network (GREEN), The 
Woodlands
TIRR Foundation, Houston
Urban Progress Community Development Corporation (UPCDC) Texas, Inc., 
Dallas
Wood County Health Department, Quitman
YWCA Fort Worth & Tarrant County, Fort Worth
Utah
Brigham City Senior Center Meals on Wheels, Brigham City
Crossroads Urban Center, Salt Lake City
Disabled Rights Action Committee, Salt Lake City
Seekhaven Family Crisis & Resource Center, Moab
The Learning Center for Families, St. George
Tri-County Independent Living Center, Woods Cross
University of Utah Health Sciences, Salt Lake
Utah Association for Career and Technical Education, Salt Lake City
Utah Association of Secondary School Principals, West Jordan
Utah Developmental Disabilities Council
Utah Education Association, Salt Lake City
Utah Food Bank, Salt Lake City
Utah Housing Coalition, Salt Lake City
Utah School Counselor Association, Murray
Utah State University Center for Persons with Disabilities, Logan
Utahns Against Hunger, Salt Lake City
Voices for Utah Children, Salt Lake City
Vermont
Addison County Community Trust, Vergennes
Area Agency on Aging for Northeastern Vermont, St. Johnsbury
Bennington County Head Start, Bennington
Brattleboro Area Affordable Housing, Brattleboro
Brattleboro Housing Authority, Brattleboro
Central Vermont Council on Aging, Barre
Champlain Housing Trust, Burlington
Chelsea Area Senior Citizen's Center, Chelsea
Department of Economic Housing & Community Development, Montpelier
Disability Rights Vermont, Montpelier
Franklin Central Supervisory Union, St. Albans
Galley Senior Meals Program, Barre
Greater Northfield Senior Citizens, Inc., Northfield
Hunger Free Vermont, South Burlington
Lamoille North Supervisory Union, Hyde Park
Lamoille South Supervisory Union, Morrisville, Stowe, Elmore
North Country Schools Supervisory Union, Newport City
Northgate Residents' Ownership Corporation, Burlington
Safe Kids Addison County, Vergennes
Sexual Assault Crisis Team, Barre
South Royalton Area Senior Citizen's Center, South Royalton
Twin Valley Seniors, Inc., Marshfield
United Counseling Service of Bennington County, Bennington
Vermont Adult Learning, Waterbury
Vermont Affordable Housing Coalition, Burlington
Vermont Center for Independent Living, Montpelier
Vermont Child Passenger Safety, Milton
Vermont Community Loan Fund, Montpelier
Vermont Council of Special Education Administrators, Montpelier
Vermont Education Opportunity Program (VEOP), Brandon
Vermont Educational Opportunity Programs (VEOP), Castleton
Vermont Occupational Therapy Association, Plainfield
Vermont Works for Women, Winooski
Vermont-NEA, Montpelier
VocRehab Vermont, Williston
Voices for Vermont's Children, Montpelier
Washington West Supervisory Union, Waitsfield
Virginia
A Hope 4 Tomorrow, Inc., Portsmouth
Beach House, Inc., Virginia Beach
Byrd Elementary School, Richmond
Coalition for Justice, Blacksburg
Community Housing Partners, Christiansburg
ENDependence Center of Northern VA, Arlington
Families & Allies of Virginia's Youth, Arlington
FeedMore, Inc., Richmond
Learning Disabilities Association of Virginia, Richmond
Local Office on Aging, Roanoke
Mental Health America, Charlottesville-Albemarle, Charlottesville
National Alliance on Mental Illness (NAMI) NoVa, Leesburg
National Alliance on Mental Illness (NAMI), Virginia Beach
Partnership for People with Disabilities--University Center for 
Excellence in Developmental Disabilities (UCEDD), Richmond
Potomac & Chesapeake Association for College Admission Counseling, 
Virginia Beach
Prince George County Public Schools, Prince George
Public Housing of Residents, Charlottesville
Richmond Public Schools, Richmond
Sexual Assault Victims Advocacy Services (SAVAS), Woodbridge
Social Action Linking Together (SALT), Vienna
The Virginia School Counselor Association, Manassas
University of Virginia, Charlottesville
Virginia Association of Centers for Independent Living, Roanoke
Virginia Association of Community Services Boards, Richmond
Virginia Association of Educational Opportunity Program Personnel, 
Wytheville
Virginia Association of School Librarians, Richmond
Virginia Association of Secondary School Principals, Richmond
Virginia Council of Administrators of Special Education (VCASE), 
Hopewell
Virginia Education Association, Richmond
Virginia Housing Coalition, Richmond
Virginia Office for Protection and Advocacy, Richmond
Virginia Organizing, Charlottesville
Voices for Virginia's Children, Richmond
Virginia Local Initiatives Support Corporation, Richmond
Virgin Islands
St. Croix Educational Administrators' Association, St. Croix
  
Washington
Above The Line: The Poverty Project, Lacey
Aging and Long Term Care of Eastern Washington, Spokane
API Chaya, Seattle
Asian Counseling & Referral Service, Seattle
Association of Washington School Principals, Odessa
Campion Foundation, Seattle
Career Path Services, Spokane
Cascadia Community College, Bothell
Center for Independence, Tacoma
Central Kitsap School District, Silverdale
Children's Alliance, Seattle
Church of Steadfast Love, Seattle
Columbia River Economic Development Council, Vancouver
Community Psychiatric Clinic, Seattle
Compass Housing Alliance, Seattle
Conscious Talk Radio, Issaquah
Food Lifeline, Seattle
Frontier Behavioral Health, Spokane
Granger School District #204, Granger
Heartlandz L.L.C., Bellingham
HomeStep, Seattle
Immanuel Community Services, Seattle
Impact Capital, Seattle
Inchelium School Board, Inchelium
Infectious Disease Research Institute (IDRI), Seattle
Innocence Project Northwest, Seattle
International Longshore and Warehouse Union, Seattle
Islamic Civic Engagement Project, Seattle
Kitsap Mental Health Services, Bremerton
Lifelong AIDS Alliance, Seattle
Lutheran Community Services Northwest, Spokane
Mount Adams School District #209, White Swan
Nespelem School District #14, Nespelem
Northwest Harvest, Seattle
Northwest Health Law Advocates, Seattle
Office of Rural & Farmworker Housing, Yakima
Pacific Northwest Association for College Admission Counseling, Seattle
Parents Organizing for Welfare and Economic Rights, Olympia
Pend Oreille County Counseling Services, Newport
Pierce County Housing Authority, Tacoma
Port Gamble Elder's Program, Kingston
Port Gamble S'Klallam Housing Authority, Kingston
Port Gamble S'Klallam Tribe Early Childhood Education Program Policy 
Council, Kingston
Puget Sound Alliance for Retired Americans, Seattle
Puget Sound ESD, Renton
Sacred Heart Social Justice Ministry, Pullman
Save A Life, Puyallup
Seattle BioMed, Seattle
Seattle Biomedical Research Institute and Institute for Systems 
Biology, Seattle
Seattle Jobs Initiative, Seattle
Sexual Assault and Family Trauma Response Center, Spokane
Skagit Habitat for Humanity, Mount Vernon
Solid Ground, Seattle
Sound Mental Health, Seattle
The Arc of King County, Seattle
The Arc of Snohomish County, Everett
The Arc of Tri-Cities, Richland
The Arc of Washington State
Triumph Treatment Services, Yakima
Washington Association for Career and Technical Education, Olympia
Washington Association of School Business Officials, Tumwater
Washington CAN!, Seattle
Washington Community Mental Health Council, Seattle
Washington ElderCare Alliance, Olympia
Washington Global Health Alliance, Seattle
Washington Library Media Association (WLMA), Seattle
Washington State Association of Head Start and ECEAP, Bellevue
Washington State Council on Aging, Spokane
Washington State TRIO Association, Seattle
Wellpinit School District, Wellpinit
Willapa Behavioral Health, Long Beach
Women's Coalition of Washington, Yakima
WorkForce Central, Tacoma
Workforce Development Council Seattle-King County, Seattle
Yakima Valley System of Care, Yakima
Valley Cities Counseling, Kent
West Virginia
Boone County Community Organization, Madison
CommunityWorks in West Virginia, Inc., Charleston
Hampshire County Schools, Romney
Huntington Area Food Bank, Huntington
Mason County Schools, Point Pleasant
Morgan County Board of Education, Berkeley Springs
Mountain Community Action Project of West Virginia, Inc., Buckhannon
Northern West Virginia Center for Independent Living, Morgantown
Pocahontas County Health Department, Marlinton
The Fairmont Morgantown Housing Authority, Fairmont
Tucker County Schools, Parsons
Valley HealthCare System, Morgantown
West Virginia Association of Secondary School Principals (WVASSP), 
Charleston
West Virginia Campus Compact, Morgantown
West Virginia Coalition to End Homelessness, Inc., Weston
West Virginia Council of Administrators of Special Education, Franklin
West Virginia TRiO Association, Huntington
West Virginia University, Morgantown
Wisconsin
Access to Independence, Madison
AIDS Resource Center of Wisconsin, Statewide
Ashland County Aging Unit, Inc., Ashland
Association of Wisconsin School Administrators, Madison
ASTOP Sexual Abuse Services, Fond du Lac
Citizen Action of Wisconsin, Milwaukee
City of Kenosha Housing Authority, Kenosha
CWC HIV/AIDS Advocacy, Policy & Procedure Consultant Service, Milwaukee
Disability Rights Wisconsin, Madison
Edgewood College, Madison
Family Forum, Inc., Superior
Grassroots Empowerment Project, Madison
HAVEN, Inc., Merrill
HIRSCH GROUP Architects, Madison
Independent Living Council of Wisconsin, Inc., Madison
La Crosse Wisconsin WIC Program, La Crosse
LaLeche League of Racine, Racine
Learning Disabilities Association of Wisconsin, Kiel
Local Initiatives Support Corporation Milwaukee, Milwaukee
Marquette University, Milwaukee
Menominee Indian School District, Keshena
Mental Health America of Wisconsin, Madison
Milwaukee Area Workforce Investment Board (MAWIB), Milwaukee
Northwest Wisconsin Concentrated Employment Program (CEP, Inc.), 
Ashland
Northwest Wisconsin Workforce Investment Board, Inc., Ashland
Polk County Health Department, Balsam Lake
Psychonomic Society, Madison
Reach Counseling Services, Inc., Neenah
School District of Wabeno Area, Wabeno
Southwest Wisconsin Workforce Development Board, Platteville
Wisconsin Association for College Admission Counseling, Madison
Wisconsin Association of Educational Opportunity Program Personnel 
(WAEOPP), Superior
Wisconsin Association of School Business Officials, Madison
Wisconsin Council of Administrators of Special Services, Madison
Wisconsin Council on Children and Families, Madison
Wisconsin Education Association Council, Madison
Wisconsin Family Assistance Center for Education, Training, and 
Support, Inc., Milwaukee
Wisconsin Manufactured Home Owners Association, Inc., Marshall
Wisconsin Regional Training Partnership, Milwaukee
Wisconsin School Counselor Association, Madison
Wisconsin School Psychologists Association, La Crosse
Wisconsin School Social Work Association, Milwaukee
Wisconsin WIC Association, Oshkosh
Workforce Development Board of South Central Wisconsin, Madison
Wyoming
Fremont County Public Health, Lander
Fremont County School District #14, Ethete
Fremont County School District #21, Fort Washakie
Natrona County Meals on Wheels, Casper
Wyoming Association of Secondary School Principals, Laramie
Wyoming Children's Action Alliance, Cheyenne
Wyoming Coalition for the Homeless, Cheyenne
Wyoming Occupational Therapy Association, Casper
Wyoming Protection & Advocacy System, Inc., Cheyenne
Wyoming School Counselors Association, Worland

    Senator Murray. So thank you very much for that.
    And, Secretary Donovan, let me begin with you. In your 
testimony, you pointed out the consequences of sequestration 
cuts to HUD programs, more than 200,000 families being at risk 
of losing their housing. But those kinds of cuts really move 
past just the implications you talked about.
    Cuts to military and domestic spending will result in 
significant job losses across our country. So middle class 
families will find themselves threatened because they have lost 
their job, resulting in housing--at a very fragile time in our 
housing market and our economy.
    Could you talk a little bit about how the massive job 
layoffs that would occur, if sequestration was implemented, 
would affect the housing market?
    Secretary Donovan. One of the things that is so important, 
as you know, Senator, as the chair of our subcommittee, is that 
for every $1 we put into housing, we are typically seeing $5 or 
$10 of private capital that come in and multiply the impacts. 
And so, if you go in reverse, you multiply the impact of these 
cuts across all of the private investment that comes into 
housing.

                                HOUSING

    So, literally, when you look at whether it is our direct 
housing construction programs or community development block 
grant, for every one of the tens of thousands of jobs that you 
would lose through the direct spending that we have in 
construction, the ripple effects into factory workers, real 
estate agents, lenders, all of those, what you see is 5 to 10 
times the number of job cuts that happen because you don't have 
private capital coming in. And then, you build on that, a loss 
of confidence.
    Again, housing has been driving our economic recovery. It 
has been one of the main things that really has turned around 
in the past year. Just to cut that off at a time--you will see 
less consumer spending, families won't go to restaurants if the 
equity in their home is dropping, loss of confidence in 
neighborhoods means that prices could potentially turn back 
around.
    The ripple effects are enormous because of how central 
housing is to our economy and our economic recovery.
    Senator Murray. So implementation of the sequestration 
would not only have a direct impact on the housing programs, 
but on the job market, the other folks, but the confidence 
factor at this time, when we are very fragile as well, will 
have a huge----
    Secretary Donovan. Absolutely.
    Senator Murray [continuing]. Long-term ripple effect, as 
well.

  SEQUESTER WOULD HIT HARD ALREADY FISCALLY STRAPPED LOCAL EDUCATION 
                                AGENCIES

    Secretary Duncan, education is a top priority of mine. And 
I know sequestration is going to have a huge impact, as we have 
heard.
    I heard from Yakima school district in my State. They have 
a free and reduced price lunch-rate at 83 percent. They told me 
it would impact them with a $1.6 million budget cut. This is 
after our State legislature has already had impacts at our own 
local school districts.
    We have districts like Central Kitsap and Clover Park that 
are close to military bases.
    Can you tell me how you would see just the general impact 
of these districts having to cope with sequestration? You 
alluded a little bit, those districts right now are making 
their decisions about hiring teachers. Talk a little bit more 
about the impacts we would see.
    Secretary Duncan. Well, first, again, we are not just 
coming into this situation in a vacuum. We have to look at the 
past couple of years. Through the Recovery Act, we were lucky 
enough--thanks to Congress' support--to save about 300,000 
educator jobs. But the Nation also lost about 300,000 educator 
jobs.
    So we have class sizes that are much higher than we would 
like. We have fewer children engaged in afterschool programs 
and summer school programs. I am always fighting for more time, 
not less time. So we are at a very, very tough economic time.

                          CHILDHOOD EDUCATION

    For many long-time educators, this is the toughest 
financial situation they have been in, in 20, 30, 40 years. So 
now to compound that problem, and to remove additional 
resources now, would just exacerbate a really tough situation 
that we are trying to make better.
    Again, other countries aren't doing this. This is not what 
South Korea is doing. They are investing more. And that is 
where the competition is. So for us to not be thoughtful in 
this just doesn't make sense.
    And then, finally, you know, every good superintendent is 
trying to do budget planning now for next year. And, as a 
superintendent you are trying to hire staff. You are trying to 
hire the best staff. You are trying to figure out your 
afterschool program and your summer school programming now for 
June and July. And when you have a lack of stability, when you 
don't know what is going on, you have to plan for the worst. 
That is the prudent thing to do. So you don't schedule the 
summer stuff. You raise your class sizes.
    And so, to take away stability--the least we could do in 
tough economic times is give people stability and 
predictability so they can manage. To take that away just 
undermines the great work that people do at the local level. 
And, again, that is not why any of us came to Washington, to 
hurt that.

                 NEGATIVE IMPACT OF LARGER CLASS SIZES

    Senator Murray. I appreciate that, and I just wanted to 
remind all of us, just increasing class size isn't just a 
phrase. I talked to a middle school teacher a few weeks ago 
after Newtown who told me that she now has so many kids in each 
one of her middle school classes, she has no ability to know 
each one of those kids anymore. And at a time when we are 
really counting on our educators to know their kids, because of 
the impacts of not knowing them, this is a real consequence to 
our country.

                          IMPACT ON HEAD START

    Secretary Duncan. And just quickly to add to that, Senator, 
you and Senator Harkin and so many others have fought so hard 
to get more children engaged in early childhood education. The 
President talked about that extensively in the State of the 
Union Address. It is the best long-term investment we can make.
    Our good friend Secretary Sebelius isn't here today, but I 
talked earlier in my testimony, about the 70,000 potentially 
fewer children in Head Start--children would be kicked out of 
Head Start, not new ones going in, but fewer children would 
have access. How is that the right thing to do for the long 
haul?
    Senator Murray. And remind us all, they grow up to be 
adults.
    Thank you.
    Chairwoman Mikulski. We now go to Senator Coats, the 
ranking member now on the Homeland Security Subcommittee. He is 
going to be followed by Senator Tom Udall--you are next--to be 
followed by Senator Murkowski, to be followed by Senator 
Feinstein. That will be the next four. And after that, we will 
announce the next group.
    If your staff is curious where you all are, come over and 
talk to my staff. But we are moving. And this is a very 
content-rich hearing.
    Senator Coats, please.

                     STATEMENT OF SENATOR DAN COATS

    Senator Coats. Madam Chairman, it is a pleasure to be 
moving along with you in the chair, and all of us adhering to 
the 5-minute rule, and I am no exception to that.
    The point I want to try to make is, you have all made a 
case for having to deal with shrinking resources.
    I didn't support the sequester, either. I agree it is not 
the best way to deal with it. These are issues we should be 
working on together through the regular process, separating the 
essential from the ``like to do, but we can't afford it right 
now'', from ``maybe we shouldn't be doing that at all'', and 
``wouldn't it be better if we could transfer those funds into 
something that is more essential.''
    Every agency head and Secretary, and others that have been 
before our Appropriations Committee the last 2 years, I have 
asked this same question. We have to deal with the reality that 
our mandatory spending is running away with our budget. The 
discretionary portion of both defense and nondefense 
discretionary is ever-shrinking, not necessarily because that 
is the way it should be or the way we should be allocating the 
Nation's resources, but because the part of the pie that we 
have no control over, in terms of growth, is just simply 
continuing to eat up more and more of our annual budget.
    You can only tax so much. We just took care of taxes 
through the fiscal cliff. I supported that.
    But the point I want to try to make is, should we not all 
be dealing with the reality of what we are facing?
    Look, when World War II ended, our soldiers came home. We 
recovered from a depression, and everybody started having 
babies. The so-called ``baby boom'' has been like a pig going 
through a python.
    First, we needed nurseries. And then we needed diapers in 
enormous amounts, and then elementary schools, and then junior 
high schools. This whole bulge that occurred in the post-war 
period here has moved through our economy. And now it is 
retirement; 10,000 baby boomers a day are retiring.
    And we have mandatory programs in place that provide 
healthcare needs and healthcare finances and retirement 
security that none of us want to undo. But the reality is, 
these are the facts that we are dealing with and we need 
reforms.
    And should we not all be here, Republicans and Democrats 
and agency heads and Secretaries and others, working to try to 
find a way to address this ever-increasing mandatory spending 
so that we have funds available for defense and essential 
nondefense functions?
    The sequester is a 1-year fix that we are trying to do now. 
Shouldn't we be doing the long-term fix? And are you pleading 
with the White House to work on this with the Congress? Are we 
working together to try to address what we should have been 
addressing, if not years ago, decades ago? We have all seen 
this coming.
    This modern miracle of medicine has increased life 
expectancy, which used to be not higher than 70. Now people are 
living to be 80 and 85, and 90, 95 years old. We are blessed 
with this miracle of providing us opportunities to live longer. 
George Will, I think, said, ``If so, after turning 70, one has, 
ever after, the pleasure of playing, as it were, with house 
money'', when you look at the whole history of civilization in 
terms of how long people live.
    And second, we have known this baby boom crunch is coming 
the last 30, 35 years. And in all that time, we have done one 
thing to address mandatory spending, the 1984 Social Security 
fix, which bought us about 35 or 40 years of solvency for 
Social Security by raising the retirement age and making some 
sensible reforms.
    And so we talk about this all the time. But here we are 
pleading with doomsday scenarios about what is going to happen 
when we all know regardless of where you come down--whether you 
support medical research, education, better housing, 
strengthening our national defense, or making sure it stays 
strong, or guarding the border--all the things you are 
discussing here, you have to get money from an ever-shrinking 
piece of the pie.
    So, I guess my question is, when are we all going to step 
up and press our respective colleagues, whether you are 
Republican or Democrat, liberal or conservative, to address 
this problem? This is a budget problem that we have to deal 
with on a long-term basis.
    So I just wanted to make that point. And I have used up all 
my time.
    Mr. Werfel. Can I offer a very quick response?
    Senator Coats. If it is all right with the chairwoman, you 
can. My time is expired.
    Mr. Werfel. Very quick, as quick as I can.
    The President on multiple occasions has put forward a plan 
that would create $4 trillion in deficit reduction over 10 
years. A $4 trillion deficit reduction is something that 
Members of both parties' independent experts have pointed to as 
an important benchmark to lay a critical foundation for longer-
term deficit reduction into many years into the future.
    Part of that $4 trillion plan, key components of it, 
involve sensible reforms to mandatory programs and 
entitlements. So there is, in the President's proposal, 
specific areas that start making those types of sensible 
reforms. Also, you know, they embody the spending cuts that 
were in the BCA, and there is then tax reform, as well.
    But I just wanted to make sure that I got down on the 
record that, within the President's $4 trillion plan, there are 
sensible entitlement reforms.
    Senator Coats. There has been some of that in what the 
President proposes. There have been Democratic and Republican 
plans. But we haven't done it. And I think the time is up, and 
we need to do it.
    Chairwoman Mikulski. Senator Tom Udall.

                     STATEMENT OF SENATOR TOM UDALL

    Senator Udall. Thank you, Madam Chair.
    And I think the five of you have made a very compelling 
case of how devastating this sequester could be.
    And, Madam Chair, let me just say to you what a great 
pleasure it is to participate in my first Senate Appropriations 
Committee hearing. I wish it was under more pleasant 
circumstances.
    Before I turn to our witnesses for some questions, I would 
like to make two points.
    Sequestration threatens damaging cuts for New Mexico's 
national labs, military facilities, and border security. If 
implemented, those cuts will be very damaging, I believe, to 
our national security.
    Sequestration will also be very damaging to some of New 
Mexico's most vulnerable: children in need of a quality 
education, rural communities struggling with housing, and 
homeless veterans seeking emergency shelter.

                         NATIONAL SECURITY LABS

    Mr. Werfel and Mr. Carter, my first question goes to you. 
New Mexico's national security laboratories, Los Alamos and 
Sandia, work to support our stockpile stewardship mission. I 
believe the sequester's across-the-board cuts, including the 
9.4-percent cut facing the National Nuclear Security 
Administration (NNSA) weapons account, will hamper important 
stockpile stewardship work across the country.
    Needless to say, there is absolutely zero tolerance for 
mistakes when dealing with nuclear weapons. Are you concerned 
that sequestration cuts pose unacceptable risks to the NNSA? 
And is DOD concerned about the impacts on its strategic 
missions as a result?
    Mr. Werfel, why don't you go first on that?
    Mr. Werfel. I will start, because, as you mentioned, I 
think NNSA does fall within the defense category in the 
sequester; therefore, it faces roughly an 8-percent cut, which 
will be applied, as I understand it, evenly across all NNSA 
labs and plants.
    You mentioned Sandia. It is my understanding that critical 
milestones will be delayed for that lab as a result of the 
sequester. For Los Alamos, we are looking at $46 million cut to 
procurement, hiring freezes, and furlough days for certain 
employees.
    So absolutely, there is significant concern. There is 
concern across Government.

                NATIONAL NUCLEAR SECURITY ADMINISTRATION

    Your question about NNSA, I think it is not safe from the 
impacts of the sequester.
    Senator Udall. Mr. Carter.
    Dr. Carter. We are the customer for NNSA. We are the ones 
who depend upon them making a safe, secure, and reliable 
nuclear arsenal that we can put aboard our delivery system. So 
I am concerned about it.
    It, as Mr. Werfel says, at a minimum, stretches out all the 
stockpile life extension programs, which is not good, because 
it makes them, first of all, more expensive, and second of all, 
we don't have time in many of those cases.
    So I am concerned about it. Very much concerned about it.
    Senator Udall. Thank you for those answers.
    I am going to do everything I can, if we go into this 
sequester, to make sure that we protect these national 
laboratories that are real jewels.

             IMPACTS ON NEW MEXICO'S MILITARY INSTALLATIONS

    Mr. Carter, New Mexico's military installations, Cannon Air 
Force Base, Kirtland Air Force Base, Holloman Air Force Base, 
White Sands Missile Range, and part of Fort Bliss, are unique 
to our Nation's national security objectives due to New 
Mexico's large, unencumbered airspace, unique geography, and 
intellectual capital.
    The sequester will impact long-term readiness, as well as 
future defense research, in favor of a reckless plan to reduce 
the budget. And I think you have talked a little bit about 
that.
    Are you concerned with the impacts of the sequester on 
these New Mexico installations? What are the near- and short-
term consequences of reduced training at Air Force bases, and 
the reduction of research and development at White Sands, the 
Air Force research lab, and similar test ranges?
    Dr. Carter. In the near term, you will see, in the final 
months of this year, a sharp curtailment of range activity and 
other training activities. We don't have any choice about that. 
We are just simply going to run out of money in those 
operations and maintenance accounts.
    In the long run, if the reductions in budgetary authority 
forecast, which in our case is around $500 billion over 10 
years, not all of these facilities can survive.
    We asked last year for base realignment and closure (BRAC) 
authority even to make the huge adjustment we are already 
making. The $487 billion that we absorbed last year, that $487 
billion, those cuts extend over 10 years. And you can't keep 
the tooth if you are not able to cut the tail. So inevitably, 
some of these installations are going to have to be reduced.
    So both in the near term and far term, it will have an 
effect on those installations. We just don't have any choice.
    Senator Udall. Mr. Carter, you mentioned in your 
testimony--and I am wrapping up, Madam Chair--you mentioned in 
your testimony about small business being hurt by this. I think 
that could be a real impact in New Mexico and across the 
country.
    Thank you, Madam Chair.

                  STATEMENT OF SENATOR LISA MURKOWSKI

    Senator Murkowski. Thank you, Madam Chairman.
    Chairwoman Mikulski. Senator Murkowski, you are also 
serving as ranking member on Interior; is that right?
    Senator Murkowski. Yes, ma'am, that is correct. Looking 
forward to it with great enthusiasm.
    Secretary Carter, you mentioned that the wolf is at our 
door on this one. I am worried that the wolf is already inside. 
We are all trying to acknowledge we don't like sequestration, 
it is blunt, it is ugly, and it just doesn't work. But it does 
force us to deal with budget cuts. It forces us to deal with a 
$16.4 trillion debt.
    So whether we are dealing with sequestration or whether we 
are just dealing with budget cuts, it does force 
prioritization. And if we are not working every day as 
lawmakers, or you within the administration, to make sure that 
we are easing the pain of these cuts wherever they may fall, 
whether it is within our defense, or housing, or education, 
then we are not doing right by our constituents, we are not 
doing right by our country.
    I want to speak very quickly to a frustration that I have 
where I am seeing budgetary decisions that are just not making 
sense at a time when we are forced to prioritize. We are forced 
to be looking to spending reductions.
    This is what is going on my State of Alaska with a backdoor 
BRAC run on Eielson Air Force Base. We are essentially looking 
at our fiscal year 2012 continuing resolution levels that we 
recognize, and you have pointed out, are very problematic. We 
have the possibility of sequestration. We have this committee's 
direction to the Air Force to postpone force structure 
proposals until the Commission on the Structure of the Air 
Force reports back in 2014.
    We have a first-year cost on this proposal on Eielson of 
$5.6 million, and the fact that essentially the same move was 
rejected back in 2005, yet the Air Force is moving forward with 
this plan.
    Just last week they held four scoping meetings in Alaska, 
despite the Department's ban on nonmission critical travel.
    So I look at this and I'm saying, wait a minute. We are 
supposed to be prioritizing, and yet you have the Department 
moving forward with a plan that costs money rather than taking 
an enterprise-wide look at all our Air Force bases in 
determining where force structure reductions should fall. So 
you can probably sense my frustration there.

                               PRIORITIES

    But when we are talking about priorities, it needs to make 
sense all the way, not just beyond March 1.
    Can you comment on that, please?
    Dr. Carter. You are absolutely right. It does have to make 
sense beyond March 1.
    And you are also correct that we are paying a huge long-
term price for the short-term disruptions that we are 
experiencing right now.
    I am already doing things in the Department to curb 
spending. So in that sense, the wolf is in the door.
    And that is another reason why short-term fixes don't 
really help us out much. They don't help our industry out very 
much, and they don't give us the stability that we need.
    To the particular point you make, that is a very legitimate 
issue that actually precedes and is somewhat independent of the 
sequester. That is, it was an issue we had last year before the 
sequester came in. It is a matter of priorities. I understand 
that there was disagreement this year about a number of the 
adjustments that the Air Force made, and that is why there is 
going to be a Commission on the Future of the Air Force. We 
understand that. We are absolutely committed to working with 
that commission.
    And the Air Force understands that, and we are not going to 
take actions that contravene the decisions that were made 
earlier this year.
    Senator Murkowski. Well, I would certainly hope that we are 
looking long term to our critical military assets and don't 
make short-term decisions based on numbers that simply don't 
hold up.
    Let me ask Mr. Werfel----
    Dr. Carter. May I just comment on that point, because that 
is another very----
    Senator Murkowski. Yes, but I do need to get to Mr. Werfel 
before my time expires.
    Dr. Carter. Well, I was just going to say, we are making 
decisions. I mean, sequestration does force decisions that 
don't make any sense, as does the continuing resolution.
    Senator Murkowski. Mr. Werfel, let me ask you, one of the 
most important Federal responsibilities across our Nation is 
the trust responsibilities for American Indians, Alaska 
natives.

                         INDIAN HEALTH SERVICES

    One of the programs that we are dealing with within the 
Indian Health Service (IHS) is a trust responsibility to these 
native people. Now, within the Veterans Administration (VA), 
within Medicaid, they are off the table in terms of cuts.
    So, my question to you is, given the critical nature of the 
healthcare services to our tribes, what actions is IHS taking 
to minimize the impacts of the delivery of healthcare on the 
Indian community, given the trust responsibility that is 
different than any of the other responsibilities that we have 
out there, other than perhaps our veterans?
    And, Madam Chairman, I realize that I have gone over my 
time, and I do apologize.
    Mr. Werfel. Well, Senator Murkowski, I think you are 
pointing out that the impacts of the sequester are beyond the 
bounds of the witnesses here. They impact a broad range of 
programs and activities, and programs that serve Native 
Americans are no different.
    As you mentioned, IHS is subject to the sequester. On the 
mandatory side, it is capped at 2 percent, but it is not on the 
discretionary side.
    What we have asked each agency to do, whether it is an 
agency that is serving Native American populations or 
otherwise, is to figure out how to implement the sequester in a 
way that is going to best serve mission, balancing all other 
priorities.
    And one of the things we have come to the conclusion, and 
you can draw that conclusion from the testimony today, there is 
no way to fully protect mission here, because the 
indiscriminate and abrupt cuts, as they were designed, are 
enormously disruptive.
    But with respect to programs that are serving Native 
Americans, I will take your question back, and we can work with 
those agencies to get you a fuller answer.
    But what I can say is, it is disruptive, and we are really 
asking the agencies to do everything they can to minimize that 
disruption. But that is not going to be possible if we go 
forward with this sequester.
    Senator Murkowski. Thank you, Madam Chair.
    Chairwoman Mikulski. And that is really the point of what 
we are getting to, which is, no matter what, there is no good 
way out of this. There are no good choices.
    We are going to go now to Senator Feinstein, but before we 
do, just a couple of points. Some members had to leave before 
they got to ask a question.
    I note that Senator Kirk had to leave, and we really wanted 
to give him a very affectionate, actually, welcome back. If he 
has a statement, we will put it into the record.
    Senator Leahy had to leave. We will put his statement into 
the record, and extend those courtesies.
    Now, just to give a sense of the lineup, it will be 
Feinstein, Blunt, Landrieu, Boozman, and Begich, then Moran and 
then Shaheen and then we will be into kind of our moving along. 
So right now, it is Feinstein, then Blunt, then Landrieu, then 
Boozman, then Begich. Okay?
    So, you will be next, Senator.
    Senator Feinstein.

                 STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Thank you very much, Madam Chairman.
    I want to just begin with something that you said. I think 
we are already feeling the effects of sequestration in 
imprecision and economic uncertainty. I find it really 
beginning to happen in California.
    California will lose the most jobs by far of any State. 
George Mason University did a study. They predicted that we 
would lose 225,544 jobs, of which 135,209, Ash Carter, are from 
your Department.
    So what is happening is, with the knowledge that there is 
going to be 10 years of this, people are now beginning to make 
decisions out there, subcontractors, contractors, to cut staff 
and to be ready.
    And so I happen to believe, next to a major war, 
economically, it is the worst thing that could happen for this 
country, and we should end it.
    Madam Secretary of DHS, I want to thank you. You were the 
most precise of everybody as to what we can expect.
    I do energy and water. We tried to find out, what does this 
mean for the labs? Our staff has spent a lot of time trying to 
find out, where are the cuts? Who is going to suffer the cuts? 
It is like a ghost with nothing under it.
    So everybody is concerned about what is going to happen to 
them, and we can give no one a straight answer. It is a bad, 
bad phenomenon, and it ought to end before it really catches 
hold of America and does a great deal of damage.
    Let me ask you about one thing, and this is for California. 
It happens to involve the only shipyard on the west coast, 
National Steel and Shipbuilding Company (NASSCO) in San Diego, 
3,500 jobs. We worked very hard to achieve long-lead financing 
for three mobile platform ships. We have that financing.

                NATIONAL STEEL AND SHIPBUILDING COMPANY

    What, exactly, will happen to NASSCO and the long-lead 
financing, Deputy Secretary Carter?
    Dr. Carter. Well, not good things. I am concerned about it.

                         CONTINUING RESOLUTION

    First of all, there is the continuing resolution problem, 
which I mentioned earlier, with simply having the authority to 
proceed on the basis that we planned in shipbuilding. But the 
second is the sequester and the reduction in budgetary caps 
over the long run, and that is going to have a huge effect on 
our shipbuilding industry.
    And NASSCO is especially vulnerable in that regard. I was 
just there a couple of months ago, and I am very concerned 
about that. There is no question there will be a major 
restructuring in shipbuilding as a result. I think we will get 
through the continuing resolution thing--it is very 
inefficient--but as a result of the sequester and the cuts down 
the road. And that is just one part of our defense.

                          LONG-LEAD FINANCING

    Senator Feinstein. Will it lose long-lead financing?
    Dr. Carter. It depends on whether the continuing resolution 
issue is resolved or not. If that is resolved, then there is a 
chance we can do that.
    Senator Feinstein. Well, this is exactly what I am talking 
about, in terms of--it is not your fault--but imprecision, 
uncertainty, people have to make decisions with respect to 
contracts, and so they make them negatively.
    Intelligence, it is my understanding a number of agencies, 
National Security Agency, National Geospatial-Intelligence 
Agency, National Reconnaissance Office, Defense Intelligence 
Agency, all fall under the DOD budget. It is my understanding 
that Director Clapper has asked that he be involved in these 
decisions. Have you worked out an agreement with him?
    Dr. Carter. Yes, yes. No, he and I talk all the time.
    By the way, I do with all our managers, our service chiefs, 
our installation heads. There is just a huge amount of detail 
here, and a huge number of management decisions that we are 
trying to make in the uncertainty that you mentioned.
    And that is all mirrored in our industry as well. So at 
NASSCO, are they going to assume that the continuing resolution 
is lifted or not? Are we going to assume that? I don't know.
    So we do tend to make very conservative decisions, which, 
if this all goes away, we will regret because they will have 
introduced waste, delay, and inefficiency for no reason at all.
    Senator Feinstein. Thank you.
    Thank you, Madam Chairman. Thank you.
    Chairwoman Mikulski. Senator Blunt, and I understand you 
are now the ranking member on the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Subcommittee.
    Senator Blunt. That is right. Thank you, Chairman.
    Chairwoman Mikulski. We have a good lineup. This is great.

                     STATEMENT OF SENATOR ROY BLUNT

    Senator Blunt. Thank you, and thank you for the time.
    We keep talking about the fact that we can take some 
balanced approach between spending cuts and revenues. I will 
tell you, I am confused by the idea that there appear to be no 
spending cuts that can be taken.
    We have $60 billion in new revenue this year that we 
wouldn't have had last year, but we can't find $85 billion 
worth of cuts.
    Now, I will accept the idea that nobody told anybody that 
this sequester was actually going to happen, even though it was 
in the law. I had a chance to be in a hearing with Secretary 
Carter this week, and I asked him, what number did you submit 
for the OMB budget planning for this year? And he said that 
they submitted a number based on a presequester number.
    Is that right, Secretary?
    Dr. Carter. That is right. The fiscal year 2014 budget 
preparation is based on that assumption.
    Senator Blunt. And did you submit any alternative for what 
happens if you have to deal with the sequester number?
    Dr. Carter. No, we have not done that.
    Senator Blunt. So once again, we are not prioritizing. We 
are saying this is taking us by surprise. We don't have time to 
cut, but we are apparently not making any plan to take a cut 
next year either.
    Secretary Napolitano, what number did you submit, do you 
know? For the budget the President is now putting together?

                        FISCAL YEAR 2014 BUDGET

    Secretary Napolitano. The fiscal year 2014 budget?
    Senator Blunt. Yes.
    Secretary Napolitano. The fiscal year 2014 budget, I think 
the guidance was to go 5 percent less than the fiscal year 2012 
enacted level. But I will have to double check that.
    Senator Blunt. Why don't we just ask? What was the guidance 
from OMB on the fiscal year 2014 budget?
    Mr. Werfel. I think that is correct. It was 5 percent less 
than the net discretionary total provided for agencies for 
fiscal year 2014 in the fiscal year 2013 budget.
    And, you know, just to respond in real time to one of your 
earlier points, what is important to remember is the BCA had 
within it roughly $1 trillion in discretionary spending cuts 
that are imposed through spending caps. Those were embodied in 
the President's fiscal year 2013 budget.
    Senator Blunt. Right.
    Mr. Werfel. And that obviously puts enormous budgetary 
pressure on our agencies. It requires us to make tough choices.
    The challenge, right now, is $85 billion over 7 months. And 
the way it is done so indiscriminately, across every program, 
project, and activity, that is the challenge that you can plan 
for but you can't avoid the harmful impacts of.
    Senator Blunt. Well, I accept that. But the idea that we 
need to cut spending, but it needs to be a balanced approach 
seems to me to fly in the face of the idea that nobody has any 
idea how to reach this goal even if one-half of it is revenue. 
And it seems to me that we are not planning that very well 
either.

                  SEQUESTER EFFECT ON IMPACT AID FUNDS

    I want to ask a couple of questions. Secretary Donovan, you 
said, just to clarify for me, on a reservation funding issue, 
you said our funding would be cut by one-third to a specific 
reservation. I assume that is the payment in lieu of taxes 
money? And why would it be one-third? You are trying to find 5 
percent doubled in the end of the year? I could see 10 percent. 
You can get back to me if you don't know why it is one-third.
    Secretary Donovan. I am sorry if you could just be--I am 
not clear.
    Senator Blunt. In your testimony, you mentioned a specific 
education funding in a reservation that would be cut by one-
third in the remainder of this year. Do you have any reason----
    Secretary Donovan. I believe it was in Secretary Duncan's.
    Senator Blunt. I am sorry. I meant Secretary Duncan.
    Secretary Duncan. It is all Secretary Donovan's fault.
    Senator Blunt. I am inclined to blame Secretary Donovan.
    But no, you said this, Secretary Duncan.

                            IMPACT AID MONEY

    Secretary Duncan. Yes, Sir. This is Impact Aid. This is aid 
that goes out to Native American areas. It goes out to areas 
where there are military families and bases. We would have to 
cut this money right away.
    And we disproportionately fund those areas because there is 
a lack of property taxes. And in that specific example, one-
third of that district's budget, their school budget, comes 
from Impact Aid funds.
    Senator Blunt. So the combination of the cuts a normal 
district would take plus the sort of payment in lieu of tax 
revenue, the Impact Aid money that we give.
    Secretary Duncan. Right. And again, this would happen now. 
This is not down the road.
    Senator Blunt. It would be 5 percent of one-third.
    On another issue, I am going to ask an OMB question here, 
Mr. Werfel. And we told you we might ask about this.
    I have some correspondence here from the Department of 
Agriculture (USDA), the subcommittee that Senator Pryor and I 
will be working on the Agriculture, Rural Development, Food and 
Drug Administration, and Related Agencies Subcommittee, on 
questions about onsite inspectors, which if they don't show up 
in a meat processing facility, that facility can't open. You 
know, other kinds of processing, the Food and Drug 
Administration (FDA) can come by occasionally, and that doesn't 
really impact whether the plant can be open or not. But if the 
USDA inspector doesn't show up, the plant can't open.

                           ONSITE INSPECTORS

    Is there any way to prioritize those kinds of individuals 
showing up so 100 other workers or 1,000 other workers can show 
up that day?
    Mr. Werfel. Unfortunately, I don't think there is, Senator. 
The way the budget is structured for the Food Safety Inspection 
Service at USDA is that 88 percent of their total funding is 
spent on salaries and benefits for frontline personnel that are 
doing the very inspections you refer to.
    So it becomes a math issue, ultimately. They are going to 
get a certain amount of budget that, if we hit the sequester, 
will be canceled. And there is no way in which to find other 
sources of funds, because 88 percent of the entire budget are 
those very people that need to be at those meat plants doing 
that inspection to keep them open.
    So this is one of the very tangible and clear and 
significant impacts of the sequester, is that this division 
within USDA will not be able to make its core mission of 
sending the inspectors to these locations. And, therefore, 
under appropriate laws and regulations, there will be stoppages 
of work within those areas. So it is a very serious concern.
    Senator Blunt. Well, one of the questions we will be 
asking, chairman, will be, how do you prioritize the core 
mission and the legal requirement to be at that Purdue facility 
or that whatever packing facility they need to be at, and we 
will be asking that.

                   STATEMENT OF SENATOR MARY LANDRIEU

    Senator Landrieu. Madam Chair, thank you so much for your 
leadership. I couldn't think of a better person to be in that 
chair to help us address the challenges that are ahead of us. 
And I look forward to doing my part to work with you and the 
ranking member.
    One of my colleagues last week made an observation that I 
think is worth repeating today, when he said, offering up 
flexibility, which is what some of my colleagues are offering 
to deal with the sequester, is like giving the passengers of 
the Titanic  an option after they hit the iceberg as to what 
level or deck they would like to relocate. And I think that is 
very apt.
    Number two, I do think our committee would be well-advised 
to deal in reality. We have mentioned that word several times, 
the reality of the situation. Why is it not that some of my 
colleagues on the other side will acknowledge the reality that 
the revenues coming into the Federal Government are the lowest 
level since President Eisenhower was the President.
    What is it about that reality that the other side of the 
aisle will not embrace? Is it that they don't believe the fact? 
Do they disagree with that fact? Do they have some other facts 
to put on the table? Because if they do, I will listen to that. 
I have not heard anyone question that.
    So that is a fact I would like to start with, because it 
helps us to frame the debate, which is, we cannot rearrange the 
passengers on the Titanic  and suggest that we are doing 
anybody a favor. We have to bring more revenues.
    And $600 million, to my friend from Missouri, $600 billion 
is not enough. We have a $4 trillion problem. We have already 
put cuts, cuts to spending, that some people think is too high. 
I will agree that it is in some areas. We have already done 
$1.2 trillion.
    Does the other side expect us to do--what is that?--$2.8 
trillion more?
    What revenues are going to come? That is the solution that 
we are looking for.
    Now, let me ask a question to Secretary Napolitano, because 
the same ones that argue for no new revenue also come to my 
subcommittee and demand that I double the number of border 
agents in the DHS budget. So I have done that.
    I have doubled the number of border agents from 9,000 to 
21,000.
    We have built 651 miles of fence, which is one-third of the 
southern border, which is 2,000 miles. That is not counting the 
Canadian border, the eastern border with all the ports, the 
western border. This is a land border.
    We have apprehended 1.2 million illegal people coming 
across the border from 1.2. It is down to 3.6. We have added 
money at the request of members to do this, and now these same 
members won't help us find additional money.
    So, Secretary Napolitano, please, again, tell us what is 
going to happen along our southern border, because you were the 
Governor of Arizona, you should know, if the sequester goes 
into effect?
    Secretary Napolitano. Well, in fact, I am having a little 
bit of an out-of-body experience, because yesterday I was 
before the Senate Judiciary Committee on immigration reform, 
and there was a lot of pressing about why we aren't doing more 
at the border.

                             BORDER PATROL

    The plain fact of the matter is, the administration has put 
record amounts of resources at the border. As someone who comes 
from the border, I can say that needs to be sustained and built 
upon.
    I can tell you that under the sequester, our calculations 
are that we will lose in hours, including overtime, 5,000 CBP 
agents over the next year, out of the 21,370 that we actually 
have boots on the ground.
    In terms of staffing at the actual ports of entry, we will 
be looking at reductions of--well, furloughs of 12 to 14 days 
for every port officer working on a port. We are going to be 
looking at not being able to invest in the technology that is 
so important to make the most out of the boots on the ground we 
have at the border.
    So we are looking at longer wait times, less security 
between the ports of entry. And a third part is that ICE, which 
does interior enforcement, will not be able to meet even its 
congressionally mandated level of detention beds.
    Senator Landrieu. Yes, which is 34,000, which is mandated 
by the Congress.
    My next question you will have to answer in writing because 
I have 10 seconds. For Louisiana, this is very important, but 
also New York, California, and many other places. International 
travel is a driver of our economy, bringing jobs to America. If 
we cannot put the right number of Customs--you know, for 
Customs and Transportation Security Administration (TSA), and 
moving people through the lines, that is going to have a 
terrible impact on our ability to create jobs, good-paying jobs 
for hospitality, international trade.
    I am going to leave the question there and ask you to 
answer it in writing, how States like Louisiana, New York, 
California, and others will be affected at that turn.
    Secretary Napolitano. I can give you that with precision.
    [The information follows:]

                      U.S. Department of Homeland Security,
                                 February 26, 2013, Washington, DC.
Hon. Mary L. Landrieu,
Subcommittee on Homeland Security Appropriations, United States Senate,
Washington, DC.
    Dear Chairman Landrieu: Thank you for your comments during the 
Senate Appropriations Committee's February 14, 2013, hearing on 
sequestration. I share your deep concerns and wanted to follow up on 
your request to identify impacts to our Nation's economy and 
international trade activities that this unprecedented budget reduction 
to the Department of Homeland Security (DHS) would have.
    Sequestration would have significant impacts on our economy, 
including travel, tourism and trade. Reductions mandated under 
sequestration would require furloughs and reduced staffing at our 
Nation's ports of entry and airport security checkpoints, which would 
have serious consequences to the flow of trade and travel throughout 
the country.
    Trade and travel is absolutely essential to our economy. According 
to the U.S. Travel Association, one new American job is created for 
every 33 travelers arriving from overseas. DHS's U.S. Customs and 
Border Protection (CBP) staff and operate 329 ports of entry across the 
country, welcoming travelers and facilitating the flow of goods 
essential to our economy. Each day, almost one million people arrive at 
these ports of entry by land, sea, and air. In fiscal year 2012 alone, 
DHS processed more than 350 million travelers, including more than 98 
million international air travelers as well as $2.3 trillion worth of 
trade.
    The automatic budget reductions that could be implemented on March 
1, 2013 would be disruptive and destructive to our Nation's security 
and economy. At major gateway airports average wait times will increase 
by 30-50 percent. At our busiest airports, such as John F. Kennedy 
International. Los Angeles International, and Chicago O'Hare, peak wait 
times could grow to over four hours or more during the summer travel 
season. Such delays would affect air travel significantly, potentially 
causing thousands of passengers to miss flights with economic 
consequences at the local, national, and international levels. New 
flights that bring in hundreds of millions of dollars to the U.S. 
economy would be delayed or potentially denied due to reduced staffing.
    Sequestration will also impact our Nation's land borders. For 
example, daily peak wait times at the El Paso Bridge of the Americas 
would increase from 1 hour to over 3 hours.
    Peak wait times at the Port of Buffalo Lewiston Bridge would 
increase by nearly 6 hours, significantly slowing travel across the 
northern border. Midsize and smaller ports would experience constrained 
hours of operation, affecting local cross-border communities.
    At our seaports, delays in container examinations would increase to 
up to 5 days, resulting in increased costs to the trade community and 
reduced availability of consumer goods and raw materials. At cruise 
terminals, processing times could increase to up to 6 hours, causing 
passengers to miss connecting flights, delaying trips, and increasing 
costs.
    Last year. the Transportation Security Administration (TSA) 
screened approximately 640 million people and their carry-on items at 
checkpoints, and more than 426 million checked bags. DHS also screened 
over 629 million pounds of cargo with TSA proprietary canine teams. 
Sequestration would require TSA to reduce overtime and not backfill 
vacant Transportation Security Officer positions, leading to increases 
in airline passenger wait times by as much as an hour during peak 
travel periods at our Nation's largest and busiest airports.
    Additional effects of sequestration would be felt by the American 
public from reductions to U.S. Coast Guard (USCG) fisheries law 
enforcement, aids to navigation, and other important activities that 
help ensure the safe flow of commerce along U.S. waterways and the 
protection of natural resources. These reductions will impact the Coast 
Guard's ability to respond to issues impacting the U.S. Marine 
Transportation System that generates more than $3.2 trillion of total 
economic activity, moves 78 percent of foreign trade, and sustains over 
13 million jobs each year. USCG also will have to reduce its patrols of 
the 3.4 million square mile U.S. Exclusive Economic Zone--impacting 
fisheries enforcement and resulting in more incursions by foreign 
vessels, exploiting our natural resources. Reduced Coast Guard presence 
protecting the U.S. fishing industry would impact an industry which 
generates $32 billion in income and supports over one million jobs 
annually.
    The Department appreciates the strong support it has received from 
Congress over the past 10 years. As we approach March 1, I urge 
Congress to act to prevent sequestration and ensure that DHS can 
continue to meet evolving threats and maintain the security of our 
Nation and citizens. Should you have any questions or concerns at any 
time, please do not hesitate to contact me at (202) 282-8203.
            Yours very truly,
                                          Janet Napolitano,
                                                         Secretary.

    Senator Landrieu. Thank you.
    Chairwoman Mikulski. I am going to now turn to Senator 
Boozman.
    But before I do, a couple of quick administrative things. 
Questions are coming up about the fiscal year 2014 
appropriations. I just want to say this about our committee 
that I have discussed with Senator Shelby: We want to deal with 
the sequester. We also want to deal with the issue of the 
continuing resolution versus the omnibus. We don't want a 
Government shutdown. We are working with our House counterparts 
on this. So we don't want that either.
    Also, when the President submits his budget, I am asking my 
subcommittee chairs and my ranking members to move out swiftly 
and smartly to begin their hearings. This committee, though the 
administration is late in submitting its budget to us, is going 
to meet its timeline of holding hearings and being ready for 
markup in late spring and on the floor this summer.
    We are, in this committee, going to make every effort to 
have a regular order and follow the traditions of clock and 
calendar to do that.
    So for all of 2014, we are going to have real hearings. We 
are going to have real debate, real discussion, and a regular 
order.
    And I really want to thank Senator Shelby for the way we 
are working to move this forward.
    Senator Boozman.

                   STATEMENT OF SENATOR JOHN BOOZMAN

    Senator Boozman. Thank you, Madam Chair. It is good to be 
here.
    Mr. Werfel, I think I am correct in stating that VA will be 
exempt.
    Mr. Werfel. That is correct.
    Chairwoman Mikulski. Senator Boozman, use your microphone. 
It is hard to hear you, Sir.
    Senator Boozman. Okay.
    Chairwoman Mikulski. I think that is better for you.
    Senator Boozman. Yes, that is better. That is how it is 
when you are the low man on the totem pole.
    Not much equipment.
    Chairwoman Mikulski. Or the shortest person in the room.
    Senator Boozman. We appreciate you all being here.
    Again, you know, the House has acted a couple times. They 
have sent a couple bills over. The Senate hadn't acted; the 
President hadn't acted. And with the timeframe that we have 
going forward, it appears that, at least for a short period, we 
are going to have to work through this.
    So what I would like to do is just ask about a couple 
things. Again, a lot of veterans' families have contacted us. 
They are concerned.
    So for the record, can you tell us that veterans' benefits 
will not be affected, Mr. Werfel?

                           VETERANS BENEFITS

    Mr. Werfel. Senator, for those that are funded through VA, 
they are explicitly exempt under the law. But there are certain 
veteran services that are funded out of other accounts and in 
other agencies that would not be exempt and would be affected.
    Senator Boozman. So VA hospitals, things like that, would 
all be exempt?
    Mr. Werfel. That would all be exempt under the sequester.

                          SHORTFALL IN TRICARE

    Senator Boozman. Okay, very good.
    Mr. Carter, in your testimony, you mentioned that DOD is 
investigating ways to reduce the problem of a $3 billion 
shortfall in TRICARE. Can you give us, perhaps, some ways that 
you hope to avoid a problem being there? How you are going to 
make up for the $3 billion? What are the investigations----
    Dr. Carter. We are looking at that. We would like to avoid 
that $2 or $3 billion shortfall causing us to have to stop 
giving care in the last month or so of the year.
    I am going to get back to you in writing, because it is 
very complicated. And to be quite honest, we haven't found a 
way to do it legally yet, but we are working on it. Whatever we 
do, we want to be legal. So if I may, I would like to get back 
to you on that. But we are working on it, because we understand 
the gravity of the problem.
    [The information follows:]

    Sequestration will result in the potential loss of more than $3 
billion in resources from the Defense Health Program in the last half 
of fiscal year 2013. This substantial loss in funds could force us to 
slow or suspend claims payments or to make difficult funding tradeoffs 
to continue paying private sector claims. In order minimize the impact 
on care provided in military treatment facilities and by the private 
sector network, we may be forced to attempt to make disproportionate 
use of Research, Development, Test and Evaluation and Procurement funds 
for healthcare purposes. This means that important research projects 
will be slowed or stopped altogether. Existing medical equipment will 
be used longer with the chance for more breakdowns and increased 
maintenance costs. At some point, equipment becomes obsolete and cannot 
be repaired any longer. These actions, in response to a sequestration, 
will substantially delay the benefits of research projects and will 
drive increased bills for equipment in future years.
    In addition, by focusing all resources on the provision of patient 
care under a sequestration, we will have less funding to address 
medical facility maintenance and the needed restoration and 
modernization projects. As with the use of research funds, this 
mitigation strategy would come with a cost. This will negatively affect 
the healthcare environment and potentially drive substantial bills for 
facility maintenance in the future. While we will continue to fund 
projects that directly affect patient safety or that are emergent in 
nature, we will see a degradation in the aesthetic quality and 
functionality of our medical facilities. This can impact the morale of 
both the medical staff and the patients and can greatly degrade the 
patient's experience of healthcare within the military health system. 
It should be noted that many of our facilities are older and require 
substantial upkeep. To delay these medical facility projects 
exacerbates the problem and ultimately the medical staff and more 
concerning, the patients, suffer the consequences. This is not a 
sustainable strategy.
    Although we must address the challenges presented, it is not clear 
that these strategies to mitigate the effects of sequestration on 
military healthcare will work. Their viability depends on decisions 
regarding appropriations bills and other legal issues. Therefore, we 
still do not feel that we have a firm strategy to offset military 
health care problems caused by sequestration. Indeed, the only sure way 
to offset them would be to detrigger sequestration.

    Senator Boozman. I appreciate that. I think everyone on the 
committee, that is something we would be very, very concerned 
about.
    Mr. Werfel, in the past when budget years were tight, the 
Federal Aviation Administration (FAA) has proposed reductions 
in contract towers and flight service stations, other services 
to small cities and rural areas. Would you implement these type 
of reductions? Are these the type of reductions that we are 
going to see as a result of sequestration that would perhaps 
disproportionately affect rural America versus urban America?

               FEDERAL AVIATION ADMINISTRATION DISRUPTION

    Mr. Werfel. Well, I think there are definitely risks with 
respect to FAA, and I am glad you raise the question. FAA is 
going to face a cut of roughly $600 million under the 
sequester. A vast majority of their 47,000 employees will be 
furloughed for 1 day per pay period for the rest of the year. 
And as importantly, this is going to reduce air traffic levels 
across the country, causing delays and disruptions for all 
travelers.
    And to your question, it is my understanding that, yes, 
there will be a curtailment of service at low-activity 
airports, which typically reside in rural locations. So they 
will be impacted and feel the effect of the sequester.
    Senator Boozman. Okay, very good.

             AIR FORCE CUTS FACILITIES MAINTENANCE PROJECTS

    Mr. Carter, you mentioned that the Air Force plans to cut 
facilities maintenance projects by about one-half, including 
cuts to 189 projects at 55 installations in 26 States. Do you 
have a list of the----
    Dr. Carter. Absolutely, I can provide you with that level 
of detail. The numbers are correct, and I can give you 
exactly--it is basically everywhere.
    [The information follows:]

                                                          AIR FORCE DEFERRED FSRM PROJECT LIST
--------------------------------------------------------------------------------------------------------------------------------------------------------
 State             Fund                     MAJCOM                     Base              Project number            Project title               Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
     AK Demo                     AFSPC...................  CLEAR AIR FORCE STATION.         DXEB132001   DECONSTRUCT TECHNICAL SITE,          $400,000
                                                                                                          PHASE A.
                                 PACAF...................  EIELSON AFB.............         FTQW102201   Demo Old Community Center             480,000
                                                                                                          (B5226).
        Energy                   PACAF...................  CAPE NEWENHAM LONG RANGE         DBST100005   UPGRADE LIGHTING, SITEWIDE...         427,235
                                                            RADAR.
                                                           EIELSON AFB.............         FTQW061032   Replace Wooden Overhead Doors         400,000
                                                                                            FTQW121506   Energy Cons: Install Thermal          400,000
                                                                                                          Equalizers P2 (MULTIPLE).
                                                                                            FTQW121508   Energy Cons: Repair HVAC              450,000
                                                                                                          System Components (1148 and
                                                                                                          1151).
                                                                                            FTQW131504   Energy Cons: Repair Building          350,000
                                                                                                          Envelope and HVAC (Multiple).
                                                           ELMENDORF AFB...........         FXSB111755   ENERGY OUTDOOR LED SYSTEM....       1,995,417
                                                                                            FXSB121761   REPAIR HVAC SYSTEMS PHASE II        1,941,000
                                                                                                          MULTIPLE FACILITY.
                                                                                            FXSB121762   REPAIR REPLACE LIGHTING               738,150
                                                                                                          MULTIPLE FACILITY.
        R&M                      AFISRA..................  ELMENDORF AFB...........         FXSB112204   Replace Air Handlers RM B2/           350,000
                                                                                                          110, Building 18220.
                                 PACAF...................  ELMENDORF AFB...........         FXSB062004   REPAIR PART TAXIWAY N, ALL          1,100,000
                                                                                                          TAXIWAY Q, AMOPS APRON AND
                                                                                                          RAMP N.
                                                                                            HJZH111076   RENOVATE UPGRADE FIRE STATION       3,000,000
                                                                                                          4 BUILDING 654.
                                                                                                                                       -----------------
                                                                                                               AK Total...............      12,031,802
                                                                                                                                       =================
     AL Demo                     AETC....................  MAXWELL AFB.............        JUBJ200302D   DEMO FALCONS NEST BUILDING            450,000
                                                                                                          302.
        Energy                   AETC....................  MAXWELL AFB.............         PNQS114398   REPL HVAC BOILERS, BUILDINGS          395,000
                                                                                                          804, 1404.
        R&M                      AETC....................  MAXWELL AFB.............         PNQS053554   REPR/UPGR HVAC (PH 2),              1,500,000
                                                                                                          BUILDING 844.
        Sust                     AETC....................  MAXWELL AFB.............         PNQS045274   Replace HVAC System, Holm           5,400,000
                                                                                                          Center B500.
                                                                                                                                       -----------------
                                                                                                               AL Total...............       7,745,000
                                                                                                                                       =================
     AR R&M                      AMC.....................  LITTLEROCK AFB..........         NKAK101041   REPAIR UPGRADE FIRE TRAINING          480,000
                                                                                                          FACILITY.
                                                                                            NKAK121078   REPAIR CONVERT HANGAR 222           1,700,000
                                                                                                          ELECTRICAL/MECHANICAL
                                                                                                          SYSTEMS.
                                                                                                                                       -----------------
                                                                                                               AR Total...............       2,180,000
                                                                                                                                       =================
     AZ Energy                   ACC.....................  DAVIS MONTHAN AFB.......         FBNV130003   Rpr (Replace) High Bay                137,566
                                                                                                          Relamp, Multiple Facilities.
                                                                                            FBNV130004   Rpr (Sustain) Parking Lot             693,000
                                                                                                          Lighting.
                                                                                            FBNV130005   Rpr (Replace) Street Lighting         153,937
                                                                                            FBNV130006   Rpr Retro-Commission Multiple         234,607
                                                                                                          Facilities.
                                                                                            FBNV130039   Rpr Low-flow Fixtures,                139,895
                                                                                                          Multiple Facilities.
                                 AETC....................  LUKE AFB................         NUEX110405   ENERGY CONS: INSTALL SOLAR            775,000
                                                                                                          HOT WATER SYSTEMS, MULTIPLE.
                                                                                            NUEX110406   ENERGY CONS: INSTALL LED              290,000
                                                                                                          LIGHTING, MULTIPLE.
        R&M                      ACC.....................  DAVIS MONTHAN AFB.......         FBNV080052   Rpr ATFP Standoff for                 700,000
                                                                                                          Critical Facilities.
                                                                                            FBNV100026   Cns (Add) Rpr (Renovate) CMS        2,550,000
                                                                                                          Facility (5423).
                                                                                            FBNV110022   Rpr U/G Electric, Arizola St.         250,000
                                                                                                                                       -----------------
                                                                                                               AZ Total...............       5,924,005
                                                                                                                                       =================
     CA Demo                     AFMC....................  EDWARDS AFB.............        FSPM111514Q   DEMO EQUIPMENT RESEARCH TEST           17,000
                                                                                                          AFRL B8814.
                                                                                           FSPM111514U   DEMO EQUIPMENT RESEARCH TEST           17,000
                                                                                                          AFRL B8834.
                                                                                           FSPM111514V   DEMO AFRL B9588..............          15,000
                                 AFSPC...................  VANDENBERG AFB..........       XUMU111082O2   Demolish Lodging Office,               80,000
                                                                                                          Building 13005.
                                                                                          XUMU111082O3   Demolish Dorm Postal Office,          100,000
                                                                                                          Building 13222.
                                                                                            XUMU111362   Demo Storage, Facilities 886          120,000
                                                                                                          and 887.
                                                                                            XUYD051209   HLDT--Demolish Oak Mountain            10,000
                                                                                                          Booster Station, Building 98.
                                 AMC.....................  TRAVIS AFB..............         XDAT051087   DEMO BUILDING 253 (ELECTRIC             5,000
                                                                                                          STATION).
                                                                                            XDAT071133   DEMO OLD COMMUNICATION'S               20,000
                                                                                                          MANHOLE.
                                                                                            XDAT071140   DEMO BUILDING 713............          55,000
                                                                                            XDAT101179   DEMO STRM DRN DSPL...........          50,000
                                                                                            XDAT101660   DEMOLISH BUILDING 886........          10,000
                                                                                            XDAT111020   Demo Building 242............         130,000
                                                                                            XDAT111034   Demolish Existing AGE Wash            257,000
                                                                                                          Rack.
                                                                                            XDAT111073   DEMO MWD FACILITY 720........          85,000
                                                                                            XDAT121031   DEMOLISH BUILDING 723........          30,000
        Dorms                    AFMC....................  EDWARDS AFB.............         FSPM121266   RPR DORM B2423...............       6,150,000
        Energy                   ACC.....................  BEALE AFB...............         BAEY120023   REPAIR RETROCOMMISION HVAC            283,000
                                                                                                          SYSTEMS MULTIPLE FACILITIES.
                                                                                            BAEY120063   REPAIR BY REPLACING MOTORS            359,200
                                                                                                          WITH VARIABLE SPEED DRIVES.
                                                                                            BAEY120064   REPAIR INTERIER AND EXTERIOR          196,000
                                                                                                          LIGHTING.
                                                                                            BAEY120065   REPAIR MECHANICAL--HEATING            177,300
                                                                                                          EQUIPMENT--MULTIPLE
                                                                                                          FACILITIES.
                                                                                            BAEY120066   REPAIR FIXTURES (LOW-FLOW)            168,000
                                                                                                          MULTIPLE FACILITIES.
                                 AFMC....................  EDWARDS AFB.............        FSPM081425E   RPR RETROFIT LIGHTING F-16            376,000
                                                                                                          HANGAR B1630.
                                                                                           FSPM121255A   RPR LIGHTING OFFICE AREA AFRL         124,000
                                                                                                          B8424.
                                                                                            FSPM121400   RPR HEAT SOURCE HANGAR TST          1,500,000
                                                                                                          WING B1600.
                                 AFSPC...................  VANDENBERG AFB..........        XUMU111159B   RPR: Energy Program Boiler            567,000
                                                                                                          Enhancements Multiple
                                                                                                          Building.
                                 AMC.....................  TRAVIS AFB..............         XDAT111024   Energy Efficient Exterior             611,322
                                                                                                          Lighting.
        R&M                      AFISRA..................  BEALE AFB...............         BAEY120061   Implement Auto HVAC Power             125,000
                                                                                                          Outage Recovery.
                                 AFMC....................  EDWARDS AFB.............         FSPM061449   RPR FIRE ALARM B8753.........         178,000
                                 AFSPC...................  VANDENBERG AFB..........        XUMU071219C   CNS: Install Traffic Calming          700,000
                                                                                                          at Santa Maria Gate.
                                                                                           XUMU121042B   RPR: Repair Tangair Bridge...       1,950,000
                                                                                           XUMU121092B   CNS: Install Fall Protection           25,000
                                                                                                          at Building 1610.
                                 AMC.....................  TRAVIS AFB..............        XDAT071156C   Repair Antiterrorism                  285,000
                                                                                                          Perimeter Vehicle Denial
                                                                                                          Fencing.
                                                                                            XDAT081072   CONSTRUCT OPPOSING--L FOR              85,151
                                                                                                          NORTH GATE, BUILDING 8999.
                                                                                            XDAT081073   CONSTRUCT OPPOSING--L FOR             249,598
                                                                                                          MAIN GATE, BUILDING 600.
                                                                                            XDAT081074   CONSTRUCT OPPOSING--L FOR              87,202
                                                                                                          HOSP GATE, BUILDING 782.
                                                                                                                                       -----------------
                                                                                                               CA Total...............      15,197,773
                                                                                                                                       =================
     CO Demo                     USAFA...................  USAF ACADEMY............        XQPZ120824B   Demolish Indigenous House--            67,000
                                                                                                          6966 and 6968.
                                                                                           XQPZ120824C   Demolish Indigenous House--            50,000
                                                                                                          9024 and 9026.
        Energy                   AFSPC...................  PETERSON AFB............         TDKA122001   Repair Facilities--Retro-           1,181,500
                                                                                                          commissioning.
                                                                                            TDKA122002   Repair Irrigation Plant Beds.         425,600
                                                           SCHRIEVER AFB...........                  GLENSurvey and Repair Water Line          275,000
                                                                                                          Leaks.
                                                                                                     GLENRepair by Replacing VUH B780,         102,000
                                                                                                          Install Occup Sensors B712--
                                                                                                          Energy.
                                 USAFA...................  USAF ACADEMY............         XQPZ119004   Repair NRG Street and Parking         200,000
                                                                                                          Lighting.
        R&M                      AFSPC...................  CHEYENNE MOUNTAIN AIR            SAXC061051   Construct Sump Drains for             350,000
                                                            STATION.                                      Communication Manholes.
                                                           PETERSON AFB............         MRGD051009   Repair Fire Alarm System.....          70,000
                                                                                            TDKA111082   Repair Base Capacitors.......          35,000
        Sust                     AFSPC...................  CHEYENNE MOUNTAIN AIR            SAXC121023   Repair HVAC Systems, Cheyenne       5,600,000
                                                            STATION.                                      Mountain Complex.
                                                                                                                                       -----------------
                                                                                                               CO Total...............       8,356,100
                                                                                                                                       =================
     DE Energy                   AMC.....................  DOVER AFB...............         FJXT121074   Upgrade Exterior Street, Ramp         595,000
                                                                                                          and Track Lighting.
                                                                                                                                       -----------------
                                                                                                               DE Total...............         595,000
                                                                                                                                       =================
     FL Demo                     ACC.....................  TYNDALL AFB.............                  XLWUDEMOLISH 1 AF ALERT                   124,000
                                                                                                          FACILITIES, B106, 122, 123.
                                 AFMC....................  EGLIN AFB...............         FTFA121029   Demolish Buildings 586, 607,           55,000
                                                                                                          608, and 609--Old Prison
                                                                                                          Buildings.
                                                                                            FTFA121030   Demolish Building 1219--               11,500
                                                                                                          Vehicle Service Rack.
                                                                                            FTFA121031   Demolish Building 8850--                8,900
                                                                                                          Armament Research/Test.
                                                                                          FTFA963045D4   DEMO MULTIPLE FACILITIES DUKE         286,500
                                                                                                          FIELD PH 4.
                                 AFSPC...................  CAPE CANAVERAL AIR FORCE         DBEH081637   DEMOLISH HLDD II MISC                  27,900
                                                            STATION.                                      FACILITIES.
                                                                                            DBEH101751   Demolish Payload Assembly              55,000
                                                                                                          Building.
                                                                                            DBEH121513   Demolish Bottled Gas Storage            1,904
                                                                                                          Rack.
                                                                                            DBEH121547   Demolish AGE Support                  140,000
                                                                                                          Warehouse, Facility 70540.
                                 AMC.....................  MACDILL AFB.............         NVZR100064   DEMO Building 189/CONSOL MXG          700,000
                                                                                                          Functions.
                                                                                            NVZR120146   DEMO Building 373 Conference          100,000
                                                                                                          Room Addition.
        Energy                   ACC.....................  ARBUCKLE AIRFIELD.......         ASPR100107   RPR VAV HVAC UNITS AT HQTS,           120,000
                                                                                                          B29.
                                                           TYNDALL AFB.............                  XLWUIMPROVE BUILDING ENVELOPE....         250,000
                                 AFMC....................  EGLIN AFB...............         FTFA041168   ENERGY: Install Ground Source         232,000
                                                                                                          Heat Pump Buildings 961 and
                                                                                                          2400.
                                                                                            FTFA091075   ENERGY: REPLACE WINDOWS               106,000
                                                                                                          HANGAR 71.
                                                                                            FTFA091127   ENERGY: Install Irrigation            260,000
                                                                                                          Wells to Replace Potable
                                                                                                          Water Irrigation.
                                                                                            FTFA101151   ENERGY: Replace Windows at            262,000
                                                                                                          Various Buildings (4).
                                                                                            FTFA111010   ENERGY: Install Cool Roof             297,000
                                                                                                          Building 1363.
                                                                                            FTFA111093   ENERGY: Install Daylighting           108,000
                                                                                                          Devices at Various Buildings.
                                                                                            FTFA111188   ENERGY: Construct Cool Roof         1,417,000
                                                                                                          Upgrades at Multiple
                                                                                                          Facilities.
                                                                                            FTFA121054   ENERGY: Building 72 Paint             738,000
                                                                                                          Booth--HVAC Modifications.
                                 AFSOC...................  HURLBURT FIELD..........         FTEV121082   NRG--RetroCommission HVAC             178,700
                                                                                                          Systems, Multiple Buildings.
                                 AFSPC...................  PATRICK AFB.............         SXHT111045   Repair/Upgrade Lighting/              211,100
                                                                                                          Controls, Central Various.
                                                                                            SXHT111096   Repair Water Distribution           1,100,000
                                                                                                          System Leaks.
                                 AMC.....................  MACDILL AFB.............         NVZR120044   Basewide Lighting Upgrades...       2,506,859
                                                                                            NVZR120052   CENTCOM Building 565 HVAC             380,100
                                                                                                          Energy Upgrades.
                                                                                            NVZR120126   Retrocommissioning HVAC               831,500
                                                                                                          Multiple Facilities.
        R&M                      ACC.....................  TYNDALL AFB.............                  XLWUREPLACE TOWER, CARRABELLE....       1,400,000
                                 AFMC....................  EGLIN AFB...............         FTFA041889   CORRECT FPD AFFES BUILDING 8.         150,000
                                 AFSOC...................  HURLBURT FIELD..........         FTEV111171   CONSTRUCT COMMERCIAL VEHICLE          725,400
                                                                                                          INSPECTION BUILDING.
                                 AFSPC...................  PATRICK AFB.............         YXTK091812   Repair Electrical                     442,000
                                                                                                          Distribution Line, TLM Hill.
                                 AMC.....................  MACDILL AFB.............         NVZR110157   R&M, Construct Postal                 720,000
                                                                                                          Screening Facility.
                                                                                            NVZR120115   R&M, Florida Keys and                 670,000
                                                                                                          Bayshore Intersection and
                                                                                                          Chevron Park Entrance.
                                                                                            NVZR120116   R&M, Construct Port Tampa             720,000
                                                                                                          Gate Stacking/Inspection
                                                                                                          Lanes.
        Sust                     ACC.....................  TYNDALL AFB.............                  XLWUREP/SLEEVE 1950S MAINS,             7,291,000
                                                                                                          LATRLS, AND MNHLS--MN BASE.
                                                                                                                                       -----------------
                                                                                                               FL Total...............      22,627,363
                                                                                                                                       =================
     GA Demo                     AFMC....................  ROBINS AFB..............         UHHZ090375   DEMOLISH, DORM AM/PP PCS--          1,348,758
                                                                                                          STD, B/792.
        Energy                   ACC.....................  MOODY AFB...............         QSEU122002   RPR Infrared Heaters.........         300,000
                                                                                            QSEU122011   RPR HVAC SYSTEM,                      190,000
                                                                                                          RECOMMISSIONING, MULTIPLE
                                                                                                          FACILITIES.
                                                                                            QSEU122016   Repair EMCS Control Panels,           281,000
                                                                                                          Multiple Facilities.
                                                                                            QSEU139001   Modify HVAC system with split-        203,000
                                                                                                          systems multiple facilities.
                                                                                            QSEU139003   Install/Repair EMCS multi             211,000
                                                                                                          facilities.
                                                                                            QSEU139005   Install economizers and CO2           192,000
                                                                                                          sensors.
                                 AFMC....................  ROBINS AFB..............         UHHZ110247   RPl STRT AND PARKING LOT              107,000
                                                                                                          LIGHT FIXTURES, EXTERIOR AR
                                                                                                          LIGHTING, FACILITY/08150.
                                                                                            UHHZ110420   INSTALL ENERGY SAVING                 145,000
                                                                                                          CONTROLS, BASE RESTAURANT, B/
                                                                                                          166.
                                                                                            UHHZ110536   RPR/INST ENERGY EFFICIENT             548,000
                                                                                                          LIGHTING,.
                                                                                            UHHZ110539   RPR/INST WTR CONSERVATION             190,391
                                                                                                          DEVICES, VARIOUS BUILDINGS.
                                                                                            UHHZ120061   RPR/UPGRD ENERGY CONTROLS,            400,000
                                                                                                          LOG FCLTY DEP OPS, B/300.
        R&M                      AFMC....................  ROBINS AFB..............         UHHZ090492   RPR/RELOCATE ELEC AIR                 570,000
                                                                                                          SWITCHES, AFLD OBSTRUCTION,
                                                                                                          FACILITY 03901.
                                                                                                                                       -----------------
                                                                                                               GA Total...............       4,686,149
                                                                                                                                       =================
     HI R&M                      PACAF...................  HICKAM AFB..............       KNMD091041P4   Repair HQ Building 1102 (HQ        15,000,000
                                                                                                          PACAF)--Ph 4.
                                                                                                                                       -----------------
                                                                                                               HI Total...............      15,000,000
                                                                                                                                       =================
     ID Dorms                    ACC.....................  MOUNTAIN HOME AFB.......         QYZH120053   Repair Flooring, Dorms,                97,200
                                                                                                          Multiple.
        Energy                   ACC.....................  MOUNTAIN HOME AFB.......       QYZH070030P1   Repair, Variable Frequency            192,000
                                                                                                          Drive, Fac 200 and 2314.
                                                                                          QYZH080017P4   REPAIR BUILDING ENVELOPE,             285,000
                                                                                                          FACILITY 205.
                                                                                                                                       -----------------
                                                                                                               ID Total...............         574,200
                                                                                                                                       =================
     IL Demo                     AMC.....................  SCOTT AFB...............         VDYD090155   DEMO WAREHOUSE BUILDING 3270.         175,000
                                                                                            VEJR111243   DEMO OUTER MARKER SITE.......          30,000
        Energy                   AMC.....................  SCOTT AFB...............         VDYD111196   Replace Parking and Street            803,400
                                                                                                          Lights Across Base.
                                                                                            VDYD111212   Replace Chillers 1 and 3, B44         675,200
                                                                                            VDYD121076   Repair Economizer at Data             512,600
                                                                                                          Center, B1575.
        R&M                      AMC.....................  SCOTT AFB...............         VDYD010135   INSTALL WET FIRE SUPPRESSION          110,000
                                                                                                          SYSTEM (FSD II), B54.
                                                                                            VDYD090113   CONSTRUCT LINCOLN'S LANDING           330,000
                                                                                                          PED ACCESS.
                                                                                            VDYD101163   HVAC and Electrical Repairs         2,210,000
                                                                                                          Improve Exterior Lighting,
                                                                                                          B1575.
                                                                                            VDYD111082   MWD Kennel Drainage, Parking          220,000
                                                                                                          and Fence, B5490.
                                                                                            VDYD112001   Repair Flight Simulator,            1,500,000
                                                                                                          Building 5028.
                                                                                                                                       -----------------
                                                                                                               IL Total...............       6,566,200
                                                                                                                                       =================
     KS Energy                   AMC.....................  MCCONNELL AFB...........         PRQE094127   UPGRADE HANGER LIGHTING               351,310
                                                                                                          BUILDING 1107.
                                                                                            PRQE114131   ENERGY CONS: RE-COMMISSION--          551,000
                                                                                                          HVAC UPGRADES MULTIPLE
                                                                                                          FACILITIES.
                                                                                                                                       -----------------
                                                                                                               KS Total...............         902,310
                                                                                                                                       =================
     LA Energy                   AFGSC...................  BARKSDALE AFB...........         AWUB120508   REP DORM EXIT AND STAIRWAY            106,000
                                                                                                          LIGHTING.
                                                                                            AWUB132001   REPAIR BUILDING LIGHTING.....         520,000
        R&M                      AFGSC...................  BARKSDALE AFB...........         AWUB070107   Install high expansion foam         2,000,000
                                                                                                          extinguishing system (B6604).
                                                                                            AWUB130107   Repair Security Fencing for           410,000
                                                                                                          ATSEP and AT/FP.
        Sust                     AFGSC...................  BARKSDALE AFB...........         AWUB120026   Repair Shoulders in Alert           5,400,000
                                                                                                          Area and Transition Section
                                                                                                          Runway.
                                                                                                                                       -----------------
                                                                                                               LA Total...............       8,436,000
                                                                                                                                       =================
     MA Energy                   AFMC....................  HANSCOM AFB.............       MXRD080024A4   Repair Steam and Condensate           854,000
                                                                                                          Lines along Grenier St JB2-
                                                                                                          B1201.
                                                                                          MXRD080024E2   Repair Steam and Condensate           695,000
                                                                                                          Lines Barksdale St JB55-
                                                                                                          B1531.
                                                                                            MXRD083004   REPLACE STEAM AND CONDENSATE        1,048,800
                                                                                                          LINE NEAR MIT/LL.
                                                                                            MXRD100075   Add Efficient Lighting--              186,564
                                                                                                          Multiple Buildings.
                                                                                            MXRD100076   Install Occupancy Sensors,            380,800
                                                                                                          Multiple Buildings.
                                                                                            MXRD100077   Install Lighting Timers,              965,250
                                                                                                          B1624 and B1630.
                                                                                            MXRD100079   Add Efficient Lighting and            633,960
                                                                                                          Lighting Controls, B1614.
                                                                                            MXRD110013   Install LED Lamps, Exterior           304,000
                                                                                                          Lights.
                                                                                            MXRD120045   INSULATE OIL STORAGE TANK 2           240,000
                                                                                                          B1201 CENTRAL PLANT.
                                                                                                                                       -----------------
                                                                                                               MA Total...............       5,308,374
                                                                                                                                       =================
     MD R&M                      AFDW....................  ANDREWS AFB.............       AJXF10154105   (IDC) REPAIR/REPLACE SHOULDER         250,000
                                                                                                          NEAR TWY E6 NEAR BUILDING
                                                                                                          2487.
                                                                                            AJXF111517   DESIGN/REPLACE TAXIWAY SIERRA       8,480,000
                                                                                                          FACILITY 90020.
                                                                                           AJXF111526B   REPAIR/RENOVATE FOR CLOTHING          600,000
                                                                                                          SALES IN MAIN BX BUILDING
                                                                                                          1811.
                                                                                            AJXF121512   CONSTR/INSTALL AUTO SPRINKLER         400,000
                                                                                                          FIRE STATION 2 BUILDING 3464.
                                                                                            AJXF121513   INSTALL AUTO SPRINKLER FIRE           550,000
                                                                                                          STATION 1 BUILDING 1287.
                                                                                                                                       -----------------
                                                                                                               MD Total...............      10,280,000
                                                                                                                                       =================
     MO Demo                     AFGSC...................  WHITEMAN AFB............         YWHG130000   CND: Demolish Airman's Attic,         287,000
                                                                                                          Post Office, B410.
        Energy                   AFGSC...................  WHITEMAN AFB............         YWHG110027   NRG: RETROFIT LIGHTING T12 TO       1,950,888
                                                                                                          T8, PH II.
                                                                                            YWHG120207   NRG: REPAIR STEAM CONDENSATE          557,000
                                                                                                          RETURN SYSTEM.
        Sust                     AFGSC...................  WHITEMAN AFB............         YWHG120004   NRF AFL IDIQ--PV: Repair            5,200,000
                                                                                                          Runway, Taxiway Slabs, and
                                                                                                          Seal Joints.
                                 AFGSC...................  WHITEMAN AFB............         YWHG120031   Replace Controls Systems for        5,500,000
                                                                                                          Electrical Distribution.
                                                                                                                                       -----------------
                                                                                                               MO Total...............      13,494,888
                                                                                                                                       =================
     MS Demo                     AETC....................  COLUMBUS AFB............        EEPZ102020H   DEMO MUNITIONS STORAGE                 12,000
                                                                                                          MAGAZINE B1834.
                                                                                            EEPZ131145   DEMOLISH BUILDING 630                 350,000
                                                                                                          (AIRCRAFT MAINTENANCE
                                                                                                          BUILDING).
                                                           KEESLER AFB.............         MAHG121128   DEMO OF BUILDING 4813........         480,000
                                                                                            MAHG121130   DEMO DORM 4815...............         577,000
        Energy                   AETC....................  COLUMBUS AFB............        EEPZ122020A   AIR FLOW CORRECTION TO B406..         625,000
                                                           KEESLER AFB.............         MAHG111064   INSTALL DEDICATED HEAT                610,000
                                                                                                          RECOVERY CHILLERS CONNER AND
                                                                                                          DAVIS.
                                                                                            MAHG111138   ENERGY--INSTALL DHRCS IN              930,000
                                                                                                          THOMPSON, CODY, AND MATERO.
        R&M                      AETC....................  COLUMBUS AFB............        EEPZ122009A   INSTALL MYLAR/BLAST FILM              200,000
                                                                                                          SECURITY FORCES FACILITY.
                                                                                                                                       -----------------
                                                                                                               MS Total...............       3,784,000
                                                                                                                                       =================
     MT Demo                     AFGSC...................  MALMSTROM AFB...........         NZAS101040   Demolish Building 1192,               120,000
                                                                                                          Family Support Center.
                                                                                            NZAS111004   Demolish Building 1705,               275,000
                                                                                                          Maintenance Contractor
                                                                                                          Facility.
        R&M                      AFGSC...................  MALMSTROM AFB...........         NZAS082005   Repair MAF Security Fence....       1,600,000
                                                                                                                                       -----------------
                                                                                                               MT Total...............       1,995,000
                                                                                                                                       =================
  Multi Energy                   AF Wide.................  TBD.....................  ..................  Automated Metering System....      20,000,000
                                                                                     ..................  SIA..........................      20,000,000
        Utilities                AF Wide.................  TBD.....................  ..................  Future Utilities                   35,119,000
                                                                                                          Privatizations Deals.
                                                                                                                                       -----------------
                                                                                                               Multi Total............      75,119,000
                                                                                                                                       =================
     NC Energy                   ACC.....................  SEYMOUR JOHNSON AFB.....        VKAG111035E   REPAIR EMCS SYSTEMS..........         377,000
                                                                                           VKAG111036E   INSTALL OCCUPANCY SENSORS....         205,000
                                                                                           VKAG111037E   REPAIR BOILER SYSTEMS........         594,700
                                                                                           VKAG111038E   REPAIR HVAC AND DDC, FUEL             425,000
                                                                                                          CELL, BUILDING 4735.
                                                                                           VKAG111039E   REPAIR HVAC AT MULTIPLE               296,000
                                                                                                          BUILDINGS.
                                                                                           VKAG111042E   REPAIR HVAC VIA RETRO-                200,000
                                                                                                          COMMISSIONING.
                                                                                           VKAG121041E   REPAIR HVAC VIA RETRO-                240,000
                                                                                                          COMMISSIONING.
                                                                                           VKAG121045E   REPAIR HVAC CONTROL SYSTEMS,          726,000
                                                                                                          MULTIPLE FACILITIES.
        R&M                      ACC.....................  SEYMOUR JOHNSON AFB.....      VKAG041090A/B   CONSTRUCT/REPAIR F-15E RAMP         1,400,000
                                                                                                          PAVEMENT.
                                                                                            VKAG071054   REPAIR/INSTALL FIRE ALARM/            200,000
                                                                                                          SUPPRESSION, 4CS, BUILDING
                                                                                                          2904.
                                                                                                                                       -----------------
                                                                                                               NC Total...............       4,663,700
                                                                                                                                       =================
     ND Demo                     AFGSC...................  MINOT AFB...............         QJVF080138   Demo Building 775--5CES......         100,000
                                                                                            QJVF080169   Demo 157--Airman's Attic.....         160,000
        Energy                   AFGSC...................  MINOT AFB...............         QJVF110034   Repair HVAC (GSHP)--Building        1,100,000
                                                                                                          437.
                                                                                            QJVF110035   Repair HVAC Control Systems..         900,000
                                                                                            QJVF120052   SERV: Retro Commissioning,            401,250
                                                                                                          Multiple Facilities.
                                                                                            QJVF120053   SERV: Retro Commissioning,            488,300
                                                                                                          Multiple Facilities.
                                                                                            QJVF120076   REPAIR INSULATION AND DOORS         1,033,050
                                                                                                          AIRCRAFT DOCKS--BUILDINGS
                                                                                                          836/837.
                                                                                            QJVF120077   REPAIR INSULATION AND DOORS         1,394,430
                                                                                                          AIRCRAFT DOCKS--BUILDINGS
                                                                                                          836/837.
        R&M                      AFGSC...................  MINOT AFB...............         QJVF100127   Repair Runway 29 End Keel          12,500,000
                                                                                                          Section.
                                 AMC.....................  GRAND FORKS AFB.........         JFSD201139   REPAIR (R&M) FIRE SUPPRESSION         400,000
                                                                                                          BARNES HALL DORM 319.
                                                                                                                                       -----------------
                                                                                                               ND Total...............      18,477,030
                                                                                                                                       =================
     NE Demo                     ACC.....................  OFFUTT AFB..............         SGBP130053   DEMO DORM, B324 SOUTH........       1,800,000
                                                                                            SGBP160005   DEMO COMMUNITY CENTER (113)..         700,000
        Energy                   ACC.....................  OFFUTT AFB..............         SGBP120043   ENERGY UPGRADES, B500........       1,570,000
                                                                                            SGBP120056   ENERGY UPGRADES, B565........         708,000
                                                                                            SGBP130046   ENERGY UPGRADES, B323........         253,000
                                                                                            SGBP130047   ENERGY UPGRADES H WING, B500.       1,035,000
                                                                                            SGBP130048   ENERGY UPGRADES, J WING B500.         882,100
                                                                                            SGBP130054   ENERGY UPGRADES, BOILER RM          1,450,000
                                                                                                          B500.
                                                                                            SGBP130059   RETRO-COMMISSIONING, B4000...         240,000
        R&M                      ACC.....................  OFFUTT AFB..............         SGER130055   RPR UTILITIES, TLF SITE......         125,000
                                 AFISRA..................  OFFUTT AFB..............         SGBP120035   Upgrade Power, Building 578..       1,000,000
        Sust                     ACC.....................  OFFUTT AFB..............         SGBP090036   RPR TXY CHARLIE WEST.........       5,200,000
                                                                                                                                       -----------------
                                                                                                               NE Total...............      14,963,100
                                                                                                                                       =================
     NH Energy                   AFSPC...................  NEW BOSTON AIR FORCE             RNGF131001   Leak Detection and Repair             100,000
                                                            STATION.                                      Water Mains.
                                                                                                                                       -----------------
                                                                                                               NH Total...............         100,000
                                                                                                                                       =================
     NJ Energy                   AMC.....................  MCGUIRE AFB.............                PTFL12HVAC RECOMMISSIONING MCGUIRE          367,000
                                                                                                          VARIOUS FACILITIES.
                                                           NAES LAKEHURST..........                MSBL12HVAC RECOMMISSIONING                  538,991
                                                                                                          LAKEHURST VARIOUS FACILITIES.
        R&M                      AMC.....................  MCGUIRE AFB.............                MSBL11AORI: REPAIR SHOULDER, ALZ          5,450,600
                                                                                                          RUNWAY, LAKEHURST.
                                                                                                   PTFL11INSTALL EMERGENCY GENERATOR            99,000
                                                                                                          AT FIRE STATION 3350.
                                                                                                                                       -----------------
                                                                                                               NJ Total...............       6,455,591
                                                                                                                                       =================
     NM Energy                   ACC.....................  HOLLOMAN AFB............         KWRD109012   INSTALL OCCUPANCY SENSORS IN          370,000
                                                                                                          14 BUILDINGS.
                                                                                            KWRD129001   VARIABLE FREQUENCY DRIVES,            164,195
                                                                                                          B830.
        R&M                      ACC.....................  HOLLOMAN AFB............         KWRD060078   RPR AIRFIELD PRIMARY                4,500,000
                                                                                                          OBSTRUCTIONS AND SIGNAGE.
                                 AFMC....................  KIRTLAND AFB............        MHMV090058B   Repair Critical COMM                3,605,000
                                                                                                          Facilities: B412, B498,
                                                                                                          B20604, and B20449.
                                 AFSOC...................  CANNON AFB..............         CZQZ082000   REPAIR FUEL TANKS, AAFES GAS          950,000
                                                                                                          STATION.
                                                                                                                                       -----------------
                                                                                                               NM Total...............       9,589,195
                                                                                                                                       =================
     NV Energy                   ACC.....................  CREECH AFB..............                   LKTInstall Solar Wall Heating            212,000
                                                                                                          System.
                                                           NELLIS AFB..............         RKMF090018   REPAIR DAYLIGHTING CONTROL            603,000
                                                                                                          SYSTEM.
                                                                                            RKMF120712   Add Building Envelope                 129,000
                                                                                                          Upgrades.
                                                                                            RKMF120716   UPGD Paint Booth HVAC,                264,000
                                                                                                          Building 256, Dock 2.
                                                                                            RKMF120717   INST Daylighting/UPGD                 139,000
                                                                                                          Lighting Systems, Multiple
                                                                                                          Facilities.
                                                                                            RKMF130703   Retro-Commissioning..........         316,366
                                                                                            RKMF130705   Retro-Commissioning..........         364,829
                                                                                                                                       -----------------
                                                                                                               NV Total...............       2,028,195
                                                                                                                                       =================
     OH Demo                     AFMC....................  WRIGHT-PATTERSON AFB....         ZHTV110069   DEMO THRIFT SHOP.............         175,000
        Energy                   AFMC....................  WRIGHT-PATT AFB.........         ZHTV040400   RPL A/C/D SYSTEM PUMPS (HP-5)       1,200,000
                                                                                            ZHTV110044   REPLACE CAULKING/                     117,478
                                                                                                          WEATHERSTRIPPING, MULTIPLE
                                                                                                          FACILITY.
                                                                                            ZHTV110046   RE-INSULATE PIPING/TANKS,             246,000
                                                                                                          MULTIPLE FACILITY.
                                                                                            ZHTV120002   REPLACE WATER LINE ALONG              777,000
                                                                                                          SKYLINE (24056)(W-2).
                                                                                            ZHTV120034   REPLACE AREA B STREET LIGHTS          205,000
                                                                                                          (27134).
                                                                                                                                       -----------------
                                                                                                               OH Total...............       2,720,478
                                                                                                                                       =================
     OK Demo                     AETC....................  ALTUS AFB...............         AGGN121026   DEMO--DEMO FOR CONSOLIDATION,         280,510
                                                                                                          B72.
                                                                                            AGGN121029   DEMO--DEMO FOR CONSOLIDATION,         152,883
                                                                                                          B65.
                                                                                            AGGN121032   DEMO--DEMO FOR CONSOLIDATION,          48,196
                                                                                                          B48.
                                                                                            AGGN121039   DEMO--DEMO FOR CONSOLIDATION,          12,477
                                                                                                          B165.
                                                                                            AGGN121051   DEMO--DEMO FOR CONSOLIDATION,         442,108
                                                                                                          B39.
        Energy                   AETC....................  ALTUS AFB...............         AGGN091092   NRG--REPLACE HVAC AT CLUB,            525,000
                                                                                                          B307.
                                                                                            AGGN101018   NRG--REPLACE CHAPEL HVAC              163,000
                                                                                                          SYSTEM, B301.
                                                                                            AGGN101251   HVAC--REPR: EMCS UPGRADE,             990,000
                                                                                                          MULTIPLE FACILITY.
                                 AFMC....................  TINKER AFB..............         WWYK060041   SUSTAIN BY REPLACEMENT, HVAC          239,400
                                                                                                          SYSTEM, B202.
                                                                                            WWYK110059   SUSTAIN HVAC AWACS FLYING             626,800
                                                                                                          TRAINING CLASSROOMS, B215.
                                                                                            WWYK110061   SUSTAIN HVAC OPERATIONS               493,100
                                                                                                          SUPPORT SQUADRON, WEST SIDE,
                                                                                                          B283.
                                                                                            WWYK120030   REPAIR/RETROFIT ADMIN AREA            123,624
                                                                                                          LIGHTING AIR LOGISTICS CTR,
                                                                                                          B3001.
        R&M                      AETC....................  ALTUS AFB...............        AGGN051024I   REPLACEMENT/OVERHAUL OF             3,591,628
                                                                                                          WASTEWATER LINES.
        Sust                     AETC....................  ALTUS AFB...............         AGGN051024L  SEWER--REPR: REPLACE DEGRADED       6,389,627
                                                                                                          SEWER LINES, PHASE 1.
                                 AFMC....................  TINKER AFB..............         WWYK100250   SUSTAIN NON KEEL PORTIONS OF        6,200,000
                                                                                                          RWY 12/30, HORN TO SE END.
                                                                                                                                       -----------------
                                                                                                               OK Total...............      20,278,353
                                                                                                                                       =================
Oversea Demo                     AFSPC...................  THULE AB................       WWCX131001P1   Deconstruct Excess                    300,000
      s                                                                                                   Facilities, Ph A.
                                 PACAF...................  KADENA AB...............                   LXEDEMOLISH BUILDING 717 AND 715         600,000
                                                                                                      LXEDEMOLISH B719................         400,000
                                                           KUNSAN AB...............                  MLWRDEMOLISH BX TAXI SERVICE,              62,000
                                                                                                          BUILDING 712 AND 719.
                                                                                                     MLWRDEMOLISH C-PAD DINING                  82,000
                                                                                                          FACILITY, BUILDING 2850.
                                                           TAMA SERVICE ANNEX......         WRFD131065   Demolish Building 605, Tama..          35,000
                                 USAFE...................  INCIRLIK AB.............                   LJYDEMO COMMUNICATION BUILDING            50,000
                                                                                                          680.
                                                           RAF Alconbury...........         AEDY121024   DEMO FMO WAREHOUSE...........         350,000
                                                           RAF Mildenhall..........         QFQE111083   DEMO B442 AND ENLARGE                 400,000
                                                                                                          EXISTING CARPARK.
                                                           RAMSTEIN AB.............         TYFR111146   DEMOLISH ANNEX ADMIN FACILITY          35,000
                                                           SPANGDAHLEM AB..........         VYHK131701   DEMO/CONSOLIDATE WAREHOUSE            200,000
                                                                                                          FUNCTION FOR FSS, BUILDING
                                                                                                          235.
                                                           VOGELWEH FAMILY HOUSING          YANB081622   DEMOLISH BUILDING # 1035--            465,000
                                                            ANNEX.                                        VOGELWEH.
        Dorms                    AFSPC...................  THULE AB................        WWCX041015A   REPAIR FLATTOP #133,                1,310,000
                                                                                                          INFRASTRUCTURE.
                                                                                           WWCX111026A   REPAIR FLATTOP #206,                1,310,000
                                                                                                          INFRASTRUCTURE IMPROVEMENT.
                                 PACAF...................  KUNSAN AB...............                  MLWRREPAIR DORM 1408.............       7,400,000
                                                                                                     MLWRRENOVATE DORMITORY, #339.....       3,560,000
                                                                                                     MLWRREPAIR DORM 1407.............       7,400,000
                                                           MISAWA AB...............         QKKA022001   REPR B673 AIRMEN DORM........      13,000,000
                                                           OSAN AB.................         SMYU101004   REPAIR AIRMAN DORM, B1351....       4,800,000
                                 USAFE...................  RAF Lakenheath..........         MSET092004   RPR DORMITORY 946 (DMP)             9,800,000
                                                                                                          (Bridge Plan).
        Energy                   AFSPC...................  ANTIGUA AIR STATION.....                  ALMYEnergy Cons: Repair Lighting,         113,000
                                                                                                          Various.
                                                                                                     ALMYEnergy Cons: Repair A/C               331,000
                                                                                                          Units, Various.
                                                           THULE AB................        WWCX031028B   REPAIR FLATTOP #245, ENERGY           367,300
                                                                                                          IMPROVEMENT.
                                                                                           WWCX041015B   REPAIR FLATTOP 133, ENERGY            367,300
                                                                                                          IMPROVEMENT.
                                                                                           WWCX111026B   REPAIR FLATTOP #206, ENERGY           367,300
                                                                                                          IMPROVEMENT.
                                                                                            WWCX131012   ENERGY IMPROVEMENTS, BUILDING         188,200
                                                                                                          107, DINING HALL.
                                                                                            WWCX131013   ENERGY IMPROVEMENTS BUILDING          277,000
                                                                                                          362,COMMUNITY CENTER.
                                                                                            WWCX131014   ENERGY EFFICIENT LIGHTING,            131,700
                                                                                                          BUILDING 610 AND 628.
                                                                                            WWCX131015   ENERGY EFFICIENT LIGHTING,            264,000
                                                                                                          BUILDING 623.
                                                                                            WWCX131016   ENERGY EFFICIENT LIGHTING,            261,100
                                                                                                          BUILDING 624, HANGAR 8.
                                                                                            WWCX131018   ENERGY EFFICIENT LIGHTING,            140,300
                                                                                                          BUILDING 933 AND 1409.
                                                                                            WWCX131019   ENERGY EFFICIENT LIGHTING,            138,100
                                                                                                          BUILDING 1391, M-PLANT.
                                 PACAF...................  KADENA AB...............                   LXEREPAIR/REPLACE LIGHTING,              314,600
                                                                                                          HVAC, INSTALL SOLAR HOT
                                                                                                          WATER, B109 GYM.
                                                                                                      LXEREPAIR/REPLACE LIGHTING AND           301,120
                                                                                                          HVAC, B334.
                                                                                                      LXERETRO-COMISSIONING HVAC,              231,500
                                                                                                          B109, B334, B786, AND B3534.
                                                                                                      LXEKEY CARD CONTROLS FOR HVAC            195,251
                                                                                                          AND LIGHTS, B328, B329,
                                                                                                          B331, AND  B332.
                                                                                                      LXEREPAIR/REPLACE LIGHTING,              216,900
                                                                                                          PLUMBING AND ENVELOPE, B3541.
                                                                                                      LXELIGHTING AND WATER                    243,000
                                                                                                          CONSERVATION FOR DINING
                                                                                                          HALLS B178 AND B843.
                                                           KUNSAN AB...............                  MLWREISA 432 NRG EFFICIENCY             1,901,000
                                                                                                          MEASURES--DORM BAS UPGRADE.
                                                                                                     MLWRENERGY MANAGEMENT CONTROL           2,700,000
                                                                                                          SYSTEM (EMCS) UPGRADE, PHASE
                                                                                                          1.
                                                                                                     MLWRINSTALL VFD AT ACFT CORROSION         210,000
                                                                                                          CONTROL, BUILDING 2820.
                                                                                                     MLWRINSTALL KEYCARD ENERGY SAVING         322,000
                                                                                                          SYSTEM AT DORMITORY 535.
                                                           MISAWA AB...............         QKKA131039   REPR PAINT HANGAR VENTILATION         282,000
                                                                                                          B3130.
                                                           OSAN AB.................         SMYU121019   INSTALL OCCUPANCY SENSORS,            130,000
                                                                                                          MULTIPLE FACILITY.
                                                                                            SMYU121020   REPLACE THERMOSTATS, MULTIPLE         119,000
                                                                                                          FACILITY.
                                                           TATALINA LONG RANGE              WSFW100001   UPGRADE LIGHTING, SITEWIDE...         350,590
                                                            RADAR SITE.
                                                           WAKE ISLAND AIRFIELD....         YGFZ110006   UPGRADE LIGHTING, SITEWIDE...       1,611,036
                                                           YOKOTA AB...............         ZNRE121801   Replace Steam Traps, Various          702,000
                                                                                                          Buildings.
                                                                                            ZNRE121802   Install Occupancy Sensors in          238,000
                                                                                                          Dormitory Common Areas.
                                                                                            ZNRE121805   Building Systems                    1,480,000
                                                                                                          Optimization, Various
                                                                                                          Buildings.
                                                                                            ZNRE121810   Install Inverters on HVAC             523,000
                                                                                                          motors, Various Buildings.
                                                                                            ZNRE131800   Replace Building Automation           466,000
                                                                                                          Systems, Buildings 445 and
                                                                                                          653.
                                                                                            ZNRE131801   Replace Building Automation           331,000
                                                                                                          System, Building 2066.
                                                                                            ZNRE131803   Replace Leaking Fire Hydrants         102,000
                                 USAFE...................  EINSIEDLERHOF STORAGE                      LXPNRG: BOILER REPLACEMENT,              354,500
                                                            ANNEX.                                        EINSIEDLERHOF BUILDING 720.
                                                           RAMSTEIN AB.............         TYFR091279   ENERGY CONS: REPLACE ROOF....         137,000
                                                                                            TYFR101033   ENERGY CONS: REPLACE ROOF....         415,000
                                                                                            TYFR101035   ENERGY CONS: REPLACE ROOF....         300,000
                                                                                            TYFR111067   ENERGY CONS: REPLACE ROOF....         450,000
                                                                                            TYFR111074   ENERGY CONS: REPLACE ROOF....         347,000
                                                                                            TYFR111080   ENERGY CONS: REPLACE ROOF....         390,000
                                                                                            TYFR111083   ENERGY CONS: REPLACE ROOF....         410,000
                                                                                            TYFR111090   ENERGY CONS: REPLACE ROOF....         189,000
                                                                                            TYFR111130   RENEWABLE ENERGY CONS: INST.          553,500
                                                                                                          SOLAR/VOQ.
                                                                                            TYFR121125   ENERGY CONS: REPLACE MAIN             611,000
                                                                                                          ENTRANCE DOORS, KMCC.
                                                                                            TYFR121133   ENERGY CONS: REPAIR CHILLED           643,000
                                                                                                          WATER SYSTEM.
                                                           SPANGDAHLEM AB..........         VYHK122405   ENERGY CONS: INSTL AIR                276,100
                                                                                                          RECIRCULATION AND RPR
                                                                                                          AIRHANDLER, B157.
                                                                                            VYHK132402   ENERGY CONS: INST                     502,902
                                                                                                          THERMOSTATIC RADIATOR
                                                                                                          VALVES, MULTIPLE FACILITY.
                                                           VOGELWEH FAMILY HOUSING          YANB111528   ENERGY CONS: REPLACE ROOF....         285,000
                                                            ANNEX.
        R&M                      AFISRA..................  RAF Mildenhall..........         QFQE121036   Det 2, 25 IS SCIF Remodel....         200,000
                                                           OSAN AB.................        SMYU111007A   Upgrade HVAC, Building 321...         165,000
                                 AFSOC...................  KADENA AB...............                   LXEREPAIR BUILDING 3670.........       2,773,300
                                                                                                      LXEREPAIR BUILDING 3671.........       2,923,400
                                                                                                      LXEREPAIR BUILDING 3534.........       1,519,400
                                                                                                      LXEREPAIR BUILDING 3300.........         856,500
                                 PACAF...................  KUNSAN AB...............                  MLWRRELOCATE HOLD POSITION EDGE            10,000
                                                                                                          LIGHT ON TWY F.
                                                                                                     MLWRINSTALL ILS GROUND CHECK               50,000
                                                                                                          MARKERS.
                                                                                                     MLWRRENOVATE COMM BUILDING 952...         200,000
                                                                                                     MLWRAPPROACH 18 AND 36 RE-                136,000
                                                                                                          CIRCUITING.
                                                                                                     MLWRREPR/INSTALL IDS, VAR                  23,800
                                                                                                          FACILITIES.
                                                           OSAN AB.................         SMYU121033   INSTALL FANS ON HANGAR, B1833          50,000
                                                           YOKOTA AB...............         ZNRE111031   Repair Fussa Gate............         450,000
                                 USAFE...................  RAF Alconbury...........         QNDR121304   RPR HVAC COMM FACILITY, B-400         900,000
                                                           RAF Croughton...........         EXSW121009   CONSTRUCT ECP SATCOM.........         250,000
                                                           RAF Fairford............         GKVB991019   REP/ALT REFUELING VEHICLE             890,000
                                                                                                          MAINT FACILITY.
                                                           RAF Mildenhall..........         QFQE131004   RPR/CNS/DEMO FOR CES AND FUEL       2,700,000
                                                                                                          OPS CONSOLIDATION.
                                                           RAMSTEIN AB.............         TYFR061066   REPAIR/MAINTAIN ACFT MAIN.            842,800
                                                                                                          SHP.
                                                                                            TYFR101057   REPAIR BRIDGE L363 AND RAMPS.       2,000,000
                                                                                            YANB111582   ADD/ALTER FIRE STATION #6....       2,500,000
                                                           SPANGDAHLEM AB..........         VYHK092001   IMPROVE AT/FP MEASURES AT           1,360,000
                                                                                                          ENTRY POINT ALPHA 1, MAIN
                                                                                                          GATE.
                                                                                            VYHK122001   UPGRADE FLIGHTLINE SECURITY           680,000
                                                                                                          MEASURES AT RWY 23 END.
                                                                                            VYHK122002   UPGRADE FLIGHTLINE SECURITY           350,000
                                                                                                          MEASURES AT RWY 05 END.
                                                                                            VYHK131001   CONSTRUCT DRAINAGE PIPING             300,000
                                                                                                          FROM BUFFER BASIN TO CATCH
                                                                                                          BASIN.
        Sust                     PACAF...................  MISAWA AB...............       QKKA111200P2   REPR AIRFIELD LIGHTING SYSTEM       8,803,754
                                                                                                          PHASE 2.
                                                                                            QKKA131015   REPR East Concrete Touchdown.       5,120,000
                                 USAFE...................  AVIANO..................         ASHE131059   SUSTAIN SURETY PAS DOORS.....       5,250,000
                                                                                                                                       -----------------
                                                                                                               Overseas Total.........     114,643,253
                                                                                                                                       =================
     SC Demo                     ACC.....................  FORT FISHER RECREATION         HEVT091001P1   DEMOLITION OF COTTAGES, FFRA.       1,280,000
                                                            SITE.
                                 AMC.....................  CHARLESTON AFB..........         DKFX050074   DEMO ANG ALERT FACILITY--             310,000
                                                                                                          B2000.
                                                                                            DKFX121046   DEMOLISH CENTRAL A/C PLANT--           75,000
                                                                                                          B211.
                                                                                           DKFX983011D   VISITORS QUARTERS--SITE PREP        1,100,000
                                                                                                          (APF COMPANION).
                                                                                            DKGV122155   Demolish Family Housing Unit,          35,000
                                                                                                          B.1400.
        Energy                   ACC.....................  SHAW AFB................                  VLSBBasewide Lighting Upgrade--           643,000
                                                                                                          NRG.
                                                                                                     VLSBRepair HVAC, B417--NRG.......         337,000
                                                                                                     VLSBRepair Lighting with LED,             590,000
                                                                                                          Basewide--NRG.
                                                                                                     VLSBRepair Lighting w/ Controls,          195,000
                                                                                                          Basewide--NRG.
                                                                                                     VLSBRepair Water Fixtures--NRG...         108,990
                                                                                                     VLSBRepair Thermostats--NRG......         171,000
                                                                                                     VLSBRepair HVAC, B1900--NRG......         118,000
                                                                                                     VLSBRCX Base Facilities--NRG.....         281,000
                                 AMC.....................  CHARLESTON AFB..........         DKFX111059   REPAIR (R&M) EXTERIOR                 213,180
                                                                                                          LIGHTING B460 AND ALONG HILL
                                                                                                          STREET.
                                                                                            DKFX111153   UPGRADE KITCHEN EXHAUST HOODS         100,639
                                                                                            DKFX111154   UPGRADE EMCS.................         432,807
                                                                                            DKFX111176   Upgrade Exit Lighting........         121,935
                                                                                            DKFX129001   (NRG) Lavatory Water                  107,000
                                                                                                          Reduction Project, Various
                                                                                                          Facilities.
                                                                                            DKGV112263   UPGRADE LIGHTING.............         274,580
                                                                                            DKGV112425   Upgrade Lighting B-206 and B-         123,044
                                                                                                          3107.
                                                                                            DKGV112482   (NRG) Upgrade Kitchen Exhaust         290,493
                                                                                                          Hoods--Various Facilities.
        R&M                      ACC.....................  SHAW AFB................                  VLSBINSTALL GROUNDING AT RAPCON            80,000
                                                                                                          B700.
                                 AMC.....................  CHARLESTON AFB..........        DKFX061003K   REPAIR CAFB TAXIWAY KILO           11,700,000
                                                                                                          PAVEMENTS AND HOT CARGO PADS.
                                                                                            DKGV112305   Repair Electric Circuit at            200,000
                                                                                                          Retention Pond, South Annex.
                                                                                                                                       -----------------
                                                                                                               SC Total...............      18,887,668
                                                                                                                                       =================
     SD Energy                   ACC.....................  ELLSWORTH AFB...........       FXBM081102P2   REPAIR INEFFICIENT LIGHTING           800,000
                                                                                                          SYSTEMS.
                                                                                            FXBM121250   Repair HVAC 1103 Retro-                55,000
                                                                                                          Commissioning (RCx).
                                                                                            FXBM121251   Repair HVAC 7712 Retro-                55,000
                                                                                                          Commissioning (RCx).
                                                                                            FXBM131254   Repair Water Leaks...........         420,000
                                                                                                                                       -----------------
                                                                                                               SD Total...............       1,330,000
                                                                                                                                       =================
     TX Demo                     AETC....................  GOODFELLOW AFB..........         JCGU121053   CND: DEMO EXCESS FACILITY,             35,000
                                                                                                          B508.
                                                           LACKLAND AFB............                 MPLS0ABATE/DEMO TECH TNG SPT                60,540
                                                                                                          (8670).
                                                                                                    MPLS0ABATE/DEMO NAF SUPPLY (8853).          20,310
                                                                                                    MPLS0ABATE/DEMO NAF SUPPLY (8860).          41,685
                                                                                           MPYJ061008B   ABATE/ DEMO LTA GYM (B140)...         219,270
                                                                                            MPYJ061008L  ABATE/DEMO DORMITORY SUPPLY            20,080
                                                                                                          AND STORAGE FACILITY (143).
                                                           SHEPPARD AFB............         VNVP131005   Demo B1092...................          25,000
                                                                                            VNVP131011   Demo B1658...................         317,000
                                                                                            VNVP131013   Demo B1919...................         380,000
        Dorms                    ACC.....................  DYESS AFB...............         FNWZ100107   Repair HVAC Dorm 6138........       1,020,000
                                 AETC....................  LACKLAND AFB............                 MPLS9REPAIR STUDENT DORMITORY            7,628,370
                                                                                                          (10253, 10255, 10263).
        Energy                   ACC.....................  DYESS AFB...............         FNWZ130011   RETRO COMMISSIONING MULTIPLE          161,045
                                                                                                          BUILDINGS.
                                                                                            FNWZ130012   RETRO COMMISSIONING MULTIPLE          223,012
                                                                                                          BUILDINGS.
                                                                                            FNWZ130013   RETRO COMMISSIONING MULTIPLE          110,194
                                                                                                          BUILDINGS.
                                 AETC....................  GOODFELLOW AFB..........         JCGU091117   ENERGY CONS: RPL PNEUMATIC            229,000
                                                                                                          CONTROLS WITH DDC, B723.
                                                           JOINT BASE FORT SAM              JBSF110306   Central Energy Plant Upgrade,       1,591,700
                                                            HOUSTON.                                      B1377.
                                                                                            JBSF120033   NRG--Radiant Barrier Window           333,991
                                                                                                          Insulator, B 2003 and B 1029.
                                                           LACKLAND AFB............                 MPLS1Optimization of HVAC Systems,       1,242,082
                                                                                                          Various facilities.
                                                                                                    MPLS1Repair Heating Systems,               227,216
                                                                                                          Various facilities.
                                                                                                    MPLS1Sink, Shower, and Toilet              658,000
                                                                                                          Modifications.
                                                           LAUGHLIN AFB............         MXDP111027   REPLACE CHILLER, COOLING              300,000
                                                                                                          TOWER AND WATER PUMPS, B211.
                                                           RANDOLPH AFB............         TYMX138001   High Bay Retrofit--Multiple           100,999
                                                                                                          Facilities.
                                                           SHEPPARD AFB............         VNVP121013   DHRCs at 4 Dorms Sheppard AFB         520,831
                                 AMC.....................  FORT DIX................         HEKP114002   FORT DIX HVAC RECOMMISSION            376,000
                                                                                                          MULTIPLE FACILITIES.
        R&M                      ACC.....................  DYESS AFB...............         FNWZ080076   CONSTRUCT AGE WASH RACK, 5204         695,000
                                 AETC....................  GOODFELLOW AFB..........         JCGU101128   Minor: Consolidate CE                 316,316
                                                                                                          Entomology, B3524.
                                                           RANDOLPH AFB............         TYMX121011   Airfield Obstruction                1,800,000
                                                                                                          Reduction Ph 3--Remove CPS
                                                                                                          Poles in CZs.
                                                           SHEPPARD AFB............         VNVP001101   (AOB) Repair Drainage/                750,000
                                                                                                          Headwalls on Runway 17/35.
        Sust                     AETC....................  FORT SAM--HOUSTON.......         JBSF110075   RPR--Structural Repairs 100         7,650,000
                                                                                                          Area Buildings.
                                                                                                                                       -----------------
                                                                                                               TX Total...............      27,052,641
                                                                                                                                       =================
     UT Energy                   AFMC....................  HILL AFB................         KRSM120002   (NRG) RE-COMMISSION 40                629,880
                                                                                                          BUILDINGS.
                                                                                            KRSM120003   (NRG) INSTALL NEW EMCS POINTS         573,000
                                                                                                          (15) BUILDINGS.
        R&M                      AFMC....................  HILL AFB................         KRSM101058   REPAIR GRADE SOUTH END.......         500,000
                                                                                                                                       -----------------
                                                                                                               UT Total...............       1,702,880
                                                                                                                                       =================
     VA Energy                   ACC.....................  LANGLEY AFB.............         HERT114001   Repair UMCS Post Wide Phase 1       2,200,000
                                                                                            HERT114003   Repair Multiple Facilities--        2,263,000
                                                                                                          Solar Tracking Skylights.
                                                                                            MUHJ114016   Replace HVAC motors W/High            122,000
                                                                                                          Efficiency Motors, Multiple
                                                                                                          Facility.
        R&M                      ACC.....................  LANGLEY AFB.............         MUHJ024230   Demolish Poles and Install          1,242,300
                                                                                                          Underground Service.
                                                                                            MUHJ074019   Relocate Electrical                 1,470,000
                                                                                                          Distribution Lines
                                                                                                          Underground.
                                                                                            MUHJ104143   Repair Fire Detection/                325,000
                                                                                                          Suppression System, F. 407.
                                                                                                                                       -----------------
                                                                                                               VA Total...............       7,622,300
                                                                                                                                       =================
     WA Demo                     AMC.....................  FAIRCHILD AFB...........         GJKZ110099   DEMO, Aircraft Corrosion            1,000,000
                                                                                                          Control Hangar; B1023.
                                                                                            GJKZ110101   DEMO, Aircraft Corrosion            1,100,000
                                                                                                          Control Hangar; B1021.
        Energy                   AMC.....................  FAIRCHILD AFB...........         GJKZ010027   REPAIR, Water Pump Facility,          103,550
                                                                                                          Potable, Pumps and Fan
                                                                                                          Motors MFACS.
        R&M                      AMC.....................  FAIRCHILD AFB...........         GJKZ860027   REPAIR (R&M), Taxiway, Towway         520,000
                                                                                                          I ACC (Access to Stub 100).
                                                                                                                                       -----------------
                                                                                                               WA Total...............       2,723,550
                                                                                                                                       =================
     WY Demo                     AFGSC...................  FE WARREN AFB...........                 GHLN0DEMOLISH 800--SERIES                  596,000
                                                                                                          DORMITORY B835.
                                                                                                    GHLN0DEMOLISH 800--SERIES                  600,000
                                                                                                          DORMITORY B836.
        Energy                   AFGSC...................  FE WARREN AFB...........                 GHLN1RECOMMISION HVAC SYSTEMS 8            143,200
                                                                                                          BASE BUILDINGS.
                                                                                                    GHLN1LEAK DETECTION/REPAIR POTABLE         200,000
                                                                                                          WATER DISTRIBUTION SYSTEM.
                                                                                                    GHLN1XERISCAPE....................         820,000
        R&M                      AFGSC...................  FE WARREN AFB...........                 GHLN0CONSTRUCT CROW CREEK SANITARY         582,000
                                                                                                          LIFT STATION.
        Sust                     AFGSC...................  FE WARREN AFB...........                 GHLN1MAINTAIN WSA ROOFING SYSTEM,        5,475,000
                                                                                                          HELICOPTER OPERATIONS
                                                                                                          BUILDING AND HISTORIC
                                                                                                          DISTRICT.
                                                                                                                                       -----------------
                                                                                                               WY Total...............       8,416,200
                                                                                                                                       -----------------
                                                                                                               Grand Total............     482,457,298
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Senator Boozman. Okay, very good.
    One of the things I am concerned about, the Air Force, if 
we do go into sequestration, I have heard that they may have to 
reduce their flying hours by as much as 18 percent. And very 
quickly, can you tell us how that is going to affect the air-
worthiness of our pilots, because, the reality is, is that this 
actually could mean a 30-percent reduction moving forward, when 
you are backing up.
    Dr. Carter. No question, flying hours, as I mentioned 
earlier, steeply decline. What that means is two things. First 
is the units are, except for Afghanistan, which we are 
protecting anybody whose going from Afghanistan, their 
training----
    Senator Boozman. So if you prioritize that--I don't mean 
to--if you prioritize that, then that is going to make the 
other----
    Dr. Carter. Exactly.
    Senator Boozman. The other 30 percent comes from----
    Dr. Carter. Bigger cuts in the others, which means they are 
not going to be ready for other contingencies.
    Senator Boozman. Right.
    Dr. Carter. That is a real national security concern.
    And if you play this out, if proficiency declines to a 
certain extent, it takes a while to get them back. And so you 
are going to see that in our carrier air wings. You will see it 
throughout the Air Force.
    And this is why I said short-term disruption is long-term 
harm. And that is why we really need some long-term solution 
here and not something that just moves things down the road.
    Senator Boozman. Thank you.
    Thank you, Madam Chair.
    Chairwoman Mikulski. The next questioner was going to be 
Senator Begich. He is not here. His statement will go into the 
record.
    We now go to Senator Shaheen, then Senator Moran, Senator 
Johanns, Senator Pryor, Senator Alexander, Senator Merkley, and 
Senator Cochran.

                  STATEMENT OF SENATOR JEANNE SHAHEEN

    Senator Shaheen. Thank you very much, Chair Mikulski. I am 
very pleased to be able to serve on this committee with you and 
Ranking Member Shelby. And I am, particularly, pleased to hear 
you talk about the effort to return to regular order in terms 
of our budgeting process. I think that is very important for 
the Senate.
    For all of our panelists, thank you very much for being 
here and for the work that you have done to date, because, as a 
Congress, we have been unable to deal with this country's debt 
and deficits. And I was impressed and pleased to hear all of 
you talk about, in your remarks, the fact that these automatic 
cuts that are going to go into effect aren't just going to 
affect Government jobs and Government programs. But they are 
going to affect private sector jobs and private sector efforts 
to put people back to work in this country, so that they are 
going to have an impact on businesses, on families, on the jobs 
that we are creating. And, ultimately, they are going to have 
an impact on economic activity in this country.
    I am sure all of us saw, and you referred to this, 
Secretary Carter, in your remarks, that fourth quarter activity 
last year, we saw a decline in economic activity for the first 
time since 2009, because of the reduction in public spending. 
Economists suggest that was a concern about the sequester.
    CBO estimates that we are going to see a loss of up to 1.4 
million jobs if the sequester goes into effect. Senator 
Feinstein referred to the George Mason study, which suggests 
that we will lose 2 million jobs, 1 million on the defense side 
and 1 million on the domestic side of the budget, if we don't 
deal with this.
    And, you know, Senator Blunt, you referred to the 
comprehensive effort to address the sequester. When I think 
about the comprehensive effort to address our debt and 
deficits, I do think it has to be balanced, that we need to 
look at the domestic side and the defense side in spending. I 
think that is appropriate. I think we need to look at mandatory 
programs, and I do think we need to look at revenue, that we 
need to solve this problem for the long term.
    We would not, as families, run our family budgets this way. 
We would not run our businesses this way. And we should not run 
the Government this way. It is a detriment to all of the good 
taxpayers across this country.
    And, Mr. Werfel, one of the things that I think we have not 
talked about, is the cost of what we are doing right now in 
terms of the sequester. And I wonder if you could give us any 
kind of an estimate on what it is costing us to try and plan 
for the sequester, and, if it goes into effect, what some of 
those costs might be.

                            SEQUESTER COSTS

    Mr. Werfel. Well, thank you for the question. I don't have 
a specific cost estimate. I can tell you that I am taking a lot 
of the central coordinating role across Government in planning 
for the sequester. I have a sense of the impact that it is 
having at many agencies, and my colleagues on the panel can 
certainly speak to it.
    It is enormously disruptive to agency operations. You hear 
stories of people pulled into meetings from doing the day-to-
day mission-critical work that they are supposed to be doing, 
to be pulled into a meeting to discuss how to plan for this 
contingency, which was never meant to occur. And at the end of 
the day, our planning is going to fall short of mitigating its 
many harmful impacts.

                             PROGRAM COSTS

    Senator Shaheen. Well, let me ask you, Secretary Carter, 
because, before the Senate Armed Services Committee earlier 
this week, you talked about some of the costs of the sequester 
that will have a real long-term impact in terms of 
shipbuilding, for example. So can you speak to some of those 
costs?
    Dr. Carter. Yes, unit costs will go up in every program 
affected by the sequester. And we can provide you those 
numbers, whether it is the Joint Strike Fighter, whether it is 
the DDG-51.
    [The information follows:]

    The unit cost of military equipment is sensitive to annual 
production rates and many of our programs are already at low rates 
which are inherently inefficient. As these rates decrease further under 
sequestration, related overhead and support costs are spread over a 
smaller production run. This, along with the loss of manufacturing 
efficiencies, leads directly to higher costs per unit, which can result 
in a reduction in total overall quantities, or stretching programs out 
to live within available annual resources. In the near term, while 
future budgets are highly uncertain, we will do our best to cut other 
program activities and hold to production quantities, but in some 
cases, such as the F-35, our first priority will be to keep the 
development part of the program on track, if we have that flexibility. 
Across the board we are doing our best to limit the damage being caused 
by sequestration, but the continuing uncertainty about final budget 
levels in fiscal year 2013 and beyond makes it very difficult to 
estimate specific long-term effects. Unfortunately, the sequestration 
also has a compounding effect that also carries on into future fiscal 
years. Impacts of sequestration will also be felt most strongly among 
the small companies that make up much of our production supply chains. 
Many of these companies will have great difficulty keeping their doors 
open and this will have a secondary effect on prices of future 
production lots.
    With the F-35 (Joint Strike Fighter), we estimate a reduction of 
approximately four aircraft in fiscal year 2013 due to the lower 
funding level.
    With regards to shipbuilding contracts, where annual procurement 
rates are already low, the loss of 9 percent may not lead directly to 
the loss of a ship because we will try to avoid this in the near term 
by taking the cuts in other ways. The steps we must take, however, will 
lead to higher costs in the future, since there is no viable option but 
to delete or defer the installation of specific components on a warship 
like the DDG-51 class destroyers. The Navy will have to renegotiate 
delivery schedules and reschedule where possible the installation of 
machinery, systems and weapons inside the ship's hull, as funds become 
available. The most likely outcome will be shipyard production 
inefficiencies, as the shipbuilder tries to implement workarounds until 
the Navy can reprogram funds from other programs, to finish the ship.

    Dr. Carter. So at the very moment that we are trying to be 
parsimonious with the taxpayer's dollar--that is what this 
whole hearing is about--we are wasting it by forcing our 
industry partners to behave in an economically inefficient way. 
And that is very frustrating to me, but it is a real 
phenomenon.
    Senator Shaheen. And, Secretary Donovan, one of the things 
that the Office of the Inspector General on Federal Housing 
Administration programs has recovered is about $1.5 billion and 
been able to put those dollars to better use. Can you talk 
about how that inspector general's program might be affected by 
the sequester?

                   OFFICE OF INSPECTOR GENERAL STAFF

    Secretary Donovan. This is a great point, Senator, because 
it isn't just the internal costs to the agency. It is the 
return on investment, if you will, of the dollars we are 
spending. And this kind of indiscriminate cut doesn't take into 
effect where we are saving money by continuing to invest in 
certain things.
    Our inspector general, that funding would be reduced just 
as it would in any other program. This past year alone, we have 
recovered more than $1 billion from FHA lenders that were not 
making loans according to our standards. And having to reduce 
both our own oversight, as well as the inspector general losing 
critical staff doing that kind of work, will lead to even 
greater losses to the taxpayer than we are gaining by making 
these cuts.
    On a similar note, with veterans, we know that not only do 
we save lives by getting veterans off the streets, but, in 
fact, we reduce costs from emergency rooms, from shelters, from 
prisons, from a whole range of other institutions by investing. 
We actually save more money by housing a homeless veteran than 
we do in the cost of housing them simply because of those 
savings.
    Senator Shaheen. Thank you.
    Thank you, Madam Chairman.
    Chairwoman Mikulski. Senator Moran.
    Also, I understand you are going to be the new ranking 
member on Labor-HHS; is that right?

                    STATEMENT OF SENATOR JERRY MORAN

    Senator Moran. Madam Chair, I look forward to that 
opportunity, and it is true. And I have reached out to Senator 
Harkin and to you in the last few weeks expressing my desire 
that we have a good committee operation.
    I congratulate you on your chairmanship and delighted to 
hear your suggestion, perhaps more than a suggestion, that we 
are going to operate under regular order. I have been asked 
whether I like being on the Appropriations Committee, and the 
answer is yes, if we will function.
    It is a great committee. And I look forward to your 
tenacity to see that we do that. And I look forward to working 
with you.
    Chairwoman Mikulski. Thank you.
    Senator Moran. First of all, in that regard, I look forward 
to the hearings in which we get to the point in which we are 
talking about the appropriations process, a budget is passed, 
and we are doing our work. I look forward to addressing the 
issues of spending in a long-term setting rather than the 
matter of a few months in which sequestration will apply.

               NATIONAL BIOSCIENCE AGRO-DEFENSE FACILITY

    I need to start, Madam Secretary, with you, as you might 
expect. I don't think in the 2-plus years that I have been a 
member of this committee or the Homeland Security Committee or 
the Subcommittee on Homeland Security, that we have ever had 
you in front of us in which you and I have not talked about the 
topic of the National Bioscience Agro-defense Facility (NBAF).
    And I was really reluctant to do today, but you give me no 
option, because our time is up. Unless you release the CUP 
funding, the central utility plant funding, within the next 
week, the contracts expire.
    And so the last time we were together in September in a 
similar setting, you indicated that it was now time to fish or 
cut bait. You took a very significant step and authorized the 
transfer of real estate from the State of Kansas to the Federal 
Government--allowed the transfer of the land so that this 
facility could be built. And you have the authority, once 
again, to take another step, which is to release the $40 
million that this Congress has appropriated to meet the State's 
funding to complete the central utility plant. And I am anxious 
to know if you are ready to fish or cut bait.
    Secretary Napolitano. Senator, we have been working very 
closely with the State of Kansas on NBAF. And as you know, they 
have increased their own participation in the NBAF. I view it 
as a huge security need. It is also a huge need for our 
agricultural industry.
    With respect to moving forward on the CUP, I am very aware 
of the contract issue. But, if I might say, this perfectly 
illustrates the problem we are all in.
    I am trying to work with the Congress to build a level four 
agro facility in Kansas. It is a big investment. It is going to 
take some years to construct, but the country really needs it. 
It is virtually impossible to do a long-term capital budget 
when we have a fiscal year 2012 budget. We don't have a fiscal 
year 2013 budget, really. And who knows what will happen with 
2014. And in the middle of this is the threat of the sequester.
    So I would have to echo Secretary Carter here that we are 
making all of these things more difficult, more expensive, and 
at the risk of really encouraging greater risk to the Nation.
    But I am well aware of the CUP issue. I have a call with 
the Governor of Kansas this evening. We will be working through 
this.
    But you have made it almost impossible to manage these 
large departments.
    Senator Moran. I assume it is the universal ``you'', Madam 
Secretary. Not the specific ``you'' made it nearly impossible 
to work with.
    Secretary Napolitano. That is right. And I would not want 
to single you out.
    Senator Moran. Thank you.
    Secretary Napolitano. That is correct.
    Senator Moran. Well, let me again stress the importance. I 
am glad to know of your conversation, intended conversation, 
with our Governor. But the money is appropriated within your 
realm of releasing those dollars, and, again, I would ask you 
to do that.
    Secretary Napolitano. The issue, if I might, Senator, is, 
yes, it is appropriated, but what do we do with the out-years 
now? That is the uncertainty.
    Senator Moran. And that has been an issue which is going to 
rely upon the Congress to fulfill its obligation to fund a 
facility that we believe is important.
    And I am not critical of the administration in this regard 
any more than I am critical of the Congress. It is embarrassing 
in so many circumstances in which we don't do our work, don't 
pass a budget, don't do appropriation bills, continue to pass 
continuing resolutions.
    Again, I asked to be a member of this committee. I think it 
has important work to do. And I am so pleased that our new 
chair is as tenacious as she is to make certain that this is a 
process that the Senate complies with, our constitutional as 
well as our legislative responsibilities. And we want to make 
it easier for you to help us accomplish the goals that benefit 
this country by doing our jobs.
    And so the ``you'' I understand is all of us, and it is 
well past time for this Congress to function in regard to the 
appropriations process.
    In the 18 seconds I have left, let me ask, I guess, I would 
focus on the National Institutes of Health (NIH), so perhaps 
you, Mr. Werfel.
    The impact of sequestration on NIH, I believe that medical 
research is significant and important to help save lives and 
reduce the cost of healthcare. One of the things that I think 
there would be significant discretion at NIH for is how it 
handles sequestration, in the sense that much of the money goes 
there and then is provided in grants elsewhere.
    The question I wanted to zero in on is, will that money be 
used internally for research projects at NIH? If there is a 
reduction in spending, will the reductions come in an equal 
fashion, or how will they be divided between research done at 
NIH or the 80-plus-of the research that is done across the 
country by universities and research facilities?

            NATIONAL INSTITUTES OF HEALTH RESEARCH PROJECTS

    Mr. Werfel. Senator, I am not sure of the exact balance. I 
will say it is my understanding that NIH, as a result of the 
sequester, will have to issue hundreds of fewer awards that 
will have spiraling impacts of delaying and halting vital work, 
jeopardizing thousands of jobs, placing prior investments at 
risk, and, ultimately, and the bottom line is, setting back 
work on chronic illness and disease.
    So while I am not aware of the exact split--and we can get 
that information for you--I think the important point is that 
NIH and research and innovation is an important area we have 
not talked about today and that is also significantly impacted 
here.
    Senator Moran. Well, I appreciate the sentiments, the 
concerns about that. I am still interested in an answer to the 
question of how NIH, which seems to me would have more 
flexibility than many agencies, to determine how that would 
occur. I would like know what the plan is.
    Mr. Werfel. We will get you that.
    Senator Moran. I also would encourage you to provide the 
committee, at least provide me, with the $4 trillion plan that 
you responded to fiscal year Senator Coats' question. We would 
be delighted to know what the President's plan is in regard to 
$4 trillion.
    Mr. Werfel. And if I could respond to that, the plan has 
been provided on multiple occasions. It is in the President's 
fiscal year 2013 budget. It was provided back to the joint 
committee when it existed.
    It is my understanding that the President, in terms of 
ongoing negotiations and work with the Congress, has used those 
plans in both the joint committee and the President's budget as 
a basis for those negotiations.
    So our position is that the President has on multiple 
occasions submitted very specific plans on how to save $4 
trillion over a 10-year period. It is really, we think, up to 
the Congress to work through those issues, to get a bill that 
can pass both the House and Senate, and get it to the 
President, that can avoid the sequester and get us on a 
balanced path.
    Senator Moran. One of the problems is the absence of 
regular order is that I, as a Member of the United States 
Senate, am not participating in those meetings that occur 
between our leaders and the President, nor was I a member of 
the select committee. It would be great to see a proposal in 
writing as to what that plan is.
    And, again, when we get back to regular order, we will have 
the opportunity to discuss those.
    Chairwoman Mikulski. Let's hope so.
    Senator Moran, I would like to say to you, first of all, 
thank you for your question on NIH. I will be visiting NIH on 
Thursday morning. You, of course, would be welcome to join me 
if you are in town. I offer a gesture of hospitality.
    I will ensure that your question is asked. It is exactly, 
Sir, one of the questions I have of Dr. Francis Collins on the 
impact of the sequester on NIH.
    And your staff is more than welcome to accompany me on that 
visit so that they can hear the firsthand briefing that I will 
receive, as well for Senator Harkin's staff.
    Senator Durbin had to leave. His statement will be in the 
record.
    Deputy Secretary Carter, he will be talking a lot with you, 
as you know, in his new role.
    Senator Pryor.

                    STATEMENT OF SENATOR MARK PRYOR

    Senator Pryor. Thank you, Madam Chairwoman.
    Let me follow up on one of Senator Blunt's points about the 
Department of Agriculture. The law on meat inspectors says that 
processing and slaughter plants can't operate unless the 
inspectors are present. Closing these plants for 15 days, these 
are USDA's numbers, could result in lost production volume of 2 
billion pounds of meat, which is beef and pork; 2.8 to 3.3 
billion pounds of poultry; and more than 200 million pounds of 
egg products. That will drive the price up for consumers.
    So this is going to adversely affect every consumer in 
America. Sequestration is going to be very disruptive to our 
food supply and the food chain that we have in this country. 
The bottom line is, this is bad for the U.S. economy.
    There are going to be more than 10,000 very low-income 
residents in rural America that will lose their rental 
assistance which enables them to stay in safe and affordable 
housing. These families are generally female-headed households, 
or they are households of elderly or disabled persons. And the 
average monthly income for these folks is $803.
    So these are low-income people. It is the least of these 
that are going to take the brunt of these cuts if we can't get 
our act together here in Washington.
    My first question is for you, Mr. Werfel. As these 
furloughs take effect, do you anticipate it will happen on day 
one? And will it happen in every agency and every Department 
across the board? Or will it be phased in over time?

                               FURLOUGHS

    Mr. Werfel. Well, there are legal requirements for notices 
that I think Deputy Secretary Carter mentioned.
    What we will see is agencies will start doing a couple of 
key things. First, furloughing is something that is subject to 
bargaining. So work is ongoing and will intensify as we 
approach the sequester with union representation to make sure 
that the manner in which the furloughs are implemented is fair 
and equitable and et cetera. And so that is a very important 
process that will happen.
    Next, there will be a notice period. And as a general 
matter, those notice periods are different depending on agency 
and collective bargaining agreements. But I think you can use 
30 days as a general manner.
    So what we will start seeing after March 1 is the 
intensification and completion of that bargaining with the 
unions, where appropriate, and then notices will start to be 
issued. I think the Defense Department mentioned early April as 
to when that is going to be triggered.
    So the furloughs themselves will probably happen along a 
continuum, not exactly on March 1. But there will be impacts on 
March 1, including employee uncertainty but also spending 
reductions as well.
    Senator Pryor. Has OMB done a study or analysis of the 
overall adverse impact to the U.S. economy?
    We know how many Federal dollars are at stake. We get that. 
That is pretty easy to get. But has OMB done a study on the 
adverse impact to the entire U.S. economy?
    Mr. Werfel. We do not have an official estimate at this 
time. I will point out that a range of third-party estimates is 
now coming. I think some of them have been raised during this 
hearing.
    They show a negative impact of 0.5 to 0.7 percent in real 
GDP growth in 2013 alone. And that is a macroeconomic 
statistic, but what it translates into, and I think the 
President has been clear, that is going to translate into 
hundreds of thousands, if not more, job losses.
    And we have talked about how these are difficult economic 
impacts to measure because they have ripple effects. There is 
the pulling $85 billion out of State and local governments, out 
of Federal contractors, very abruptly and suddenly. You have 
got impacts down our supply chains, uncertainty impacting 
decisions to make investments.
    So, for me, I don't know the 0.5 to 0.7 percent in real GDP 
growth is an important macroeconomic measure. What does that 
translate into? And we think it translates into very harmful 
effects to the economy and, in particular, to the middle class 
and jobs.
    Senator Pryor. Yes, I agree with you.

                            INDUSTRIAL BASE

    Secretary Carter, and I only have about 30 seconds here. 
Secretary Carter, when it comes to the industrial base, we have 
contracts in place, and these contracts oftentimes have 
provisions in them for if the Government breaks the contract, 
there are penalties, et cetera.
    When you think about those penalties in the contract, and 
you said that the unit cost goes up, has DOD done a calculation 
of how much this will actually cost DOD in terms of efficiency 
and how many dollars will, in effect, be wasted as part of 
this?
    Dr. Carter. Yes, we have. You can do that program by 
program, and it is pretty dispiriting to see the waste 
associated with it.
    And a good measure of the impact on the industrial base is 
this: Even if we furloughed everybody, every DOD civilian, all 
800,000 of them, for the maximum we are allowed to do it 
legally, we would get $5 billion out of the $46 billion we 
need.
    Where is that other $41 billion going to come from? It 
comes from people who are not Federal employees, but who work 
for us indirectly doing the things that we need, whether they 
are maintaining our ships or building our weapons systems. So 
it is a huge impact on them.
    Senator Pryor. Thank you, Madam Chairman.
    Chairwoman Mikulski. Excellent questions.
    We note that Senator Johanns was here and left, and his 
statement will be in the record.
    Senator Alexander.

                  STATEMENT OF SENATOR LAMAR ALEXANDER

    Senator Alexander. Thanks, Madam Chairman. I look forward 
to working with you on the Appropriations Committee. I thank 
you for the hearing.
    And I thank the witnesses for coming this morning.
    Mr. Werfel, you mentioned the President's $4 million plan 
to reduce the debt. I assume that is a published document.
    Mr. Werfel. $4 trillion over 10 years.
    Senator Alexander. $4 trillion over 10 years.
    Mr. Werfel. It is.
    Senator Alexander. That is a published document. And I 
assume you are pretty familiar with it, right, as Controller of 
OMB.
    Mr. Werfel. I am.
    Senator Alexander. Could you detail for me exactly the 
plans for reducing entitlement spending over 10 years?
    Mr. Werfel. Yes, I can provide you some additional detail 
there.
    So the President's fiscal year 2013 budget, which contains 
his plan, has within it, with respect to the deficit reduction 
for the $4 trillion----
    Senator Alexander. I am talking about the specific proposal 
to reduce spending on entitlement programs over the next 10 
years.

                       MANDATORY PROGRAMS SAVINGS

    Mr. Werfel. Okay, there is $362 billion in health mandatory 
savings. They include such provisions as reducing Medicare bad 
debt coverage, aligning payments better to patient care costs 
for both medical education and rural providers, increasing 
income-related premiums for part B and part D of Medicare, 
aligning Medicare drug payments with Medicaid policy----
    Senator Alexander. That's $362----
    Mr. Werfel. $362 billion over 10 years.
    Senator Alexander. All right. And how much more is----
    Mr. Werfel. And there is an additional $270 billion in the 
President's budget in savings in other mandatory programs, such 
as eliminating direct payments to USDA subsidies or agriculture 
subsidies, changes to military and civilian retirement, 
increases in air passenger security fees, and then reforms to 
the U.S. Postal Service.
    Senator Alexander. Is there more than that?
    Mr. Werfel. That covers what I have here for mandatory 
programs in the President's overall plan for $4 trillion.
    Senator Alexander. So that is $500 or $600 billion over 10 
years.
    Mr. Werfel. That is correct.
    Senator Alexander. In reductions in mandatory spending out 
of the $4 trillion goal.
    Mr. Werfel. Well, that builds on $1 trillion that was 
previously achieved in the BCA for discretionary accounts.
    Senator Alexander. For mandatory spending? No, I am talking 
just about mandatory.
    Mr. Werfel. Okay. Yes. That is the component of mandatory 
spending that is in the President's budget.
    Senator Alexander. Right. But the problem with that is that 
entitlement spending is most of the problem we have, is it not, 
with spending and deficit, that the BCA actually addressed 
discretionary spending, which is what this committee deals 
with, 38 or 39 percent of the budget.
    And if we were to follow the caps that we put on 
discretionary spending over the next 10 years, we would be 
growing--that part of the budget would grow at about the rate 
of inflation. Is that not right?
    Mr. Werfel. Yes. That is my understanding.
    Senator Alexander. Right. But, so if the whole budget grew 
at just the rate of inflation, we really wouldn't have a 
problem, would we?
    Mr. Werfel. I want to go back, Senator, I think to the 
fundamental question of the components of the President's plan.
    Senator Alexander. No, I don't want to talk about that. I 
want to talk about entitlement spending. And you said there are 
$500 or $600 billion out of a $4 trillion goal that is 
entitlement spending. What I said is you have got 38 or 39 
percent of the budget that is under control and 55 percent that 
is out of control that is growing at the rate of 3 or 4 percent 
a year.
    And we have raised taxes. We have put caps on discretionary 
spending. And what is happening is entitlement spending is 
going to soak up all the money that all of you are worrying 
about over the next 5 years. And there is no plan from the 
President to deal with it.
    And this isn't just the President's problem. I go back 30 
years as Governor, when I was sitting there trying to put more 
money into higher education and federally mandated Medicaid was 
soaking up money that I would like to put in higher education.
    So what I would like, respectfully, to see from the 
President is a plan to do what his own debt commission said we 
needed to do, which is to restructure Medicare and Medicaid in 
a way that saves them so people can count on them, and so that 
they don't squeeze out of the budget everything else we need to 
do.
    According to the President's own debt commission, Federal 
revenues will be enough in 2025, which is only 12 years away, 
just to pay for entitlements and the debt. So there won't be 
any money for any of the things that any of you say are very 
important to the country, and which I agree with.
    So States have to balance their budgets. I mean, why is it 
that in the Federal Government, we don't get together during 
these next couple of months and do what everybody knows we have 
to do, which is get control of entitlement spending so we don't 
have the problem that you are talking about?
    And it will not happen unless the President leads the way 
with specific proposals, which he has not yet done.

                          ENTITLEMENT SPENDING

    Mr. Werfel. A very quick response. First, I am not in any 
way disputing that the growth of entitlement cost is a major, 
major driver, the major driver in our deficit reduction 
challenges.
    What I am pointing to is the fact that members of both 
parties and independent experts have pointed to a $4 trillion 
benchmark of overall deficit reduction savings as a smart, 
sensible next move that we can do to stabilize debt----
    Senator Alexander. My time is up.
    But Senator Corker and I put on the table a $1 trillion 
plan to reduce entitlement spending over the next year. Why 
hasn't the President done that?
    Mr. Werfel. Well, the President is ready, I think, to 
negotiate on sensible entitlement reform.
    Senator Alexander. He is the President of the United 
States. He is supposed to lead.
    Mr. Werfel. And he has put forward a plan. The notion that 
he hasn't is untrue. He has put forward----
    Senator Alexander. He has not put forward a plan to deal 
with entitlement spending, because the plan which you related 
is $500 billion or $600 billion out of the $4 trillion, and it 
does not address restructuring the programs that are causing 
the Government to go out of control in spending and causing the 
devastation that has been described here this morning.
    Thank you, Madam Chairman. I have used my time.
    Chairwoman Mikulski. This is a preview of things to come.
    Thank you, Senator Alexander.
    I want to go to Senator Merkley, and then Senator Cochran.

                   STATEMENT OF SENATOR JEFF MERKLEY

    Senator Merkley. Thank you very much, Madam Chair. It is a 
pleasure to be here at my first meeting of the Appropriations 
Committee, and I certainly look forward to engaging in these 
types of discussions, as we wrestle as representatives of our 
respective States on both sides of the aisle, on how to take 
our Nation forward and restore a thriving economy, a growing 
economy that will bring us back on track. And that is what this 
discussion is all about.
    And I wanted to ask Controller Werfel, if we take the BCA, 
combine it with sequestration, and the impact on interest, and 
we total all that up, how much is the savings, ballpark?

                       BUDGET CONTROL ACT OF 2011

    Mr. Werfel. Senator, the BCA had roughly $1 trillion in 
deficit reduction. The sequester would impact the deficit by an 
additional $1.2 trillion.
    Senator Merkley. So about $2.2 trillion. And I had if you 
threw in the interest on the--well, from the Center on Budget 
and Policy Priorities, they had $600 billion under the BCA on 
defense, $900 billion on nondefense, an additional $250 billion 
in interest savings. So it is a larger number. I am not sure 
why the discrepancy.
    But is that more or less than the $600 billion in revenue 
that is coming out of the December 31 deal?
    Mr. Werfel. It is obviously more.
    Senator Merkley. By a factor? By a small amount?
    Mr. Werfel. By a significant amount.
    Senator Merkley. Okay. Basic math, three or four times as 
much.
    Mr. Werfel. Exactly.
    Senator Merkley. So when I hear folks on both sides of the 
aisle talking about a 50/50 plan for revenue and expenditure 
reductions, is that anywhere close to what is being pursued now 
with sequestration?
    Mr. Werfel. No.
    Senator Merkley. Would that balanced plan with 
sequestration have to be replaced by revenue?
    Mr. Werfel. To achieve more balance, yes.
    Senator Merkley. Let me ask you another question. Is there 
any real difference between a $5,000 tax credit and a $5,000 
expenditure on a similar program?
    Mr. Werfel. From the perspective of----
    Senator Merkley. Either a----
    Mr. Werfel. On the budget deficit?
    Senator Merkley [continuing]. Program or the cost on the 
budget?
    Mr. Werfel. I don't want to speak to the program mission, 
but the budget impact should be the same.
    Senator Merkley. If I spend $5,000 on affordable housing on 
a tax credit, and I spend $5,000 that I appropriate, isn't it 
basically the same $5,000?
    Mr. Werfel. Yes.
    Senator Merkley. So when we are talking about spending, why 
aren't we talking about across-the-board reductions in spending 
on tax loopholes, credits, and deductions?
    Mr. Werfel. I think the President believes we should be 
talking about that.
    Senator Merkley. Well, so there are a series of things that 
I would like to see. We are spending $85 billion on 
sequestration as it now stands over this coming year. There is 
a lot more spending than that on tax loopholes.
    Mr. Werfel. Yes.
    Senator Merkley. Wouldn't we be closer to that balance we 
are talking about if we closed some tax loopholes, get back to 
the regular order, and stop going from crisis to crisis, and 
putting our entire economy at risk in the process?
    Mr. Werfel. That is the fundamental guiding principles that 
the President wants for a solution.

           EDUCATION IS AN INVESTMENT THAT SHOULD NOT BE CUT

    Senator Merkley. Secretary Duncan, there is the Edwards-
Gingrich payroll tax loophole proposal. That goes back a ways, 
but it had to do with the gaming of corporate status. It saved 
about $9 billion. Would it make more sense to end the spending 
on that tax loophole or to cut Head Start, special education, 
and title I?
    Secretary Duncan. The best investment we can make for the 
future is to get our children off to a great start. We know it 
is a 7-to-1 bang-for-the-buck. To not invest in children with 
disabilities and poor children makes no sense whatsoever.
    We have to invest in education. We have to invest smartly 
and wisely, but we cannot cut that investment.
    Senator Merkley. And, Secretary Donovan, there is the 
stock-option loophole and offshoring of U.S. profits. Well, 
just the offshoring of U.S. profits is about a $24 billion 
cost.
    I am not talking about the numbers being exactly even here, 
but, just in concept, does it make sense to close this tax 
loophole or to cut a vast number of the affordable housing 
programs that your Department oversees?

                               SECTION 8

    Secretary Donovan. Our entire budget for our section 8 
voucher program, which is the single largest help, more than 50 
percent of the folks that we serve--elderly, people with 
disabilities--that entire budget is less than the $24 billion 
that you talked about.
    And I absolutely believe it is a central investment that we 
need to make and continue to make.
    The costs of cutting it are devastating to families. They 
raise healthcare costs. They raise other costs for local 
communities, because when families are not housed, they 
actually cost us more.
    Senator Merkley. Well, I have looked at just a small number 
of these tax loopholes, including the oil tax loopholes, the 
one that basically subsidizes the offshoring of our jobs, our 
manufacturing. Just four of them total up to about $90 billion, 
or roughly the same amount as the sequestration for the coming 
year.
    Doesn't it make sense for us to shut down some of these 
loopholes and basically protect programs that support core 
services to the middle class and get our act together on having 
both the budget process and the appropriations process in a 
regular order?
    Anyone is welcome.
    Mr. Werfel. Yes, absolutely, absolutely.
    Senator Merkley. Okay. Well, I am out of time. And thank 
you very much, Madam Chair.
    Chairwoman Mikulski. I would like to now turn to Senator 
Cochran.
    Senator Cochran, you weren't here when I thanked you during 
the time of Senator Inouye's passing, where you were the 
ranking member. I know under the Republican rules, there was a 
change because of term limits. But I really thank you, and I am 
going to reiterate it with you here.
    Your big help during that time was really very, very much 
appreciated, and all the courtesy you extended to me, the way 
our staffs worked together, and then the way we worked together 
to move Hurricane Sandy. And as I said, your steady hand, your 
wise and seasoned advice and experience, and even direct 
guidance to me, was really very much appreciated, and your 
service to the Nation.
    And I think it helped during the really awkward time, and 
even a sad time of transition, you were just terrific. And I 
just wanted to say that publicly.
    So I would like to turn to you now for your questions.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Well, I deeply appreciate your generous 
comments and your friendship over the years. We appreciate your 
leadership on this committee, too.
    I think this has been an example of a hearing that has 
really gotten into the details.
    These are real challenges that we face, too little money 
trying to solve too many problems. And there is never enough to 
go around, but somebody has to decide.
    We have to identify the priorities, and we have to work 
together, whether we like it or not. The administration can't 
just send out edicts--``this is how much money each Department, 
agency, or program is going to get.''
    So this hearing is very important. I think it has been an 
excellent hearing, due in large part to the evenhanded and 
common-sense leadership of our chairwoman, Senator Mikulski, 
and to all the members of the committee who have been here and 
put their best efforts into carrying out our responsibilities.
    We thank our witnesses, especially. It has been a long day, 
and I am going to shut up and not prolong it any further 
unnecessarily.
    I did want to make a comment or two about sequestration. I 
am just learning how to pronounce it, to be honest.
    But the whole point is that we are operating under some new 
restraints and guidelines, if you will. But in general, the 
sequester, as it is written, cuts off all appropriated accounts 
at the same percentage across the board. Unless there are 
priorities identified by this committee or by the Congress in 
consultation with the executive, we are not going to be able to 
carry out the will of the people as expressed through the 
Congress and our Appropriations Committee.
    It would be a misguided effort if we turned it all over to 
the administration, though, to come in and rewrite an 
appropriations bill.
    So I think we are going to learn by doing, and we look 
forward to working with the executive branch in a cooperative 
way, recognizing that any changes or modifications are going to 
require the collective involvement of both branches of 
Government, and not just one telling the other what needs to be 
done.
    I don't have any other specific questions, except to 
express our appreciation for your cooperation and to thank the 
chair for her leadership.
    Thank you.
    Chairwoman Mikulski. Senator Reed, you are the chairman of 
the Subcommittee on the Interior, Environment, and Related 
Agencies?

                     STATEMENT OF SENATOR JACK REED

    Senator Reed. Yes, I am, Madam Chairwoman. Thank you.
    And I want to add not only my best wishes for your service, 
but also thank Senator Cochran for his service as the ranking 
member. So thank you both.
    And thank you, panel.
    Let me ask Secretary Donovan a question. We worked together 
on a bipartisan basis to pass the HEARTH Act, which was 
directed at helping homeless veterans, particularly, but 
homelessness in general. And it is disturbing to learn that 
about 100,000 formerly homeless people may be removed from 
current housing or emergency shelters if the sequestration goes 
through.
    Is that the reality?

 HOMELESS EMERGENCY ASSISTANCE AND RAPID TRANSITION TO HOUSING ACT OF 
                                  2009

    Secretary Donovan. Senator, that is the reality. And as you 
know, the Homeless Emergency Assistance and Rapid Transition to 
Housing (HEARTH) Act of 2009 was bipartisan, because we 
recognized both that we need to do more on homelessness. It is 
not only the right thing to do morally; it is also the right 
thing to do from a fiscal perspective.
    And Senator Boozman earlier made the point that veterans 
programs were protected. In fact, our VASH program would be 
protected from sequestration. But the fact is, 10 percent of 
all the people we serve in our homeless programs, our regular 
homeless programs not the VASH program, are veterans.
    Veterans are 50 percent more likely to be homeless than the 
average American. It is a tragedy.
    And for us to cut funding and to lose what would probably 
be 10,000 veterans from our housing and be back on the streets 
would be tragic.
    The other thing I would just point out, the cuts in funding 
for the public housing programs and the voucher programs more 
broadly mean that the fees go down. Last year, we had six 
housing authorities turn back vouchers for homeless veterans--
unthinkable--because there wasn't adequate funding.
    These cuts, I am afraid, even if VASH is protected, would 
lead to more housing authorities turning those vouchers back.
    And as I said earlier, it is perverse because the truth is 
that we would be ``housing'' those folks in shelters, in 
prisons, in emergency rooms, in places that are much more 
expensive than the housing that we provide.
    So not only would we have terrible human costs, we would 
also be raising the fiscal costs to the taxpayer by making 
these cuts in this indiscriminate way.
    Senator Reed. Well, you have raised a theme that I heard 
Secretary Carter echo before the Defense Subcommittee, the 
Armed Services Committee, is that one of the great ironies here 
is this sequestration could end up costing us more money than 
saving it.
    And, Secretary Carter, can you elaborate on that, in terms 
of bringing workforces back, lost efficiencies, lost time?
    Dr. Carter. All of our programs that are required to be 
stretched out will increase their unit cost, in many cases 
dramatically. We are forcing our industry to make rapid 
adjustments, from which they will find it hard to recover, and 
it will be expensive to recover. All those costs get passed on 
to us.
    So what you will see is us paying more in the long run for 
everything we do, which is a great tragic irony, because we are 
all trying to save the taxpayers' money or do the most we can 
with the taxpayers' money, and this makes it impossible.

                               CONTRACTS

    Senator Reed. Just one further quick point, Secretary 
Carter. At some point do you anticipate you will have to just 
break contracts and pay penalty fees because you just don't 
have the funds to do it?
    Dr. Carter. I don't think that we would like to take that 
particular path in most cases. We may have to do that in some 
cases.
    What really will happen is that we won't be able to enter 
into contracts in the future, particularly ones that both we 
and our industry partners have anticipated, a shipbuilding 
contract or something we are going to go in. They are tooled 
up, they are staffed up to do it, and we can't enter into the 
new contract.
    And finally, these aren't contract terminations, but we are 
failing to exercise options as the year goes on for maintenance 
and base operations and so forth. So those aren't contract 
terminations. We won't have to pay a fee for that. But they are 
a big deal for the people who do the work. We are going to stop 
paying them.
    Senator Reed. I have just a few seconds left. But, 
Secretary Napolitano, some of my colleagues, and we are all 
searching for ways to offset the cost of the sequestration, 
some have suggested not filling positions as a way to pay for 
this.
    Particularly with respect to CBP and some of your other key 
national security components, what would that do if you 
literally couldn't fill positions as people retire or leave or 
positions become available?
    Secretary Napolitano. Well, I think that the result, 
Senator, will be that we will be less able to secure the border 
between the ports. We will end up staffing fewer lanes at the 
actual ports. There will be disruptions in Coast Guard 
activities, disruptions in airport activities, big disruption 
in cargo and cargo inspections, which delays the whole supply 
chain coming into the country. So there will be many, many 
deleterious effects.
    Senator Reed. Thank you.
    Thank you, Madam Chairwoman.
    Chairwoman Mikulski. Senator Graham, the ranking member on 
Foreign Operations.

                  STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Madam Chairman.
    And I want to echo what has been said about your 
leadership. I think the committee is functioning very well in a 
dysfunctional time.
    So this is an oasis I like coming to.
    About sequestration, I think we have used every adjective 
known to man to say this is dumb.
    Can we just all agree this is a dumb thing?
    Mr. Werfel. Yes.

                           NATIONAL SECURITY

    Senator Graham. Okay. Well, all right. Good.
    Now, the question is how dumb?
    Now, are the Iranians watching us, in terms of our national 
security?
    Dr. Carter. They absolutely are.
    Senator Graham. What signal would it be sending to the 
Iranians to begin to dismantle your force as they try to ramp 
up their nuclear program?
    Dr. Carter. I think it very directly shows a failure of 
resolve, that we are not serious about implementing our new 
defense strategy. That is the kind of signal, whether it is 
Iran or North Korea or anybody else, that I am very concerned 
about.
    They are watching us right now and seeing whether we have 
the resolve to carry out our----
    Senator Graham. Do you think we are still at war outside of 
Iran with radical Islamic groups?
    Dr. Carter. We are.
    Senator Graham. Now, Secretary Napolitano, what signal will 
it be sending to people who are trying to come here illegally 
if we stop securing our border?
    Secretary Napolitano. Well, we have done so much over the 
past----
    Senator Graham. You have.
    Secretary Napolitano [continuing]. 5 years, 4 years, to 
really get that border more secure. We would just go backward, 
at a critical time, at a time when the Congress also wants to 
look at the whole immigration system.
    So sequestration just runs counter to everything else we 
are trying to do.
    Senator Graham. So sequestration undercuts all the gains we 
have made in terms of securing our border, and it certainly 
sends the wrong signal to radical Islamists and the Iranian 
threat. Do you agree with that, Mr. Carter?
    Dr. Carter. I do. I do.
    Senator Graham. Now, you have suggested that you would 
reduce your pay by one-fifth?
    Dr. Carter. Yes, I will.
    Senator Graham. How did you arrive at that number?
    Dr. Carter. Because if we sequester someone in our 
workforce to the maximum extent possible under the law, which 
we don't want to have to do but we are going to have to do in 
many cases, they will lose 1 day a week, one-fifth of their 
paycheck. And I don't think it is right that they lose one-
fifth of their paycheck and I don't, even though I can't be 
sequestered because I am a Presidential appointee.
    Senator Graham. Well, we can't be sequestered either, but I 
think it would be very wise for us to follow your lead as 
Members of the United States Senate, that if we can't figure 
this out with the President, that all of us ought to follow 
your model. And for every day that sequestration is in effect, 
the President should have his pay docked and we should have our 
pay docked just to show that we don't live completely on a 
different planet, which some people think we do.
    So thank you for the suggestion.

          SEQUESTER IMPACT ON THE NATION'S ABILITY TO COMPETE

    Secretary Duncan, how do you compete in the 21st century 
without investing in education?

                          EDUCATION INVESTMENT

    Secretary Duncan. It makes it difficult, Senator. And, 
again, if you look at other countries that are already doing a 
great job educating, like South Korea where by lots of 
benchmarks they are ahead of us, in the past 8, 9 years, they 
are up more than 30 percent in terms of their investment.

            DIVERSITY OF STUDENTS OBTAINING GRADUATE DEGREES

    Senator Graham. Have you been to any graduations lately for 
people receiving a master's and Ph.D.s in the hard sciences?
    Secretary Duncan. It is a very diverse group graduating 
from those classes.
    Senator Graham. Okay.
    Well, I went to Clemson University and University of South 
Carolina, and when it came to the Ph.D. and master's graduates 
in the hard sciences, there is one guy named Bob Smith that 
everybody clapped for because everybody else was coming from 
India and China, which is a great thing. I wish we had more 
native-born Americans getting into the hard sciences, but we 
need to welcome people from throughout the world to come here 
and get an education.
    Do you agree with that, Secretary Duncan?
    Secretary Duncan. Absolutely.
    Senator Graham. And, Secretary Napolitano, we should make 
it easier for them to stay and be part of our country; you 
agree with that?
    Secretary Napolitano. Absolutely.
    Senator Graham. I just don't see how you fix our education 
and immigration system if we are going to cut the budgets like 
this.
    One final question, if we found ourselves in, sort of, 
budgetary triage, where we keep doing this dumb thing, and this 
dumb thing has a momentum of its own, and it begins to take a 
life of its own, and I am up here having to decide where the 
money goes, would you agree with me, Secretary Duncan, and I 
know you don't like this position you would find yourself in, 
but if I had to pick between the Department of Education and 
DOD, should I pick DOD over your Department?
    Secretary Duncan. Again, I think these are false choices. 
And there is a----
    Senator Graham. But if I had to make that dumb decision, do 
all of you agree that the number one priority of the Federal 
Government should be national security?
    Secretary Duncan. I think we have to be able to walk and 
chew gum at the same time.
    Senator Graham. I know, but apparently we can't.
    Secretary Duncan. I have more hope. You have got a great 
chairwoman here. You have got some leadership. I think you guys 
have a chance----
    Senator Graham. Would anybody give a direct answer to that 
question?
    Would you, Secretary, if I had to pick between the DHS and 
DOD, who should I pick?
    Secretary Napolitano. Well, I am joining with my colleague. 
It is a false choice. It presents a false dichotomy.
    Senator Graham. What if it becomes a real choice?
    Secretary Napolitano. Secretary Carter already said, in his 
testimony, I don't know whether you were here or not, but he 
said, look, you have to have well-educated people if you are 
going to have an adequate defense. They go together.
    Senator Graham. I will just wrap it up by saying I want to 
tell the country it is a dumb choice. But if I have to make 
that choice, I am going to pick DOD. And I hope I don't ever 
have to make that choice.
    Chairwoman Mikulski. Was that entrapment?
    Is that question entrapment?
    Senator Graham. Thank you for indulging me.
    Chairwoman Mikulski. First of all, we are about to wrap up, 
as you can see. This has been an excellent hearing. In terms of 
the members participating, we had a 98-percent participation 
rate, and that was excellent.
    I have one final question that I will exercise, and it will 
be directed only to OMB.
    Here we are, picture March 1. It is now midnight. The clock 
has moved, and there it is.
    Can you paint for me the picture of how the sequester is 
triggered? In other words, do all of the lights go out in 
Federal buildings? Do furloughs trigger so we tell the NIH 
researcher, the welder at the shipyard, the person managing the 
weather satellite, the CBP guard, don't show up every Monday 
now until the Congress acts?
    Could you paint for me, literally, what happens when the 
phrase ``sequester'' is triggered on March 1? What will that 
look like?
    Mr. Werfel. What it will look like, it will be 
multidimensional in its negative impacts.

                           START OF SEQUESTER

    First, you will see intense bargaining going on with unions 
getting ready to issue furlough notices for hundreds of 
thousands of employees across the Federal Government.
    Chairwoman Mikulski. So that is not going on now?
    Mr. Werfel. That is going on now. But as we go across--this 
takes time. And that is what the world will--and once we get 
into an area where the sequestration order is issued, now it is 
real, and it is serious.
    I am not saying it is not real and serious now. But then it 
becomes law.
    And that is an important symbolic moment. Federal 
contractors will receive word of how their contracts will be 
impacted, whether terminated, whether modified. They will start 
getting an understanding of where our agencies won't be 
investing in contracts. States and locals, Governors will be 
digesting information about how their financial footprint will 
be impacted, how it is going to impact their ability to sustain 
their government operations in areas like education and health 
and other areas.
    The list goes on and on. The reality is, is that agencies 
are going--because we are in a 7-month timeframe, agencies are 
going to have to move quickly to meet this budget cut. And we 
are doing the preparatory steps right now to get ready.
    But once March 1 hits, and those funds are canceled, 
everything that we are doing in preparation right now becomes 
even more real and creates that much more uncertainty, that 
much more----
    Chairwoman Mikulski. I understand that.
    Mr. Werfel. Yes.
    Chairwoman Mikulski. But is it then, like the first month, 
the issuing of notices to people?
    Mr. Werfel. You will see a combination--yes, that will----
    Chairwoman Mikulski. Will the lights go out? People are 
told they are furloughed. The word triggers the sequester----
    Mr. Werfel. It is complicated. There are some----
    Chairwoman Mikulski. I know.
    Mr. Werfel [continuing]. Elements of Government operations 
that will feel the more immediate impact.
    So, for example, because of furloughs, we talked about the 
meat-packing element. Now, are the furloughs going to occur 
March 1? No, it is going to take some time, due to legal 
requirements.
    So what the world looks like on March 1 is very intense 
pre-staging actions that are taking place that are sending out 
notices and warnings and all kinds of different elements of how 
the sequester is going to play out.
    Some of that is going to occur before March 1. But it is 
different from a Government shutdown. Government shutdown means 
that, effective at midnight, you can no longer incur any more 
obligations and things do actually shut down.
    Chairwoman Mikulski. No, and that is scheduled to happen 
March 27.
    Mr. Werfel. If there is not an appropriations bill, yes. 
But I think, with the final moments, let me just emphasize this 
point. I do not think that it would be prudent at all to assume 
that, because the lights don't shut out across the Government 
on March 1, that we can go across that precipice and then pull 
back later.
    We have had analogies of the wolf being outside the door or 
wolf being in the room. The reality is I think it becomes 
extraordinarily problematic and serious, some of these economic 
consequences, once we hit March 1, because then it is real, and 
then a lot of these things come to fruition in a more 
exponential way.
    Chairwoman Mikulski. Well, and I think it could turn into a 
firestorm.
    Well, first of all, let me thank the witnesses. You really 
presented excellent testimony. You answered things in a very 
forthright, candid, crisp way, and it is very much appreciated.
    I want to also note that some other agencies were invited, 
like HHS. They had to be in Chicago with Rahm Emanuel. You make 
your choices and see what happens.
    Other agencies have submitted letters, and for those that 
we wanted to ask questions, like VA, Agriculture, that is why 
we really appreciated OMB here to do that.

         SEQUESTRATION RESPONSES FROM DEPARTMENTS AND AGENCIES

    I want to tell the members, and for the record, we have 
letters from every agency, thanks to the cooperation of OMB. 
They will now be entered into the public record, and also 
staffs on both side of the aisle will be able to scrutinize 
them while we now work on this.
    [The information follows:]
                       Department of Agriculture
    Thank you for your letter of January 18, 2013, requesting 
additional information on the impact of potential across-the-board 
spending cuts on the Department of Agriculture's (USDA) operations. 
Like you, I am very concerned about the impact of the March 1 sequester 
on the American economy, specifically in the areas of food, 
agriculture, natural resources, rural development, nutrition, and 
related issues.
    Since fiscal year 2010, USDA's operating budget has been reduced by 
about $3 billion, or 12 percent. As part of our Blueprint for Stronger 
Service, USDA has saved taxpayers millions in travel and printing costs 
and is consolidating more than 700 different cell phone contracts into 
about 10. We are also pursuing other cost reduction efforts in several 
areas such as sourcing uniforms from the AbilityOne Strategic Alliance, 
standardizing bulk mail and processes, and implementing a ``Shared 
First'' acquisition policy to consolidate IT-related acquisitions. 
What's more, the Department is achieving significant savings by closing 
more than 250 domestic and foreign offices while ensuring that the 
vital services they provide are not cut.
    If Congress does not act before March 1, it is estimated that the 
across-the-board spending cuts would indiscriminately reduce funding 
for USDA programs further by almost $2 billion in fiscal year 2013. 
About two-thirds of these cuts would come from programs funded by 
discretionary appropriations under the committee's jurisdiction. While 
the Department is still developing plans on how to operate under a 
sequester, agencies have already taken actions in addition to those 
mentioned above to prepare for additional funding reductions through 
prudent practices such as hiring freezes and limiting operating costs. 
Should a sequestration occur, we would likely need to implement 
furloughs impacting about one-third of our workforce, as well as other 
actions. These furloughs and other actions would severely disrupt our 
ability to provide the broad range of public services we administer. 
Examples of these programmatic impacts include:
  --A reduction of 600,000 low-income women and children who could 
        receive nutrition assistance and associated nutrition education 
        and breastfeeding support through the Special Supplemental 
        Nutrition Program for Women, Infants, and Children (WIC). WIC 
        has been shown to provide important improvements in nutrition 
        of women and children, lower healthcare costs, and improved 
        cognitive development of children.
  --A nationwide shutdown of meat and poultry plants during a furlough 
        of inspection personnel. The furlough could result in as much 
        as 15 days of lost production, costing roughly over $10 billion 
        in production losses, and industry workers would experience 
        over $400 million in lost wages. Consumers would experience 
        limited meat and poultry supplies, and potentially higher 
        prices, and food safety could be compromised.
  --Elimination of rental assistance for more than 10,000 very low 
        income rural residents, generally elderly, disabled, and single 
        female heads of households. With an average monthly income of 
        approximately $803, these Americans are the least able to 
        absorb rent increases and would face very limited options for 
        alternate housing if landlords increase rents to cover the loss 
        of the rental assistance payments.
  --A curtailing of conservation technical and financial assistance to 
        approximately 11,000 producers and landowners, thereby limiting 
        benefits to water quality and quantity, soil erosion, and 
        wildlife habitat that benefit the public.
  --Increased risk to communities from wildfires with as many as 
        200,000 fewer acres treated for hazardous fuels.
  --A loss of over $60 million resulting in more than 100 fewer grants 
        awarded for agricultural research conducted by both university 
        scientists and private partners, disrupting critical progress 
        being made in many topical areas such as water, nutrient 
        management, bioenergy production, animal and plant disease, and 
        childhood obesity.
  --A reduction in assistance to States for pest and disease 
        prevention, surveillance, and response, potentially leading to 
        more extensive outbreaks and economic losses to farmers and 
        ranchers.
  --Furloughs and other reductions in a number of USDA agencies that 
        would limit the ability to provide program oversight, leading 
        to potentially higher levels of erroneous payments and/or 
        fraud. Even small increases in improper payments have large 
        public costs given the magnitude of programs involved,
    Additional information on impacts covering selected accounts is 
enclosed.
    In addition to impact to programs under the committee's 
jurisdiction, one-third of USDA's sequestered funds would come from 
mandatory programs, including those authorized through the Farm Bill, 
While plans are still being developed on how the sequester would be 
implemented for these programs, reductions have the potential to impair 
important elements of support for agriculture and the environment, 
including disaster assistance, conservation, and export enhancement 
programs.
    I deeply hope that congressional leaders will reach an agreement to 
achieve deficit reduction while averting an across-the-board cut. I 
look forward to working with Congress to preserve the many priorities 
of rural America while making sensible program reforms and reductions 
that will lead to deficit reduction.
                  additional sequestration information
Bureau: Food and Nutrition Service
Program: Special Supplemental Nutrition Program for Women, Infants, and 
    Children (WIC)
Sequestration Amount: $333 million
Impact
            Grants to States
    WIC is a federally funded program. If funding is inadequate to 
maintain the current caseload--as it would be under sequestration--
State WIC programs would have to reduce participation and establish 
waiting lists using the priority system provided in regulation.
    A full year continuing resolution, coupled with sequestration, will 
result in a budget authority of about $6.3 billion. Using all available 
resources, including carryover and all contingency funds, will allow 
the program to support about 8.6 million participants--a reduction of 
approximately 300,000 participants on an annual basis from last year or 
about 600,000 participants if the reductions are compressed in the last 
two quarters of the fiscal year.
    Even before sequestration occurs, States may begin to implement 
cost-cutting strategies sometime in February. These strategies could 
range from reducing clinic hours, closing clinics, to establishing 
waiting lists as a last resort.
    When funds are not sufficient to support caseload, WIC agencies 
implement a priority waiting list of individuals. The first to lose 
benefits would be non-breastfeeding postpartum women and individuals 
certified solely due to homelessness or migrancy. African-American 
women have the lowest breastfeeding rates so they are more likely to 
represent a significant proportion of these women.
    Nutrition Services and Administration funding provided to States 
would be reduced by about $75-$100 million from the fiscal year 2012 
level, which could result in up to 1,600 State and local jobs lost.

Bureau: Food Safety and Inspection Service (FSIS)
Program: Salaries and Expenses
Sequestration Amount: $51 million
Impact
    Sequestration would result in an across-the-board furlough of as 
much as 15 days for all FSIS employees, including inspectors. Since 
Federal law mandates inspection of meat, poultry, and egg products, 
production will shut down for that time period, impacting approximately 
6,290 establishments nationwide. Due to lost production volume of more 
than 2 billion pounds of meat, an additional 2.8 to 3.3 billion pounds 
of poultry and over 200 million pounds of egg products, the industry 
would experience a production loss of over $10 billion. Consumers would 
experience a shortage of meat, poultry, and egg products available for 
public consumption, and the shortage may result in price increases for 
these products. Restaurants, grocers, local merchants, and others who 
rely on FSIS-inspected products would suffer multiplier effects from 
the shortfall in production. The impact could force smaller businesses 
and merchants out of business. Industry workers would also be 
furloughed, resulting in over $400 million in lost wages. The livestock 
industry would also incur additional costs for disruption of the 
pipeline from farms to production establishments as farmers and 
livestock producers would have to feed and store animals longer than 
anticipated.
    FSIS would also eliminate export inspections, resulting in losses 
for U.S. producers and causing additional storage costs and or loss of 
product. Export inspections could adversely affect other nations since 
the volume of products would decline. Furthermore, public food safety 
could be compromised by the illegal selling and distribution of 
uninspected meat, poultry, and egg products. Because FSIS is also 
responsible for verifying the safety of imported products, cutting 
import inspections would result in a reduction of 154 to 178 million 
pounds of imported meat, poultry, and egg products entering the 
country, in addition to the lost production capacity within the United 
States. Cutting import inspections might be construed as an 
international trade issue. Moreover, there is limited storage space 
along the border so that unless foreign countries stopped shipments, 
chill/frozen storage capacity and refrigerated truck/train/ship 
capacity would be compromised.

Bureau: Rural Development, Rural Housing Service
Program: Rental Assistance
Sequestration Amount: $46 million
Impact
    The Rental Assistance Program provides assistance to eligible low-
income tenants in USDA-financed multi-family housing so that Americans 
pay no more than 30 percent of their incomes for rent. Approximately 
286,000 tenants receive the benefit of rental assistance in almost all 
of the apartment complexes financed by Rural Development. The 
sequestration would cause more than 10,000 current recipients to lose 
rental assistance. The average monthly income of families and 
individuals receiving rental assistance (generally female-headed 
households, elderly, and the disabled) is approximately $803. These 
Americans are the least able to absorb any increase in the rent due to 
the loss of rental assistance. Loss of this rent supplement may cause 
property owners to increase rents, making the units unaffordable to the 
very low income residents who have few options for decent, affordable 
housing.
    With the loss of rental assistance, or higher vacancies resulting 
from very low-income Americans being unable to afford higher rents, 
many properties will be unable to pay all of their operating costs. 
Owners may be unable to maintain the property and allow it to fall into 
disrepair, or the properties may become delinquent in their loan 
payments. Potentially, 411 projects may become delinquent by October 
2013. Ongoing delinquencies will lead to defaults and foreclosure and 
may result in long-term loss of affordable housing in rural communities 
in future years.
    The loss of rental assistance supporting new construction of Farm 
Labor housing would result in the loss of affordable housing for 
approximately 28 farm workers and their families; the loss of rental 
assistance supporting construction of multi-family assisted housing 
would result in the loss of affordable housing opportunities for 17 low 
or very low income families.

Bureau: Natural Resources Conservation Service (NRCS)
Program: Conservation Operations and Farm Security and Rural Investment 
    Programs
Sequestration Amount: $222 million
Impact
    NRCS will implement a hiring freeze and reduce travel and other 
costs. This will impact NRCS' ability to ensure timely, complete 
conservation planning activities and delivery of financial assistance, 
which would affect program accomplishments and service to farmers and 
ranchers nationwide. This would result in longer timeframes to address 
these challenges continuing to put at risk the business operations of 
the agency. In addition, NRCS would implement significant cuts in 
agreements and contracts with non-Federal entities by over $20 million 
in technical assistance and about $109 million in financial assistance. 
These reductions will have a deleterious impact on the ability to 
provide technical and financial assistance services to conservation 
customers, resulting in reduced conservation opportunities and reduced 
natural resource benefits with short and long effects on the Nation's 
private lands,
    Overall, these cuts will undercut the ability to support priorities 
including landscape-scale conservation, water quality improvements, 
wildlife habitat protection, open space protection, as well as natural 
infrastructure restoration, carbon sequestration, weather prediction 
capacity, plant material development and other programs and services 
that support extreme weather and climate change adaptation and 
mitigation.

Bureau: Farm Service Agency (FSA)
Program: Farm Loan and Salaries and Expenses
Sequestration Amount: $80 million
Impact
    Sequestration would require reductions of $80 million in FSA 
salaries and expenses and farm credit programs. The following 
highlights address some of the impacts of these reductions.
    FSA Program Management.--The sequestration would reduce the 
spending authority for FSA salaries and administrative expenses by 
about $75 million. In order to accomplish this reduction, FSA will 
implement a number of actions including hiring freezes, reducing 
contract operations for both Information Technology (IT) and non-IT 
operations, eliminating States flown in the National Aerial Imagery 
Program, and furloughing employees up to 5 days. FSA employees are 
responsible for managing a wide range of programs including farm loans, 
conservation and disaster activities with budgets totaling over $11 
billion annually. Reduced ability to effectively manage these major 
nationwide programs will limit the ability to provide timely support to 
producers during the ongoing extreme, widespread drought and will erode 
the capability to provide oversight to limit erroneous payments.
    Farm Loan Programs.--FSA provides direct loans to family farmers 
and ranchers who cannot obtain commercial credit from a bank or other 
lender. The program is an important source of credit for beginning 
farmers, who tend to have limited resources and as a result, are less 
likely to meet commercial credit standards. Extreme drought conditions 
prevailing in significant areas of the Nation that have weakened the 
financial condition of agricultural producers significantly increase 
the importance of these loan programs. Operating loans are used to 
purchase items such as livestock, feed, farm equipment, fuel, farm 
chemicals, insurance, minor improvements or repairs to buildings, 
refinance farm-related debt excluding real estate and other operating 
costs, including family living expenses. Sequestration would reduce the 
budget authority for Farm Credit Programs by approximately $5.4 million 
($35.6 million in program level), meaning that 890 fewer direct farm 
operating loans and 661 other farm loans could be made. The 
sequestration of farm loan funding could result in a loss of over 1,650 
private sector jobs (plus the hundreds of farmers that would be forced 
out of farming and into the off-farm job market), reduce the GDP by 
more than $259 million, and could reduce household income by $44 
million.

Bureau: Forest Service
Program: Wildland Fire Management
Sequestration Amount: $134 million
Impact
    This level of reduced funds would result in an appropriated funding 
level that is $42 million below the calculated 10-year average of fire 
suppression costs for fiscal year 2013. In addition, a reduction of 
preparedness funds typically increases suppression costs since the 
initial attack success will be reduced. Additionally, 2012 fire 
transfer funds are subject to sequestration, which results in needing 
to recover $20 million of funds repaid. The agency would complete as 
many as 200,000 fewer acres of hazardous fuel treatments, resulting in 
an increased risk to communities from wildfires.
    Certain decisions may result in increased costs in the end. For 
example, the agency could reduce upfront costs by reducing use of 
exclusive use aviation contracts, 115 engines, and 10 hotshot crews. 
However, this could result in larger fires, which will result in higher 
expenditures.

Bureau: Forest Service
Program: National Forest System (NFS)
Sequestration Amount: $78 million
Impact
    The agency's essential services to the public will be reduced for a 
variety of high demand activities (recreation, forest and watershed 
restoration, grazing, mining and oil/gas operations) as a result of 
reduced operations at campgrounds, visitor information centers, and 
offices. This would largely occur during the peak use seasons in spring 
and summer. Thousands of private sector jobs in rural communities 
across the Nation would be lost due to a reduction of recreation 
opportunities, and minerals and oil and gas operations, which are 
completed through contracts, grants, and agreements.
    The agency would close up to 670 public developed recreation sites 
out of 19,000 sites, such as campgrounds, picnic areas, and trailheads. 
Closing this many recreation sites would reduce an estimated 1.6 
million recreation visits across the country, thereby harming the 
economies of remote rural communities that depend on recreationists' 
economic activity, and eliminating convenient vacation opportunities 
for rural residents.
    Increased risks to health and safety for visitors to the 193 
million acres of public lands would occur as a result of reductions of 
35 sworn law enforcement officers, leaving 707 total officers to 
control drug trafficking organizations, prevent crime, and protect and 
serve the public. The reduction in sworn officers would result in an 
increase of illegal activities on National Forest System lands, like 
arson during fire season, timber theft, and other natural resource 
crimes.
    Forest and watershed restoration work would be curtailed. Timber 
volume sold would be reduced to 2,379 million board feet from 2,800 
million board feet proposed for fiscal year 2013. The agency would 
restore 390 fewer stream miles, 2,700 fewer acres of lake habitat and 
improve 260,000 fewer acres of wildlife habitat.

Bureau: National Agricultural Statistics Service (NASS)
Program: Census of Agriculture and Agricultural Estimates
Sequestration Amount: $8 million
Impact
    NASS is responsible for the collection and analysis of a broad 
range of agricultural statistics and completion of the Census of 
Agriculture. These statistics provide information critical to 
decisionmaking by a wide population of stakeholders and ultimately 
benefit all consumers by enhancing orderly and unbiased market 
conditions for agricultural products. Sequestration would stop fiscal 
year 2013 scheduled activities for the census, causing data processing 
to be placed on hold and potentially not recoverable. Data will become 
incomplete and will not be statistically sound for publication. Not 
having the 2012 census will negatively affect decisions made by 
farmers, businesses, and governments and ultimately will bring 
volatility to food markets and impact prices consumers pay. Data 
collected by the census includes the number of farms, value of land, 
market value of agricultural production, and inventory of livestock and 
poultry.
    NASS' annual agricultural estimates reports are critically 
important to assess the current supply and demand in agricultural 
commodities. These unbiased, timely reports are extremely valuable to 
producers, agribusinesses, farm organizations, commodity groups, 
economists, public officials, and others who use the data for 
decisionmaking. The statistics disseminated by NASS support fairness in 
markets ensuring buyers and sellers have access to the same objective 
official statistics at the same pre-announced time. This prevents 
markets from being influenced by ``inside'' information, which might 
unfairly affect market prices for the gain of an individual market 
participant. The efficiency of commodity markets is enhanced by the 
free flow of information, which minimizes price fluctuations for U.S. 
producers. Statistical measures help the competitiveness of our 
Nation's agricultural industry and have become increasingly important 
as producers rely more on world markets for their sales. There is no 
other source for the statistical surveys, estimates, and reports NASS 
produces.
                                 ______
                                 
                         Department of Commerce
    Thank you for your letter of January 18, 2013, requesting 
information on impacts of sequestration. As you know, unless Congress 
acts to amend current law, the President is required to issue a 
sequestration order on March 1, 2013, canceling approximately $85 
billion in budgetary resources across the Federal Government, of which 
$551 million is from the Department of Commerce (Department).
    Sequestration would have both short-term and long-term impacts on 
the Department's ability to deliver on critical parts of our mission 
and would have a sizable economic cost for the Nation. All bureaus 
would see impacts to their missions as they implement hiring freezes, 
curtail or cancel training, and halt critical program investments 
needed to strengthen performance and improve efficient use of taxpayer 
dollars. All of these would have a harmful impact on our Department's 
ability to deliver services to America's businesses and keep our 
economy moving forward on the path of recovery. The Department is 
working hard to provide services in a cost-efficient and service-
positive manner. We take our trust of taxpayer dollars seriously. As 
you have requested, I am providing you with some specific impacts to 
the Department below.
    The Department's National Oceanic and Atmospheric Administration 
(NOAA) would see significant impacts. Communities across the country 
rely on NOAA every single day to preserve property, protect lives, 
prepare for extreme weather events, adapt to a changing world, and to 
enhance economic prosperity. NOAA's central mission of science, 
service, and stewardship touches the lives of every American and these 
cuts would negatively impact the ability for NOAA to effectively 
provide the products and services communities have come to rely upon.
    As with all our agencies, these impacts are not abstract. They 
directly affect NOAA employees and partners throughout the country: up 
to 2,600 NOAA employees would have to be furloughed, approximately 
2,700 positions would not be filled, and the number of contractors 
would have to be reduced by about 1,400. If sequestration is enacted, 
NOAA will face the loss of highly trained technical staff and partners. 
As a result, the Government runs the risk of significantly increasing 
forecast error, and the Government's ability to warn Americans across 
the country about high impact weather events, such as hurricanes and 
tornadoes, will be compromised.
    Forced reductions in funding for fishery stock assessments, at-sea 
observers, and support for the regional fishery management councils 
jeopardize NOAA's ability to open fisheries that are economically 
important to our coastal communities, such as ground fish in New 
England and along the west coast, red snapper in the gulf, and the 
Nation's largest fisheries in Alaska. In addition, with these 
reductions in data and support for scientific analysis, NOAA will be 
forced to manage fisheries throughout the Nation more conservatively, 
which could mean smaller quotas and earlier closures as protections 
against overfishing. The economic impacts of these measures are 
unknowable at this point, but could be significant.
    Significant and costly impacts to NOAA's satellites and other 
observational programs are also certain. For example, sequestration 
will result in a 2-3 year launch delay for the first two next-
generation geostationary weather satellites (currently planned to 
launch in 2015 and 2017), which track severe weather events such as 
hurricanes and tornadoes. This delay would increase the risk of a gap 
in satellite coverage and diminish the quality of weather forecasts and 
warnings. Sequestration will also reduce the number of flight hours for 
NOAA aircraft, which serve important missions such as hurricane 
reconnaissance and coastal surveying. NOAA will also need to curtail 
maintenance and operations of weather systems such as NEXRAD (the 
national radar network) and the Advanced Weather Interactive Processing 
System (used by local weather forecast offices to process and monitor 
weather data), which could lead to longer service outages or reduced 
data availability for forecasters.
    Marine transportation contributes $1 trillion and 13 million jobs 
to the American economy. NOAA provides nautical charts and real time 
observations, such as tides and water levels, to prevent ship 
groundings and supports the movement of commerce by sea and through the 
Great Lakes. Under sequestration, navigational safety, and therefore 
commerce, would be hampered due to reduced surveying, charting, 
geospatial and observing services.
    All told, there would be significant impacts in NOAA's ability to 
meet its mission to preserve Americans' property, protect lives, 
prepare for extreme weather events, adapt to a changing world, and to 
enhance economic prosperity. It is unclear that future years of 
investment will be able to undo some of the damage--especially to the 
economics of America's fisheries and to our weather preparedness.
    Sequestration would have to cut a total of $46 million from the 
Department's Census Bureau. The Census Bureau will be forced to 
significantly cut contract dollars and not fill hundreds of vacancies, 
pushing back research and testing for the 2020 Decennial Census as well 
as seriously delaying the release of critical economic and demographic 
data needed for this calendar year.
    The last benchmark of economic statistics supporting America's 
assessment of Gross Domestic Product (GDP) and other key economic 
indicators was taken in 2007, prior to the recession. If the 
sequestration cuts move forward, the Census Bureau will be forced to 
impose a 6-month delay in releasing vital statistics for these 
indicators, putting at risk our ability to take accurate stock of 
current economic conditions and well-being and potentially impacting 
policymaking and economic decisions in the private sector.
    Furthermore, delays in developmental work for the 2020 Decennial 
Census will increase the risk that the Census Bureau will not be ready 
to make major departures from past operational designs that are 
intended to save money without diminishing quality. The Census Bureau 
has committed to executing a Census that would cost less per household 
in real dollars. Cuts now are virtually guaranteed to force the Census 
Bureau to ask for larger investments later, putting at risk that goal 
of achieving more significant savings.
    Cuts to the Department's Economic Development Administration (EDA) 
would hinder the bureau's ability to leverage private sector resources 
to support projects that would spur local job creation. The sequester 
would likely result in more than 1,000 fewer jobs than expected to be 
created, and more than $47 million in private sector investment is 
likely to be left untapped. In addition, EDA would be forced to impose 
administrative furloughs of roughly 6.5 days for each of its employees. 
These cuts would limit EDA's ability to be a strong partner to States 
and local communities in helping our country rebound from one of the 
worst recessions since the Great Depression.
    The cuts at the Department's National Institute of Standards and 
Technology (NIST) would largely fall on grants, contracts, equipment 
procurements, deferment of open positions, and cuts in the repair and 
maintenance of NIST facilities that will negatively impact NIST's 
ability to keep them in acceptable working condition. While cutting in 
these areas will enable NIST to maintain its core scientific workforce, 
the forced reductions would negatively impact NIST's ability to deliver 
on its mission in other ways. For example, the elimination of some 
contracts and grants within the Scientific and Technical Research and 
Services would result in the elimination of at least 100 research 
associates at NIST who are important for the support of scientific 
research activities. The proposed cuts will also result in delayed or 
canceled equipment purchases needed to support work in critical areas 
such as advanced materials, advanced manufacturing, and alternative 
energy. In addition, if the sequestration moves forward, NIST will be 
forced to end work it is currently doing through the Manufacturing 
Extension Partnership (MEP) Center system to help America's small 
manufacturers innovate their business practices, make cost-effective 
improvements to their businesses, develop market growth strategies both 
at home and abroad, streamline their supply chains, and determine which 
technology investments make sense for their future. At a time when 
America's small and medium sized enterprises need help the most, 
programs like MEP warrant strong support. NIST will also be forced to 
delay efforts to help return small manufacturing enterprises back to 
the United States from offshore locations.
    An important component of the Department's Bureau of Industry and 
Security (BIS) national security mission is to engage directly with 
end-users of sensitive controlled commodities and determine whether 
these items are being used in accordance with license conditions. If 
sequestration moves forward, BIS will be forced to significantly cut 
travel specifically in support of these checks, which will hinder BIS's 
ability to pursue some known threats to our national security.
    The Department's International Trade Administration (ITA) would be 
forced, under sequestration, to reduce its support for America's 
exporters, trimming assistance to U.S. businesses looking to increase 
their exports and expand operations into foreign markets by nearly $15 
million. In addition, ITA will not be able to place staffers in 
critical international growth markets, where there is a clear business 
opportunity for many American businesses to increase their sales and 
create jobs at home. These staff would have been part of a key program 
working to promote and facilitate global investment into the United 
States, supporting thousands of new jobs through foreign direct 
investment. Furthermore, Federal trade enforcement, compliance, and 
market access activities would be cut by nearly $7 million, leading to 
fewer actions by the Federal Government to reduce trade barriers and 
ensure compliance with trade laws and agreements.
    Sequestration will also force a cut of $4.9 million from the 
Department's Bureau of Economic Analysis (BEA). BEA will have to 
terminate work on key programs that help businesses and communities 
better understand GDP, foreign direct investment, and the impact of 
changes to economic activity within a specific regional economy (e.g., 
the economic impact related to Sandy).
    Once again, thank you for your support of the Department, and we 
are happy to answer any specific questions you may have.
                                 ______
                                 
                         Department of Defense
    On January 22, 2013, you wrote to me asking for information about 
the effects of sequestration on national security. I want to provide 
you with our most current information.
    For the next several months, and perhaps for the rest of fiscal 
year 2013, the Department of Defense (DOD) faces some extraordinary and 
serious budgetary challenges, the most serious of which is the 
sequester scheduled to begin on March 1, 2013. This sequester would cut 
9 percent from all parts of the DOD budget except for military 
personnel. Although wartime or Overseas Contingency Operations (OCO) 
funding is subject to sequestration, we must and will protect wartime 
operations funding for our troops in harm's way. This will inevitably 
mean larger cuts in the base-budget funding for the Operation and 
Maintenance (O&M) accounts.
    The current continuing resolution poses an additional challenge 
because funding is in the wrong appropriations--there is too much in 
the investment accounts and not enough in the O&M accounts. If the 
continuing resolution as currently structured remains in effect 
throughout the year, we would be significantly short of the base-budget 
dollars needed to meet fiscal year 2013 needs for O&M. Adding to our 
problems are OCO shortfalls that are occurring, among other reasons, 
because of higher-than-expected operating tempos and the sluggish pace 
associated with the reopening of the ground lines of communication in 
Pakistan.
    All of these problems together yield shortfalls in the O&M accounts 
of our Military Departments of about $35 billion, leaving us more than 
20 percent below the levels requested for fiscal year 2013. Percentage 
shortfalls for the Department of the Army, especially, are 
significantly higher. Moreover, if the sequester takes place, we would 
have as few as 7 months to accommodate these large shortfalls.
    Given this enormous budgetary uncertainty, we have begun taking 
near-term actions to slow spending, especially in our operating 
accounts, and we are planning more far-reaching changes should 
sequestration and the continuing resolution remain in effect throughout 
fiscal year 2013.
Near-Term Actions
    On January 10, the Deputy Secretary of Defense issued guidance 
permitting all DOD Components to take actions to slow spending. To the 
extent feasible, these actions are designed to be reversible if the 
budgetary situation improves, and they should minimize effects on 
military readiness. We are just now getting reports about the specific 
nature of the changes; so I do not yet have complete details. But I can 
provide examples of likely changes.
  --Most Components will institute civilian hiring freezes, with 
        exceptions for mission-critical activities. Because DOD hires 
        1,500 to 2,000 people a week, this will quickly lead to 
        personnel shortfalls, skill imbalances, and declines in 
        capability--not to mention fewer available jobs. Unfortunately, 
        the adverse effects are likely to be felt most heavily by 
        veterans, because they make up 44 percent of the DOD civilian 
        workforce. Effects will be felt nationwide--86 percent of our 
        civilians work outside the Washington, DC metropolitan area.
  --Most Components will begin laying off temporary and term employees, 
        again with exceptions for mission-critical activities. As many 
        as 46,000 jobs could be affected.
  --Most Components will curtail facilities maintenance and renovation. 
        More than $10 billion in funding--mostly to contractors--could 
        be affected.
  --As of February 15, some Components will begin cancelling ship and 
        aircraft maintenance work for the third and fourth quarters of 
        fiscal year 2013. Unless we can reverse these actions, the 
        result will eventually be fewer weapons available for 
        deployment in future contingencies.
  --We will also take many other steps, including further curtailing 
        travel and conferences, restructuring contracts to reduce their 
        scope and cost, reviewing studies for cancellation or 
        postponement, and sharp cutting back on base operating support.
Under Year-Long Sequester/Continuing Resolution
    Although significant, these near-term actions will not be nearly 
enough to accommodate a year-long continuing resolution and 
sequestration. If these unfortunate events occur, we will have to take 
more drastic and irreversible actions. We do not have comprehensive, 
detailed information at this time, but I can provide examples. Together 
these actions will lead to a readiness crisis, a crisis in healthcare 
funding, and widespread disruption in our investment programs. Examples 
of actions include:
  --All Components will have to take the steps necessary, including 
        congressional notification, to furlough civilians for up to 22 
        days. This action will have devastating effects on both 
        productivity (these people fix our weapons, staff our 
        hospitals, and much more) and morale (pay cuts of up to 20 
        percent for almost 6 months).
  --The Army will reduce training and maintenance for later deploying 
        units. By year's end, the Army expects that about two-thirds of 
        its active brigade combat teams (other than those in 
        Afghanistan) will be at reduced readiness levels.
  --The Navy will be forced to cut back on operations in critical areas 
        such as the Pacific. Cutbacks of one-third could occur in 
        Pacific naval presence.
  --The Air Force will be forced to cut flying hours and weapon system 
        maintenance. Most Air Force flying units (especially later 
        deploying units) will be below acceptable readiness standards 
        by the end of fiscal year 2013.
  --TRICARE could be short up to $3 billion in needed funds, which 
        could lead to denials of elective services for active-duty 
        dependents and retirees. We are investigating ways to reduce 
        this problem.
  --DOD will have to make cuts of roughly 9 percent in each of more 
        than 2,500 investment line items--actions that will lead to 
        delays in weapon programs and increases in unit costs.
    Since October 2011--almost 18 months ago--DOD officials have stated 
repeatedly that sequestration and a year-long continuing resolution 
would have devastating effects. Indeed we have testified several times 
before Congress to the very effects that are identified in this letter. 
Now, regrettably, these consequences are upon us.
    But there is time to act. We still very much hope that Congress can 
reach an agreement on a balanced package of deficit reductions that the 
President can sign and that leads to de-triggering of sequestration and 
enactment of regular appropriation bills. If necessary, we hope that 
Congress delays sequestration long enough to permit it to reach a 
budget agreement. These actions must of course occur very soon if we 
are to avoid inflicting serious damage on our military and our national 
defense.
                                 ______
                                 
                        Department of Education
    Thank you for your letter regarding the impact that sequestration 
would have on the programs and operations of the Department of 
Education, and, to the extent known, on State and local educational 
programs. As you know, I share your concern about the negative impact 
sequestration would have on the education of our Nation's children and 
adults.
    Education is the last place to be reducing our investment as the 
Nation continues to climb out of the recent recession and to prepare 
all of its citizens to meet the challenges created by global economic 
competitiveness in the 21st century. Indeed, I can assure you that our 
economic competitors are increasing, not decreasing, their investments 
in education, and we can ill afford to fall behind as a consequence of 
the indiscriminate, across-the-board cuts that would be required by 
sequestration.
    In answering this letter, our analysis has assumed that 
sequestration would be subtracted from funds available under a full-
year continuing resolution. As you know, the continuing resolution that 
runs through March 27 provides funds at the same level and under the 
same laws and conditions as the 2012 appropriation.
    Sequestration would create significant hardship for America's K-12 
schools and postsecondary institutions. In general, the hardship will 
be concentrated in the 2013-2014 school year, because most Federal 
education funds for the current school year were provided in the fiscal 
year 2012 appropriations act. For example, the $14.5 billion Title I 
Grants to Local Educational Agencies (LEAs) program and the $11.6 
billion Individuals with Disabilities Education Act Part B Grants to 
States program are forward-funded, meaning that funding for a given 
fiscal year becomes available on July 1 of the fiscal year and funds 
operations in the following school year.
    However, there are important exceptions to this general rule, and 
some key programs would feel the impact of sequestration immediately. 
For example, the Impact Aid programs are funding activities during the 
current school year. The recipients of these programs receive a high 
percentage of their overall funding from the Federal Government. That 
means sequestration would eliminate roughly $60 million from the $1.2 
billion in funds for Impact Aid Basic Support Payments for schools that 
are counting on those funds to meet the essential needs of students and 
to pay teacher salaries this spring, potentially forcing districts to 
make wrenching, mid-year adjustments in ongoing programs. Many 
districts are facing potential elimination of instructional and 
noninstructional staff and delaying needed building maintenance for 
buildings already in serious disrepair.
    An example of the fiscal impact on these programs is that the 
Killeen Independent School District in Texas, which has 23,000 
federally connected children, including 18,000 military dependents, 
would lose an estimated $2.6 million in Impact Aid funds. Similarly, 
the Gallup-McKinley County Public Schools in Gallup, New Mexico, would 
lose nearly $2 million of the funds the district receives from the 
Impact Aid program to help meet the educational needs of 7,500 
federally connected children, including 6,700 who live on Indian lands. 
This impact is severe, given that Impact Aid funds make up 35 percent 
of the district's total education budget.
    In the Vocational Rehabilitation State Grants program, funds are 
used to provide services to individuals with disabilities to help them 
become employed. The grants fund operations during the current fiscal 
year, and the Department provides about 80 percent of these operational 
funds. Thus, sequestration would immediately eliminate approximately 
$160 million from funds supporting activities that help these 
individuals prepare for, obtain, or retain employment. In particular, 
counselor caseloads would likely increase, as well as wait times for 
individuals to receive essential vocational rehabilitation services, 
hurting the effort to lower the unemployment rate for these 
individuals, which already is significantly higher than that of the 
general population.
    For other Federal education programs that are forward-funded, the 
fact that the impact of sequestration would not be felt until the 2013-
2014 school year would not lessen the negative effects on students, 
families, and teachers. We know from survey data that about 80 percent 
of school districts would not be able to make up the losses from 
sequestration, a finding that should not be surprising given that State 
and local budgets are only just beginning to recover from the recent 
financial crisis and economic recession. Any inroads they have made to 
rebuild or restructure programs as the economy recovers and tax 
revenues increase would be substantially undermined by a significant 
loss in Federal education funds.
    In particular, sequestration would hit hard at Federal, State, and 
local efforts to improve educational opportunities for the Nation's 
neediest students and their families. Title I Grants to LEAs serve 
nearly 23 million students in high-poverty schools and Special 
Education State Grants help SEAs and LEAs provide a free appropriate 
public education (FAPE) to roughly 6.5 million special needs students. 
Sequestration would reduce title I funding by some $725 million, 
potentially eliminating support to an estimated 2,700 schools serving 
1.2 million disadvantaged students, while also putting at risk the jobs 
of approximately 10,000 teachers and aides serving these students. 
Formula grants to States received under part B of the Individuals with 
Disabilities Education Act could be reduced by as much as $598 million, 
which would require States and districts to cover the cost of 
approximately 7,200 teachers, aides, and other staff needed to provide 
a FAPE for students with disabilities, placing additional burden on 
cash-strapped States and districts.
    To implement these reductions for the coming school year, local 
districts will be making decisions in April and May about which jobs to 
cut and which teachers to renew. Districts will have to plan on less 
funding. Fewer teachers and staff could mean larger class sizes, fewer 
courses or subject areas, less tutoring for struggling students, 
reductions in counseling, and more difficulty in retaining recently 
hired teachers. And, local economies will suffer from the higher 
unemployment or uncertainty of the staff.
    The law specifically exempts the Pell Grant program from 
sequestration. The law also has a special rule on student loans that 
specifies a small increase in the origination fee for loans made after 
the sequester order. This origination fee change would require 
adjustments in systems and records for those getting loans later in 
school year 2012-2013 and early in school year 2013-2014.
    Cutting administrative funds for Student Aid programs will affect 
the servicing of student loans serviced by Not-For-Profit (NFP) loan 
servicers. Sequestration could require each NFP servicer payment to be 
reduced. The impact of reducing payments to student loan servicers 
would be significant and could adversely impact as many as 29 million 
student loan borrowers. NFPs may have to lay off or furlough many of 
their contract employees in States such as Pennsylvania, Wisconsin, 
Missouri, Tennessee, Iowa, and Utah. Some smaller NFPs may run 
operational risks and even be forced to close, disrupting service and 
potentially causing issues with payment processing for all student and 
parent borrowers they service.
    In addition, the Department's ability to collect student debt and 
provide quality services to borrowers once they are out of school would 
likely be hampered, due to possible cuts in contracts with the private-
sector entities that service Federal student loans. To underscore the 
magnitude of the risk in this area, during the 2011-2012 award year the 
Department delivered or supported the delivery of approximately $172 
billion in grant, work-study, and loan assistance to almost 15 million 
postsecondary students attending more than 6,000 postsecondary 
institutions.
    The sequester would also likely require the Department to furlough 
many of its own employees for multiple days. This would significantly 
harm the Department's ability to prevent fraud, waste, and abuse in 
these very large, complex student financial assistance programs.
    Furloughing employees would also hurt all the Department's other 
activities, including making grant awards on a timely basis.
    I hope this information has given you a clear idea of the threat to 
America's education system posed by sequestration. I hope that you and 
other Members of Congress will work to avoid sequestration, and I stand 
ready to help in any way I can.
    Thank you for your continuing support of our Nation's education 
programs.
                                 ______
                                 
                          Department of Energy
    Thank you for your letter regarding the impacts of potential 
across-the-board spending cuts, otherwise known as ``sequestration,'' 
facing Government agencies on March 1, 2013. I share your concern for 
the Government's, and specifically for the Department of Energy's (DOE 
or the Department), ability in the face of such cuts to make the 
investments needed to grow our economy through basic scientific 
research and advances in clean energy technology, secure our Nation 
through the stewardship of our nuclear stockpile, and meet our 
obligations to clean up the environmental legacy of the cold war.
    Sequestration would affect thousands of jobs among Federal, 
contractor, and grant awardee personnel, affecting these people 
individually and reducing the Department's ability to serve the 
American people. The cuts would come 5 months into the fiscal year, 
forcing the Department to absorb the spending reduction in a 7-month 
period. While the Department has assiduously followed the direction of 
Congress and operated at prescribed levels during the current 
continuing resolution, such reductions would be difficult to absorb 
while continuing to sustain the same level of progress on our mission.
    The effects of sequestration are particularly damaging because, by 
law, they apply equally to each program, project, and activity within 
an account, thereby severely constraining our ability to prioritize and 
make tradeoffs among activities under reduced funding scenarios. Being 
able to focus and prioritize funds and effort in a reduced funding 
environment is critical to maintaining the human and physical capital 
needed to accomplish our mission; the way sequestration must be 
implemented withholds this essential discretion from my staff and me.
    Per your request, I am providing a description of the impacts that 
sequestration would have on the Department of Energy's operations, 
infrastructure, and critical initiatives.
Basic Scientific Research
    DOE's Office of Science is the largest supporter of the physical 
sciences in the United States and the operator of 10 world-class 
national laboratories. Funding cuts to DOE's basic science mission 
would be severe. First, operations at numerous facilities would be 
curtailed, potentially impacting more than 25,000 researchers and 
operations personnel who rely on these facilities to make advances both 
in basic science and in developing advanced commercial technologies. 
Second, sequestration would cause schedule delays and increased costs 
for new construction of user facilities throughout the Office of 
Science that are poised to contribute significantly to many areas of 
our understanding of nature. Finally, research grants would need to be 
reduced both in number and size affecting researchers at our national 
laboratories and at universities around the country; the pipeline of 
support for graduate student and post-graduate research fellowships 
would be constricted in a way that hurts our long-term economic and 
technological competitiveness.
Clean Energy Technology
    The Department of Energy works across energy sectors to reduce the 
cost and speed the adoption of clean energy technologies. These efforts 
range from cost-competitive high-efficiency solar installations to 
carbon capture and storage to next generation biofuels and high-
efficiency vehicle technologies. Under sequestration, funding 
reductions would decelerate the Nation's transition into a clean energy 
economy, and could weaken efforts to become more energy independent and 
energy secure, while spurring overall economic growth. For example, a 
reduction in funding would slow down the significant advances made in 
making solar energy cost-competitive with conventional forms of 
electricity generation, as well as cut funding for solar industry job 
training that is targeted at military veterans and provided to 261 
community colleges. It would also hinder U.S. innovation as global 
markets for solar energy continue to grow rapidly and become more 
competitive. In addition, a cut to the Department's Vehicle 
Technologies Program would delay the program's efforts to leapfrog the 
current technologies in critical areas of advanced vehicles, batteries, 
and lightweight materials, slowing American development of cleaner and 
more efficient vehicles as affordable as today's vehicles. Reducing the 
cost of manufacturing these clean energy technologies is a key goal of 
the administration's efforts and sequestration would negatively impact 
our Advanced Manufacturing program by delaying initiation of 2-3 
industrial research and development project co-investments for at least 
a year or requiring shutting down a Manufacturing Demonstration 
Facility for 6-8 months.
    Further, the Department of Energy provides assistance to low-income 
families by making their homes more energy efficient through funding 
provided to States, territories, and tribes. Funding reductions under 
sequestration will reduce by more than 1,000 the number of homes that 
would be weatherized in fiscal year 2013 and could result in the 
unemployment of 1,200 skilled weatherization professionals. Reductions 
of the magnitude associated with sequestration likely would also 
threaten the ongoing viability of some State programs delivering these 
home efficiency upgrades, closing the associated training centers, with 
a concurrent loss of professional retrofit certification capability.
    In just 4 years Advanced Research Projects Agency--Energy (ARPA-E) 
projects have achieved significant technical breakthroughs, including 
doubling the energy density of lithium batteries, dramatically 
shrinking the size and increasing the capacity of high-power 
transistors, and engineering microbes that can turn hydrogen and carbon 
dioxide into transportation fuel. Reduced funding in the clean energy 
area would scale back the Department's ability to spur such 
accomplishments, slowing progress toward a transformed, 21st century 
energy sector.
    The Department works to improve the security and reliability of the 
Nation's electrical grid by working with utilities and transmission and 
distribution companies to reduce risk of impacts from natural 
disasters, cyber attacks, and other human-generated events. Reduced 
funding would scale back these efforts, including research to detect 
and mitigate cyber attacks and monitoring of space weather events 
through deployment of technology and facilitating information sharing 
within the electricity sector on best practices for protection and/or 
mitigation when such solar flares occur.
National Security
    DOE plays a critical national security role in developing and 
maintaining the Nation's nuclear deterrent, securing nuclear materials 
around the world, supporting the Navy's nuclear propulsion systems for 
its fleet, and conducting intelligence and counterintelligence 
activities. Cuts under sequestration would total $900 million and 
result in degradation of critical capabilities in this area. In the 
area of our nuclear weapons stockpile, critical efforts to refurbish 
and extend the life of several weapons systems would be delayed, 
leading to increased costs and impacts to deployment and readiness in 
the future. Our security posture at sites and facilities would be 
eroded due to project deferrals and workforce reassignments. Further, 
these cuts would degrade the internal oversight function of DOE nuclear 
facilities and reduce the depth and frequency of audits and evaluations 
needed to ensure ongoing robust security operations.
    Among the impacts to the Nation's nuclear nonproliferation 
capability, reduced funding would cause delays and increased costs to 
efforts to secure and convert surplus nuclear materials around the 
world. Finally, work utilizing special nuclear materials would be 
impacted, affecting nonproliferation and emergency response training, 
and spent fuel stabilization activities.
    In the Naval Reactors program, sequestration would risk Naval 
Reactors' responsiveness to operational fleet support issues, and it 
would delay the design and development effort of the Ohio-class 
replacement nuclear reactor. It also would delay the refueling of a 
training reactor New York that trains Navy personnel in reactor 
operations, thereby reducing the number of qualified sailors trained to 
operate reactor plants on submarines and aircraft carriers. In 
addition, cuts would delay by 1 year an essential facility in Idaho for 
handling spent fuel from Navy vessels.
Environmental Cleanup
    The Department of Energy runs one of the largest environmental 
cleanup and remediation programs in the world in addressing the legacy 
of cold war nuclear weapons production at sites around the country. 
Sequestration would curtail this progress, delaying work on our highest 
risks at sites in Washington State, Tennessee, South Carolina, and 
Idaho. In addition, the Department is in legally binding agreements 
with State and Federal regulators to make progress in addressing 
environmental contamination, and funding reductions would put numerous 
enforceable environmental compliance milestones at risk, calling into 
question the Federal Government's commitment to protect human health 
and the environment.
    As these examples demonstrate, sequestration would impact both the 
economic and national security of this country, and I appreciate your 
leadership in avoiding such cuts. I look forward to working with you 
and other Members of Congress on behalf of the administration in this 
area to avoid these impacts in a responsible and well-considered 
manner.
                                 ______
                                 
                Department of Health and Human Services
    Thank you for your letter regarding the automatic, across-the-board 
spending cuts set to occur on March 1, 2013. I share your concerns 
about the potential consequences of these cuts on the critical social 
service, public health and scientific research, and healthcare coverage 
and oversight programs administered by the Department of Health and 
Human Services (HHS). As the examples below illustrate, our efforts to 
protect the health and enhance the well-being of all Americans, as well 
as our commitments to grantees, contractors, and State and local 
governments, would be significantly impacted by the potential 
sequester.
Social Services
    Sequestration would hinder the Department's work to support 
American children and families. For example, up to 70,000 children 
would lose access to Head Start and Early Head Start services. This 
impact would be felt across the Nation, with community and faith-based 
organizations, small businesses, local governments, and school systems 
laying off over 14,000 teachers, teacher assistants, and other staff. 
Services for children and families would be disrupted, with some Head 
Start centers needing to close their classrooms early this school year 
or reopen their programs late in the fall. Programs would have to cut 
services, staff, and classrooms for the 2013-2014 school year. In 
addition, sequestration would further impact our ability to help 
families succeed by leaving up to 30,000 children without child care 
services. Without a safe and secure environment for their children, 
working parents would have a difficult time seeking or keeping 
employment.
    Sequestration could compromise the health and well-being of more 
than 373,000 seriously mentally ill adults and seriously emotionally 
disturbed children who potentially would not receive needed mental 
health services, which could result in increased hospitalizations and 
homelessness. In addition, we expect that 8,900 homeless persons with 
serious mental illness might not receive the vital outreach, treatment 
and housing, and support that they need to help in their recovery 
process. Admissions to inpatient facilities for people in need of 
critical addiction services could be reduced by 109,000, and almost 
91,000 fewer people could receive substance abuse treatment services.
    Our Nation's seniors would also feel the impacts of sequestration. 
In particular, congregate and home-delivered nutrition services 
programs would serve 4 million fewer meals to seniors.
    The cuts required by sequestration could slow efforts to improve 
the delivery of healthcare to American Indians and Alaska Natives 
through the Indian Health Service (IHS) and would result in about 3,000 
fewer inpatient admissions and 804,000 fewer outpatient visits provided 
in IHS and Tribal hospitals and clinics. IHS may lack resources to pay 
for the staffing and operations of five healthcare facilities that 
tribes have built with their own resources, with a total tribal 
investment of almost $200 million.
    Sequestration would impair the Department's ability to prevent and 
treat HIV/AIDS. The cuts to the Centers for Disease Control and 
Prevention (CDC) translate into approximately 424,000 fewer HIV tests 
conducted by CDC's health department grantees. The Health Resources and 
Services Administration estimates that 7,400 fewer patients would have 
access to life-saving HIV medications through the AIDS Drug Assistance 
Program (ADAP). This would cause delays in service and drug provision 
to people living with HIV and potentially lead to ADAP wait lists for 
HIV medications.
Public Health and Scientific Research
    Reduced funding for the Food and Drug Administration (FDA), 
including user fees, could increase risks to our Nation's food safety. 
FDA would conduct approximately 2,100 fewer domestic and foreign 
facility inspections of firms that manufacture food products to verify 
that domestic and imported foods meet safety standards. These 
reductions may increase the risk of safety incidents, and the public 
may suffer more foodborne illness such as the recent salmonella in 
peanut butter outbreak and the E. coli illnesses linked to organic 
spinach.
    Cuts to the National Institutes of Health (NIH) due to 
sequestration would delay progress on the prevention of debilitating 
chronic conditions that are also costly to society and on the 
development of more effective treatments for common and rare diseases 
affecting millions of Americans. In general, NIH grant funding within 
States, including Maryland, will likely be reduced due to both 
reductions to existing grants and fewer new grants. We expect that some 
existing research projects could be difficult to pursue at reduced 
levels and some new research could be postponed as NIH would make 
hundreds fewer awards. Actual funding reductions will depend on the 
final mix of projects chosen to be supported by each Institute and 
Center within available resources. With each research award supporting 
up to seven research positions, several thousand research positions 
across the Nation could be eliminated.
Healthcare Coverage and Oversight
    Under sequestration, payments to Medicare providers, health plans, 
and drug plans under title XVIII of the Social Security Act will be 
reduced by 2 percent. This would result in billions of dollars in lost 
revenues to Medicare doctors, hospitals, and other providers, who will 
only be reimbursed at 98 cents on the dollar for their services to 
Medicare beneficiaries.
    Sequestration would limit the Department's ability to realize 
savings produced through proven investments, such as the Health Care 
Fraud and Abuse Control program. For every dollar spent to combat 
healthcare fraud through our law enforcement work we have realized an 
over $7 return on investment. In fiscal year 2011 alone, we returned a 
record-breaking $4.1 billion to the Federal Government.
    I am eager to work with you and Congress to avoid the consequences 
that would result from sequestration. Thank you for your interest in 
this important issue.
                                 ______
                                 
                    Department of Homeland Security
    Thank you for your letter regarding the potential impacts of the 
March 1 sequestration. I share your deep concerns about the effects 
this unprecedented budget reduction to fiscal year 2013 funding will 
have on the Department of Homeland Security (DHS), its missions, and 
our Nation's security and economy.
    Reductions mandated by sequestration would undermine the 
significant progress the Department has made over the past 10 years and 
would negatively affect our ability to carry out our vital missions. 
Sequestration would roll back border security, increase wait times at 
our Nation's land ports of entry and airports, affect aviation and 
maritime safety and security, leave critical infrastructure vulnerable 
to attacks, hamper disaster response time and our Surge Force 
capabilities, and significantly scale back cyber security 
infrastructure protections that have been developed in recent years. In 
addition, sequestration would necessitate furloughs of up to 14 days 
for a significant portion of our frontline law enforcement personnel, 
and could potentially result in reductions in force at the Department. 
The following provides specific examples of the potential impacts of 
sequestration on the Department:
  --U.S. Customs and Border Protection (CBP) would not be able to 
        maintain current staffing levels of Border Patrol Agents and 
        CBP Officers as mandated by Congress. Funding and staffing 
        reductions will increase wait times at airports, affect 
        security between land ports of entry, affect CBP's ability to 
        collect revenue owed to the Federal Government, and slow 
        screening and entry programs for those traveling into the 
        United States.
  --U.S. Immigration and Customs Enforcement (ICE) would not be able to 
        sustain current detention and removal operations or maintain 
        the 34,000 detention beds mandated by Congress. This would 
        significantly roll back progress that resulted in record-high 
        removals of illegal criminal aliens this past year, and would 
        reduce ICE Homeland Security Investigations' activities, 
        including human smuggling, counter-proliferation, and 
        commercial trade fraud investigations.
  --The Transportation Security Administration would reduce its 
        frontline workforce, which would substantially increase 
        passenger wait times at airport security checkpoints.
  --The U.S. Coast Guard (USCG) would have to curtail air and surface 
        operations by nearly 25 percent, adversely affecting maritime 
        safety and security across nearly all missions areas. A 
        reduction of this magnitude will substantially reduce drug 
        interdiction, migrant interdiction, fisheries law enforcement, 
        aids to navigation, and other law enforcement operations as 
        well as the safe flow of commerce along U.S. waterways.
  --Furloughs and reductions in overtime would adversely affect the 
        availability of the U.S. Secret Service workforce, and hinder 
        ongoing criminal investigations.
  --Reductions in funding for operations, maintenance and analytical 
        contracts supporting the National Cybersecurity Protection 
        System (NCPS) would impact our ability to detect and analyze 
        emerging cyber threats and protect civilian Federal computer 
        networks.
  --The Federal Emergency Management Agency's Disaster Relief Fund 
        would be reduced by over $1 billion, with an impact on 
        survivors recovering from future severe weather events, and 
        affecting the economic recoveries of local economies in those 
        regions. State and local homeland security grants funding would 
        also be reduced, potentially leading to layoffs of emergency 
        personnel and first responders.
  --The Science and Technology Directorate would have to stop ongoing 
        research and development including: countermeasures for bio-
        threats, improvements to aviation security and cyber security 
        technologies, and projects that support first responders.
  --The Department would be unable to move forward with necessary 
        management integration efforts such as modernizing critical 
        financial systems. This would hinder the Department's ability 
        to provide accurate and timely financial reporting, facilitate 
        clean audit opinions, address systems security issues and 
        remediate financial control and financial system weaknesses.
    Hurricane Sandy, recent threats surrounding aviation and the 
continued threat of homegrown terrorism demonstrate how we must remain 
vigilant and prepared. Threats from terrorism and response and recovery 
efforts associated with natural disasters will not diminish because of 
budget cuts to DHS. Even in this current fiscal climate, we do not have 
the luxury of making significant reductions to our capabilities without 
placing our Nation at risk. Rather, we must continue to prepare for, 
respond to, and recover from evolving threats and disasters--and we 
require sufficient resources to sustain and adapt our capabilities 
accordingly. We simply cannot absorb the additional reduction posed by 
sequestration without significantly negatively affecting frontline 
operations and our Nation's previous investments in the homeland 
security enterprise.
    The Department appreciates the strong support it has received from 
Congress over the past 10 years. As we approach March 1, I urge 
Congress to act to prevent sequestration and ensure that DHS can 
continue to meet evolving threats and maintain the security of our 
Nation and citizens. Should you have any questions or concerns at any 
time, please do not hesitate to contact me at (202) 282-8203.
                                 ______
                                 
              Department of Housing and Urban Development
    I am writing in response to your letter of January 18, 2013 to the 
Department of Housing and Urban Development (HUD) concerning the 
effects of the across-the-board cuts that would result from the 
potential sequester now scheduled for March 1, less than 1 month from 
now. These reductions to HUD programs would be deeply destructive and 
would affect numerous families, individuals and communities across the 
Nation that rely on HUD programs.
    For example:
  --About 125,000 individuals and families, including elderly and 
        disabled individuals, could lose benefits from the Housing 
        Choice Voucher program and be at risk of becoming homeless.
  --These cuts would also result in more than 100,000 formerly homeless 
        people, including veterans, being removed from their current 
        housing and emergency shelter programs, putting them at risk of 
        returning to the streets.
  --Sequestration would result in 75,000 fewer households receiving 
        foreclosure prevention, prepurchase, rental, or homeless 
        counseling through Housing Counseling grants.
  --The impact of sequestration would force public housing agencies to 
        defer routine maintenance and capital repairs to Public 
        Housing, leading to deteriorating living conditions and, over 
        the long-term, risking the permanent loss of these affordable 
        units that serve 1.1 million of the Nation's poorest residents.
  --These cuts to the Housing Opportunity for Persons with AIDS program 
        would result in 7,300 fewer low-income households receiving 
        permanent and short-term supportive housing assistance, 
        including rent and/or utility assistance.
  --The reduced funding from the sequester would prevent State and 
        local communities that receive HOME grants from building and 
        rehabilitating 2,100 affordable housing units for low-income 
        families.
  --The sequester will also result in significant cuts to community 
        development funding for public services, facilities, and 
        infrastructure improvements, reducing jobs and adversely 
        impacting confidence in the long-term sustainability of the 
        private market rental housing that HUD supports.
    As the administration has made clear, sequestration is a blunt and 
indiscriminate instrument that was passed by bipartisan majorities in 
Congress to help ensure that action is taken on a balanced deficit 
reduction package, and the arbitrary cuts that it calls for should not 
take place.
    Thank you for your interest in the Department's programs and 
activities. Please let me know if I can provide you with any further 
information.
                                 ______
                                 
                       Department of the Interior
    Thank you for your letter dated January 22, 2013, requesting 
information from the Department of the Interior on the impact of a 
potential sequester of funds on our operations, employees, contractors, 
and, when known, the impact on the State and local economies where the 
Department operates or distributes funding.
    I understand your concern that the impact of the sequester may not 
be fully understood by Congress and the American public. In response to 
your letter, I have asked our bureaus and offices to provide 
information regarding the impacts they anticipate from a sequester. 
They have compiled several of the most significant identified impacts 
in a summary of which is enclosed.
    We appreciate the opportunity to provide this information about the 
serious impacts that sequestration will have on the Department's 
management of many of the United States most valuable and treasured 
natural, historical, scientific, and tribal resources.
    Please let me know if you have any questions or require additional 
information from the Department.
                       department of the interior
Assessment of Key Impacts from Sequestration
    Oil and Gas and Coal.--Development of oil, gas, and coal on Federal 
lands and waters would slow down due to cuts in programs that: Issue 
permits for new development, plan for new projects, conduct 
environmental reviews, and inspect operations. Leasing of new Federal 
lands for future development would also be delayed, with fewer 
resources available for agencies to prepare for and conduct lease 
sales. As a result:
  --Efforts to expedite processing of offshore oil and gas permitting 
        in the Gulf of Mexico would be thwarted by delays, putting at 
        risk some of the 550 exploration plans or development 
        coordination documents Bureau of Ocean Energy Management (BOEM) 
        anticipates for review this year.
  --Reductions would impact BOEM's oil and gas activities in the Alaska 
        region, including the processing of G&G seismic permits, review 
        and analysis needed for environmental assessments, work on 
        worst case discharge analysis for drilling permit reviews, and 
        air quality data gathering and modeling work with other Federal 
        agencies.
  --Approximately 300 fewer onshore oil and gas leases would be issued 
        in Western States such as Wyoming, Utah, Colorado, and New 
        Mexico, delaying prospective production from those lease tracts 
        and deferring payments to the Treasury.
  --Delays in coal leasing would defer as much as $50 to $60 million 
        from the Treasury for each sale delayed.
  --The FWS would conduct approximately 2,000 fewer consultations, 
        delaying economic development projects and energy facilities 
        that need environmental approvals.
    Visitor Impacts.--The public should be prepared for reduced hours 
and services provided by Interior's 398 national parks, 561 refuges, 
and over 258 public land units. Reductions would:
  --Reduce hours of operation for visitor centers, shorten seasons, and 
        possibly close camping, hiking, and other recreational areas 
        when there is insufficient staff to ensure the protection of 
        visitors, employees, and resources.
  --Require complete closure or program elimination at about 128 
        refuges. Visitor programs at nearly all refuges would be 
        discontinued.
  --Limit the Department's ability to sustain a full complement of 
        seasonal employees needed for firefighting, law enforcement, 
        and visitor services at the time when parks, refuges, and land 
        areas are preparing for the busy summer season.
    Local communities and businesses that rely on recreation to support 
their livelihoods would face a loss of income from reduced visitation 
to national parks, refuges, and public lands. The 435 million 
recreational visits to Department managed lands in 2011 supported about 
403,000 jobs nationwide and contributed nearly $48.7 billion to local 
economies.
    Cuts in Federal Payments to State and Local Governments.--States 
and local governments would lose over $200 million in direct funding 
from the Department for Payments in Lieu of Taxes (PILT), revenue 
sharing from mineral leasing on Federal lands, and various grants. 
Local governments, particularly in Western States, rely on these funds 
to cover their base budgets and they would have to cut back on core 
operations ranging from police and fire protection to school and road 
maintenance.
  --Impacted would be the States' share of revenue from energy and 
        mineral production within their borders and offshore on the 
        Outer Continental Shelf. Last year more than $2.1 billion was 
        disbursed to 36 States and counties in 9 States. Wyoming, New 
        Mexico, Utah, California, Colorado, and North Dakota are among 
        the largest revenue recipients facing cuts.
    States would also have to scale back on wildlife conservation work 
and access, which could affect local hunting, shooting, fishing, and 
boating. State and local economies depend on the associated revenue 
from hunters, anglers, and wildlife watchers who in 2011 spent $145 
billion on related gear, trips, and other purchases, such as licenses, 
tags, and land leases and ownership.
    Native American Programs.--Tribes would lose almost $130 million in 
funding from the Department. Reductions would be necessary in many 
areas including human services, law enforcement, schools, economic 
development, and natural resources.
  --Reductions will cut short the availability of assistance programs 
        to the neediest of Indian Country by 3 or 4 months. Payments 
        would stop to approximately 2,400 needy Indians for each month 
        the General Assistance program is shut down.
  --Cuts to Indian education programs will directly impact school 
        services and scholarships offered to attend schools in the 
        2013-2014 academic year. The Bureau of Indian Affairs (BIA) 
        schools would have the choice of reducing staff, services, or 
        the number of days in the school year.
  --Additionally, many tribes would be affected by reductions to funds 
        that offset administrative costs for tribal management of 
        Federal programs. Reductions to BIA's natural resource programs 
        would impact the development of conventional and renewable 
        energy and minerals on tribal lands.
    Water Challenges.--Some Bureau of Reclamation (BOR) facilities 
could be closed to the public due to unsafe conditions while necessary 
maintenance and repairs are delayed. High priority dam safety 
corrective modifications would be completed at a slower pace at several 
dams that pose potential risk to the downstream public. The BOR would 
be at risk for missing water deliveries related to environmental 
commitments in water districts across the West.
    The United States Geological Survey may have to discontinue 
operation of 350 to 375 stream gages used throughout the country to 
predict and address drought and flood conditions by monitoring water 
availability. Work would also stop on water availability studies in 
Delaware, Colorado, and the Apalachicola-Chattahoochee-Flint River 
basins.
                                 ______
                                 
                         Department of Justice
    Thank you for your letter dated January 18, 2013, requesting 
information about the impact of sequestration on the Department of 
Justice's (``the Department'' or DOJ) operations and employees. As you 
know, the administration continues to work with Congress on a balanced 
deficit reduction plan so that the untenable impacts of across-the-
board cuts to our vital programs can be avoided.
    A March 1, 2013, sequestration would cut over $1.6 billion from the 
Department's current funding level, which would have severe 
consequences for the administration of justice and serious consequences 
for our communities across the Nation. Combined with the impact 
sequestration would have on the Federal judiciary and the other 
Federal, State and local agencies that are part of the criminal justice 
system, the reductions to DOJ would delay or deny access to justice for 
millions of Americans.
    As I explain below, sequestration would not be merely a series of 
abstract cuts to a faceless Federal bureaucracy; these would be cuts 
that impact not just DOJ employees, they would impact our citizens, and 
our safety, in every city and town in the country.
    During the past year, the Department has carefully considered a 
variety of options to prioritize available resources to minimize the 
impact sequestration would have on our ability to prevent terrorism, 
fight violent crime, prosecute financial fraud, protect our most 
vulnerable citizens, and carry out the entirety of our critical 
mission. I have directed DOJ officials, when planning for a sequester, 
to mitigate the effects of sequestration on Federal workers as much as 
possible, given that our employees are our most important asset in 
achieving our mission. Unfortunately, the Department cannot achieve the 
cuts required by sequestration without furloughing staff this fiscal 
year.
    We need to issue furlough notices to employees at least 30 days, or 
in some cases 60 days, before implementing furloughs. We may need to 
issue some furlough notices in the coming weeks. Since every DOJ 
component has a different funding profile, the number of furlough days 
per employee would vary considerably across the Department. Staff-
intensive accounts would generally suffer higher furloughs than 
components with available balances from funds appropriated in prior 
years or more flexibility in non-personnel budgets. Important law 
enforcement and litigation programs supported by contract staff would 
also be disrupted as the Department is forced to curtail contracts to 
reach sequestration reduction targets, recognizing that some contracts 
cannot be modified without significant contractual penalties that would 
cost more than the potential savings.
    Due to the cuts required by sequestration, the Department estimates 
that it would lose the equivalent of more than 1,000 Federal agents to 
combat violent crime, pursue financial crimes, help secure the 
Southwest border, and ensure national security, as well as 1,300 
correctional officers to maintain the safe and secure confinement of 
inmates in Federal prisons. This would also result in the delay of 
activating prisons nearing completion, exacerbating the overcrowding of 
Federal prison space. The negative impact on prosecutions and civil 
cases will be severe, as outlined below. Most importantly, while some 
of the effects would be felt in Washington, DC, the impact would be 
most severe at the local level as our field investigative offices, 
prosecutors, the U.S. Marshals, and the Federal courts work to 
implement these spending reductions in coordination with each other.
    The following information illustrates the impact sequestration 
would have on select DOJ components:
  --Federal Bureau of Investigation (FBI).--The sequestration would cut 
        over $550 million from the FBI's current budget. To absorb this 
        reduction, the FBI is faced with furloughing all personnel, 
        including agents and intelligence analysts, for up to 14 days, 
        as well as implementing a hiring freeze. This would have the 
        equivalent effect of cutting approximately 2,285 onboard 
        employees, including 775 Special Agents. Sequestration will 
        also require the FBI to eliminate and/or reduce joint task 
        forces and partnerships with other Federal, State, and local 
        law enforcement, materially reducing FBI's investigative 
        capacity to address mortgage fraud, cybercrime, human 
        trafficking, terrorism, financial fraud, organized crime, to 
        name just a few of its critical mission areas. The reductions 
        would be the equivalent of shutting down three of the FBI's 
        largest Field Offices--Chicago, Miami, and Baltimore.
  --Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).--
        Sequestration would cut nearly $60 million from ATF and impact 
        its law enforcement operations and industry oversight 
        capabilities. This would significantly increase risks to public 
        safety and ATF's ability to respond to emerging violent crime 
        threats, in particular, those posed by gun violence. ATF would 
        be forced to reduce criminal investigations, firearms and 
        explosives industry inspections, firearms and explosive 
        applications and permits processing, and firearms tracing. 
        These reductions make no sense considering our emphasis on 
        fighting gun violence, and they would thwart the President's 
        plan (and the Nation's call) to protect our children and our 
        communities from gun violence.
  --Federal Bureau of Prisons (BOP).--The sequestration would cut $338 
        million from BOP's current budget. BOP would face a furlough of 
        nearly 36,700 onboard staff for an average of 12 days, plus 
        curtailment of future hiring, if sequestration occurs. This 
        equates to about a 5 percent reduction in onboard staff levels 
        and would endanger the safety of staff and over 218,000 
        inmates. As a consequence, BOP would need to implement full or 
        partial lockdowns and significantly reduce inmate re-entry and 
        training programs. This would leave inmates idle, increasing 
        the likelihood of inmate misconduct, violence, and other risks 
        to correctional workers and inmates. Further, limiting or 
        eliminating inmate programs such as drug treatment and 
        vocational education would, in fact, lead to higher costs to 
        taxpayers and communities in the long run as the lack of such 
        inmate re-entry training makes it less likely that released 
        inmates will be successful at reintegration into society upon 
        their release.
      Further, BOP would slow the ongoing activations of new prisons 
        that have completed construction during the last few years (FCI 
        Berlin, New Hampshire, and FCI Aliceville, Alabama). BOP would 
        not begin the fiscal year 2013 planned activations of FCI 
        Hazelton, West Virginia, or USP Yazoo City, Mississippi. BOP 
        would still incur costs to secure and maintain these prisons, 
        along with the prison in Thomson, Illinois. These five prisons 
        represent over 8,100 beds that BOP would not be able to utilize 
        fully at a time when our prisons are filled over rated 
        capacity. In addition, the communities surrounding the prisons 
        would not benefit from the significant economic activity that a 
        prison engenders. We estimate that sequestration will mean over 
        3,800 fewer jobs related to the prison activations that would 
        be foregone (including an estimated 1,500 private sector jobs).
      I am acutely concerned about staff and inmate safety should cuts 
        of the sequestration's magnitude hit BOP. To be blunt, 
        sequestration means less money, not fewer inmates. We would 
        still have the same number of inmates--over 218,000--after 
        sequestration as before. This kind of dangerous situation is 
        exactly why sequestration needs to be avoided and sensible, 
        balanced deficit reductions achieved. While I plan to take 
        every available step within my authority to aid BOP should 
        sequestration happen, these steps cannot mitigate the severity 
        of every cut faced by BOP.
  --U.S. Marshals Service (USMS).--The sequestration would cut nearly 
        $60 million from the USMS' current budget. USMS is facing the 
        need to furlough its 5,100 employees for up to 13 days (2 days 
        per pay period between April 1 and September 30) and implement 
        a hiring freeze. This would result in a reduced capacity to 
        apprehend violent fugitives, investigate sex offenders, protect 
        witnesses and the judiciary, and ensure safe and humane care 
        and transportation of prisoners. Fewer deputy marshals 
        partnered with State and local officers could increase violent 
        crime, gang activity, and the number of violent fugitives. 
        Because deputy marshals cannot forego tasks such as 
        transporting prisoners and guarding cell blocks, the 
        sequestration will reduce the USMS staff assigned to seek and 
        capture fugitives, such as the Florida sex offender found in 
        Texas on January 22, 2013 (http://www.usmarshals.gov/news/
        chron/2013/012313a.htm).
  --U.S. Attorneys (USA).--The sequestration would cut nearly $100 
        million from the USA's current budget. Using data on average 
        number of cases handled per attorney in fiscal year 2012, the 
        USAs would handle 2,600 fewer cases in fiscal year 2013 than in 
        fiscal year 2012--comprised of an estimated 1,600 fewer civil 
        cases and 1,000 fewer criminal cases. Fewer affirmative civil 
        cases and criminal cases will affect our ability to ensure that 
        justice is served: criminals that should be held accountable 
        for their actions will not be held accountable, and violators 
        of our civil laws may go unpunished. In addition, fewer cases 
        will have a significant impact on funds owed to the Government. 
        In fiscal year 2012, the efforts of DOJ personnel resulted in 
        total collections of nearly $14 billion in civil and criminal 
        fines, restitution and other debt. Staffing reductions, which 
        would result in fewer prosecutions, could drastically reduce 
        the USA community's ability to collect billions of dollars owed 
        to the Government.
  --Civil Division.--The sequestration would cut over $14 million from 
        the Civil Division's current budget and result in potential 
        furloughs of up to 7 days of every Division employee. Under 
        sequestration, the Division would be forced to move substantial 
        resources from affirmative to defensive matters to meet court-
        mandated filings in these cases. Reallocating resources may 
        avoid sanctions or default judgments, but protection of the 
        public fisc would be compromised, and the resulting drop in 
        revenue to the Treasury will exacerbate existing Government 
        budget shortfalls. In addition, many civil investigations and 
        prosecutions focus on stopping the sale and use of ineffective 
        medical products or devices. The Civil Division's litigation 
        work protects Americans in every community, whether by ensuring 
        the safety of our food and pharmaceutical products or 
        protecting millions of homeowners from predatory lending 
        practices. The Civil Division also investigates and prosecutes 
        healthcare providers that defraud the Medicare and Medicaid 
        programs by providing medically unreasonable and unnecessary 
        services that hurt our Nation's most vulnerable citizens, and 
        this critical work will be adversely impacted by sequestration.
  --Executive Office for Immigration Review (EOIR).--The sequestration 
        would cut over $15 million from EOIR's current budget. EOIR 
        would be forced to cease all hiring of key critical positions 
        for EOIR's immigration courts, including Immigration Judges, 
        likely increasing pending caseloads to well over 350,000 (an 
        increase of 6 percent over September 2012 levels). EOIR would 
        also be forced to reduce contracts for critical services, such 
        as interpreters, legal support, and information technology. 
        Sequestration would require the rescheduling of immigration 
        cases for aliens who are not in detention even further into the 
        future (into 2017). It would also result in delays for aliens 
        in immigration detention and individuals seeking asylum 
        protection.
    To limit the negative effects of the sequester for some of our 
components in the short term, the Department plans to leverage its 
limited reprogramming authority to transfer resources between 
activities within an account, as well as transfer authority to move 
funding from one appropriation to another. More discretionary and 
flexible programs, such as grants, will likely be required to 
``donate'' via transfer authority to components facing serious life 
safety or security issues, such as BOP, which faces a shortfall of more 
than $200 million even after furloughs of headquarters and regional 
staff, reductions in non-personnel spending, and the use of available 
balances from funds appropriated in prior years. The actions to 
ameliorate the deleterious effects of sequestration in some parts of 
the Department will have negative consequences on the other 
``donating'' elements of the Department.
    Sequestration will not be, as sometimes portrayed, a series of 
harmless and overdue ``cuts in Washington.'' Our 115,000 employees work 
across the Nation, in every State, in large cities and small towns 
alike. Every community will feel the reduction of our law enforcement 
presence due to sequestration; every community will feel the reduction 
to its local economy as our furloughed staffs and families are forced 
to reduce spending that supports local businesses. Sequestration will 
have profound impacts on our entire system of justice, our employees on 
a professional and personal level, and on the American people we serve. 
I urge Congress to work with the administration to pass a balanced 
reduction plan so that the negative impacts of sequestration will be 
avoided.
                                 ______
                                 
                          Department of Labor
    Thank you for your letter expressing your concern about the impacts 
of sequestration on operations within the Department of Labor. In the 
initial planning process, we have made every effort to protect the 
mission of the Department and of each agency. We maintain our 
commitment to investing in long-term economic success through worker 
training; protecting the wages, health and safety of our workers; 
protecting the security of pension, health and other employee benefits; 
and supporting our veterans. Nonetheless, with such dramatic, across-
the-board cuts as would be required by a sequestration order if 
Congress does not act, we will not be able to provide the same level of 
service to the American people. As a great deal of the Department's 
funding goes directly to the State and local areas to cover program and 
administrative costs, we also expect the quality and level of State and 
locally delivered services to erode and anticipate the State and local 
areas to experience staffing reductions across the country.
Training and Employment Programs
    The Employment and Training Administration (ETA) plays a critical 
role in the Nation's economic recovery. The Workforce Investment Act 
(WIA) formula funds and Wagner-Peyser Employment Service formula funds 
provide grants to States to provide an array of employment and training 
services at the State and local levels, which are delivered through the 
American Job Centers (AJC). The millions of dollars in reductions to 
these funds will lead to several hundred thousand fewer participants 
served. These funds help dislocated workers, low-skilled adult workers, 
and disadvantaged youth find jobs. Though we cannot predict the 
immediate impact of the proposed reductions on the 2,767 American Job 
Centers, it is clear that cuts will reduce the number of access sites 
for workers in need of assistance. As States will be pushed to reduce 
administrative costs rather than program costs, staffing at State and 
local levels will be reduced, though precise figures cannot be known 
until we begin modifying State grant agreements to accommodate the 
funding reductions. Although ETA will protect National Emergency Grant 
(NEG) funding to respond to natural disasters, regular NEG funding will 
be adversely impacted, further eroding services available for 
dislocated workers. In the formula programs under WIA, coupled with the 
Employment Service, we estimate that more than 1 million fewer 
participants will receive services needed to find or prepare for a new 
job. In its competitive grant programs for underserved and vulnerable 
populations, ETA will have to reduce either the number of competitive 
grants or the amount of money provided in formula grants, which will 
have a deleterious effect on populations served by both the grants and 
the WIA system by allowing fewer participants into these important 
programs.
    The Office of Job Corps (OJC) provides thousands of low-income 
youth with academic and vocational training that will help them secure 
a job, pursue more education or training, or join the military. The 
serious funding issues that Job Corps is already experiencing in the 
current year would be exacerbated under sequestration. Under 
sequestration, OJC will have to either permanently close more than the 
few low-performing centers it had planned to close in program year 2013 
or close all centers for a significant portion of program year 2013 to 
meet the reduced funding level. In addition, construction on all new 
centers will cease.
    Economists and the Congressional Budget Office predict that there 
will be an increase in unemployment if sequestration occurs. 
Sequestration will also reduce States' ability to assist newly 
unemployed workers in their search for employment and could impact the 
integrity of the Unemployment Insurance (UI) program. Inadequate 
funding for State administration of UI programs could lead to State 
layoffs, an increased number of improper payments, backlogs of appeals, 
and slower processing of claims. In addition, the automatic cuts to the 
Employment Service Grants to States will reduce the number of workers 
served at the AJCs through WIA and Wagner-Peyser funds by more than 1 
million.
    For the long-term unemployed, more than 3.8 million people 
receiving Emergency Unemployment Compensation benefits will see their 
benefits reduced by as much as 9.4 percent. Affected long-term 
unemployed individuals would lose an average of more than $400 in 
benefits that they and their families count on while they search for 
another job. Smaller unemployment checks will also have a negative 
impact on the economy as a whole. Economists have estimated that every 
dollar in unemployment benefits generates $2 in economic activity. 
Reemployment and Eligibility Assessments (REAs) would also be reduced, 
further hampering support for individuals searching for new employment. 
REAs save money by helping beneficiaries exit the Unemployment 
Insurance program more quickly.
    The Veterans Employment and Training Services is the agency charged 
with fulfilling the President's promise that the men and women who 
fight for us on the front lines should not have to fight for a job when 
they return home. Yet under sequestration, the Transition Assistance 
Program which serves over 150,000 veterans a year may have to reduce 
operations--leaving thousands of transitioning veterans unserved. The 
Jobs for Veterans State Grants Program will also experience cuts, 
translating to a reduction in the capacity to serve by tens of 
thousands fewer veterans in their efforts to find civilian employment. 
The National Veterans' Training Institute and Homeless Veterans 
Reintegration Program would also be reduced, further eroding the 
tailored services the Department can provide to veterans.
Worker Protection Programs
    The impacts of sequestration will also be felt in other ways 
affecting our Nation's workforce. The Department's agencies that 
promote workplace safety will experience furloughs in order to absorb 
the funding reductions under sequestration. The Occupational Safety and 
Health Administration (OSHA) will protect its highest priority 
activities but still roughly 1,200 fewer programmed inspections of the 
most dangerous workplaces will occur. This reduction could lead to an 
increase in worker fatalities and injuries. States, which enforce the 
law in over half of the States, will also have to furlough inspectors, 
and an even larger reduction in the number of inspections in State Plan 
States is expected.
    The Mine Safety and Health Administration (MSHA) will adjust 
funding to complete 100 percent of its mandatory coal inspections, but 
it will likely not be able to do the same for the mandatory metal 
nonmetal mine inspections. In addition, many of the most effective 
activities that have caught grave workplace conditions--impact 
inspections, technical investigations, respirable coal mine dust 
inspections, and accident prevention investigations--will be 
significantly reduced, potentially leading to an increase in the 
fatality and injury rate among miners. The Department remains committed 
to implementing the recommendations from the Internal Review of MSHA's 
actions at the Upper Big Branch mine, but progress on this will have to 
be delayed. Both MSHA and the Office of the Solicitor (SOL) will have 
to scale back work on the Federal Mine Safety and Health Review 
Commission backlog project, which will likely increase the backlog of 
current contested cases.
    The sequestration order will clearly have a negative impact on the 
Wage and Hour Division's (WHD) efforts to protect the most vulnerable 
workers in the workplace. WHD will see a reduction in the number of 
investigations its investigators will be able to complete. Without the 
ability to maintain full staffing levels in the face of higher 
attrition rates it is not possible to prevent WHD's overall production 
and output results from declining. Under a sequestration order, WHD can 
expect a contraction in the number of compliance actions, primarily in 
the complaint-based program due to a continued reduction in 
investigative staff. The agency's complaint response times will 
increase, and backlogs will build. These consequences directly affect 
the agency's customer service goals and certainly impact the welfare of 
those individuals who have requested the agency's services and who, 
absent the sequestration, would likely be served.
    In other worker protection agencies, the Employee Benefits Security 
Administration is facing millions in reductions, and will complete many 
fewer civil and criminal investigations as well as see a significant 
reduction in monetary results for workers. The Office of Labor 
Management Standards will be forced to reduce the number of Compliance 
Audit Program cases and criminal cases and increase the election case 
resolution time. In the Office of Workers' Compensation Programs 
(OWCP), injured employees and their families who rely on the benefits 
provided by the Federal Employees' Compensation Act and other workers' 
compensation programs would have to wait additional time for their 
claims to be processed.
Other Agencies
    The Bureau of Labor Statistics (BLS) is the principal Federal 
agency responsible for measuring labor market activity, working 
conditions, and price changes in the economy and its work informs and 
supports public and private decisionmaking. With millions in 
reductions, BLS would have to eliminate or reduce some of its programs.
    Additionally, the Bureau of International Labor Affairs will have 
to reduce its grants for child labor and trade-related workers' rights 
projects. The Office of Disability Employment Policy (ODEP) will be 
forced to reduce research, policy and effective practice development 
and technical assistance initiatives that promote the integration of 
workers with disabilities into the workforce. The Office of Inspector 
General will have to cut audits and investigations that limit fraud, 
waste, and abuse in Department of Labor programs.
    While the issues above illustrate the main impact of sequestration 
on the major Department of Labor programs, they do not reflect the 
impact on the support agencies or the impact on employee morale. These 
issues will also negatively impact the effectiveness of the 
Department's service to citizens and stakeholders.
                                 ______
                                 
                          Department of State
    Thank you for your letter regarding the impact of sequestration on 
the Department of State and the U.S. Agency for International 
Development (USAID). We share your deep concern that sequestration 
would disrupt delivery of essential services to the American people, 
including critical national security programs.
    Sequestration would force the Department and USAID to make across-
the-board reductions of $2.6 billion to fiscal year 2013 funding levels 
under the continuing resolution. Cuts of this magnitude would seriously 
impair our ability to execute our vital missions of national security, 
diplomacy, and development. Our ability to influence and shape world 
events, protect U.S. interests, increase job-creating opportunities for 
American businesses, prevent conflict, protect our citizens overseas, 
and defeat terrorism before it reaches our shores depends on day-to-day 
diplomatic engagement and increased prosperity worldwide. These cuts 
would severely impair our efforts to enhance the security of U.S. 
Government facilities overseas and ensure the safety of the thousands 
of U.S. diplomats serving the American people abroad.
    Sequestration would force us to cut approximately $200 million from 
our humanitarian assistance accounts at a time when we face growing 
needs in Syria, the Horn of Africa, and the Sahel. Such a reduction 
would hinder our ability to provide life saving food assistance to 2 
million people and USAID would have to cease, reduce, or not initiate 
assistance to millions of disaster-affected people. Similarly, 
sequestration would cut global health funding by over $400 million, 
gravely impeding our efforts to create an AIDS-free generation and to 
end preventable child deaths. Such cuts undermine our efforts to shape 
the broader international efforts to fight disease and hunger, invest 
in global health, and foster more stable societies and regions.
    Under sequestration, our security assistance accounts would face an 
approximately $500 million reduction, undermining our efforts around 
the world to prevent conflict and protect our national security. An 
over $300 million cut to our Foreign Military Financing account could 
lead to reductions in military assistance to Israel, Jordan, and Egypt, 
undermining our commitment to their security at such a volatile time. 
This cut will be felt at home, resulting in a loss of sales to U.S. 
industry and a potential loss of U.S. jobs. Furthermore, the Department 
would have to cut contributions to international peacekeeping 
operations, efforts to counter terrorism and prevent loose and 
dangerous weapons from falling into the wrong hands, and support for 
law enforcement and counternarcotics efforts, including efforts to 
dismantle drug trafficking networks in Mexico, Central America, and the 
Caribbean.
    In addition, this proposed across-the-board cut to the State 
Department budget would limit our ability to provide ongoing and 
emergency assistance to U.S. citizens abroad and curtail our efforts to 
facilitate foreign travel to the United States. Cuts at the 
contemplated level would constrain our ability to assist U.S. citizens 
overseas, often at their darkest times. Reductions in funding would 
jeopardize the Department's efforts to provide secure, error-free 
travel documents to those eligible to receive them, while denying them 
to those not eligible. Reduced funding would also undermine progress 
made in ensuring that visa requests are processed in a timely fashion. 
Visa processing times directly impact job creation in the United 
States. The Department of Commerce estimates that one job is created in 
America's travel and tourism industry for every 65 visas issued.
    Sequestration would also force dramatic cuts to the platform which 
supports the State Department, USAID, and other U.S. Government 
agencies operating abroad, including efforts to enhance the security of 
U.S. Government facilities, the platform for safe and secure diplomatic 
operations, both domestically and overseas. It would also force 
reductions in USAID's operating budget of nearly $70 million, reversing 
the progress made to better equip the agency to achieve the 
administration's objectives in an accountable, transparent manner.
    The enclosed document describes in more detail the impact 
sequestration would have on the Department's and USAID's operating 
budgets and foreign assistance programs. This list is illustrative, but 
far from exhaustive. I hope that Congress can act to avoid these 
severe, across-the-board cuts to programs that further U.S. national 
security, advance America's economic interests, protect Americans at 
home and abroad, and deliver real results for the American people.
impact of sequestration on department of state and the u.s. agency for 
                       international development
    Sequestration would cut State Operations by roughly $850 million 
and Foreign Assistance by approximately $1.7 billion. Cuts of this 
magnitude would severely impair our ability to ensure America's 
leadership in global affairs, build relationships with host 
governments, and promote peaceful democracies. They would limit our 
ability to advance peace, security, and stability around the world, and 
to prevent wars, contain conflicts, reduce the threat of nuclear 
weapons, expand global markets, counter extremism, secure our borders, 
and protect Americans abroad,
    This across-the-board cut to the State Department budget would 
limit our ability to provide ongoing and emergency assistance to U.S. 
citizens abroad and curtail our efforts to facilitate foreign travel to 
the United States. Cuts would:
  --Constrain our ability to assist U.S. citizens overseas, often at 
        their darkest times;
  --Jeopardize efforts to provide secure, error-free travel documents 
        to those eligible to receive them, while denying them to those 
        not eligible; and
  --Undermine progress made to ensure that visa requests are processed 
        in a timely fashion. Visa processing times directly impact job 
        creation in the United States; the Department of Commerce 
        estimates that one job is created in America's travel and 
        tourism industry for every 65 visas issued.
    Sequestration would reduce our ability to help U.S. companies 
compete for foreign government and private contracts; navigate foreign 
regulations and settle disputes; and negotiate international agreements 
and treaties to open new markets for American goods and services. Our 
day-to-day work of opening overseas markets, promoting U.S. exports, 
and helping poor countries grow into more developed economies would 
suffer, reducing long-term prospects for U.S. prosperity and job 
creation. Specifically, cuts of this magnitude would:
  --Compromise our ability to help U.S. companies capture opportunities 
        abroad in growing markets such as India, Brazil, and Mexico, 
        with trade agreements, investment treaties, direct advocacy, 
        and other diplomatic tools that open markets and ensure a level 
        playing field;
  --Reduce economic and development assistance accounts by more than 
        $400 million, setting back efforts to open markets overseas and 
        create U.S. exports and jobs, while also lifting families from 
        hunger and poverty;
  --Cut Foreign Military Financing (FMF), potentially resulting in a 
        loss of sales to U.S. companies and a loss of jobs across the 
        United States. FMF dollars purchase U.S. goods and services and 
        create skilled jobs across the United States, strengthening our 
        industrial base, and often lowering the cost for the same 
        military articles and services to our own armed forces; and
  --Reduce export promotion programs that help U.S. businesses 
        identify, pursue, and capture opportunities abroad and create 
        jobs at home.
    Cuts would eliminate resources needed to fight disease and hunger, 
invest in global health, provide humanitarian assistance, and reduce 
the threats of climate change, undermining efforts to foster more 
stable societies and regions. We would be forced to make the following 
cuts:
  --More than $200 million from our humanitarian accounts, hampering 
        our ability to respond to humanitarian disasters at a time when 
        the world faces growing needs in Syria and its neighboring 
        countries, and ongoing crises in the Horn of Africa and the 
        Sahel;
  --Roughly $70 million from title II food aid, impairing our ability 
        to provide lifesaving assistance to nearly 2 million people 
        overseas; and
  --More than $400 million from our Global Health Program, including 
        $280 million from the President's Emergency Plan for AIDS 
        Relief, hindering our ability to achieve global health 
        objectives such as creating an AIDS-free generation, ending 
        preventable mother and child deaths, and fulfilling our 
        commitment to the Global Alliance for Vaccines and 
        Immunizations and to the Global Fund.
    In addition, we would be forced to:
  --Scale back efforts to end preventable child deaths, eliminate polio 
        globally, continue progress toward controlling malaria in 
        Africa, and mitigate highly virulent viruses such as H5N1 from 
        developing into a pandemic and directly threatening U.S. 
        citizens;
  --Make significant reductions to Feed the Future, the President's 
        global hunger and food security initiative, which helps 
        countries improve food security, generate opportunities for 
        economic growth and trade, reduce poverty, and ultimately 
        decrease their reliance on international assistance, including 
        emergency food aid, by cultivating sustainable agricultural 
        sectors; and
  --Relinquish leadership on climate change, reducing our efforts to 
        help countries invest in a clean environment and transition to 
        a low-carbon future, and constraining the market for U.S. 
        ``green'' firms.
    Cuts would limit the ability of the State Department and USAID to 
bring nations together and forge partnerships to address these and 
other global problems. Every day, we support the spread of open and 
accountable democracy around the world to advance freedom, dignity, and 
development. Sequestration would:
  --Compromise our ability to shape strategy in international fora (G-
        8, G-20, the United Nations, and the Organization for Economic 
        Cooperation and Development) and to use these organizations to 
        obtain worldwide cooperation on global challenges, such as 
        safeguarding against nuclear threats, strengthening economic 
        cooperation, and supporting development;
  --Impede progress in Afghanistan by obstructing United States and 
        international efforts in Afghanistan to sustain the economic 
        and development gains made at great sacrifice over the past 10 
        years;
  --Jeopardize our allies in the Middle East. Sequestration would force 
        cuts to economic assistance to Jordan and Egypt, a particular 
        risk given the vital role of these partners in managing the 
        unfolding transitions in the Middle East; and
  --Undercut our advances in creating a positive view of America and 
        the American people by reducing our participation in 
        international education and cultural programs that give foreign 
        participants a real understanding of our country and its 
        values.
    Sequestration also would undermine our work with more than 150 
nations and international organizations around the world to protect our 
national security with a roughly $500 million cut to international 
security assistance. Sequestration would:
  --Cut Foreign Military Financing by $300 million, potentially 
        reducing our military assistance to Israel, Jordan, and Egypt, 
        and undermining our commitment to their security at an 
        especially volatile time;
  --Reduce contributions to international peacekeeping operations by 
        almost $20 million, hindering our efforts to stabilize the 
        conflict in Mali and prevent the spread of extremism in the 
        Sahel; and
  --Jeopardize our efforts to counter terrorism by cutting roughly $35 
        million for our efforts to counter terror, prevent loose and 
        dangerous weapons from falling into the wrong hands, and 
        supervise the safe destruction of conventional weapons.
    Sequestration would force dramatic cuts to the platform which 
supports the State Department, USAID, and other U.S. Government 
agencies operating abroad, and would:
  --Erode efforts to enhance the security of U.S. Government 
        facilities, the platform for safe and secure diplomatic 
        operations, both domestically and overseas; and
  --Reduce USAID's operating budget by nearly $70 million, reversing 
        the progress made to better equip the agency to achieve the 
        administration's objectives in an accountable, transparent 
        manner.
                                 ______
                                 
                      Department of Transportation
    This letter responds to your letter of January 18 requesting 
information on the impact that across-the-board spending cuts would 
have on the U.S. Department of Transportation's discretionary programs 
in the event of sequestration. Thank you for giving me the opportunity 
to share my views.
    Sequestration will require indiscriminate spending reductions to be 
taken equally among the affected accounts, programs, projects, and 
activities within each account, severely restricting our ability to 
manage such large funding reductions. This will have serious impacts on 
transportation services that are critical to the traveling public. I am 
very concerned about this possibility and agree with you that the 
American people should be fully informed of the consequences that will 
occur unless sequestration is averted.
    If a sequestration order is issued on March 1, 2013, the Department 
of Transportation will be cut by nearly $1 billion, affecting dozens of 
our programs. Some of our Operating Administrations will need to 
restrict staffing and prioritize safety activities, which means 
delivery of our many grant programs may face unneeded delays. The 
Federal Transit Administration, the Pipelines and Hazardous Materials 
Administration, and the Maritime Administration are among those that 
will be affected.
    But perhaps the most serious result of this action would be the 
immediate impacts on the Federal Aviation Administration (FAA). 
Sequestration would require the FAA to undergo a funding cut of more 
than $600 million. This action would force the FAA to undergo an 
immediate retrenchment of core functions by reducing operating costs, 
and eliminating or reducing services to various segments of the flying 
community.
    Given the magnitude of this reduction, it will be impossible to 
avoid significant employee furloughs and reductions in contracted 
services. On average, this means a vast majority of the FAA's nearly 
47,000 employees will be furloughed for approximately 1 day per pay 
period until the end of the fiscal year in September, with a maximum of 
2 days per pay period. This number could be lower for any individual 
employee depending on specific staffing needs, operational 
requirements, and negotiated collective bargaining agreements. Any 
furloughs would only occur after appropriate employee notification and 
in accordance with applicable collective bargaining agreements. The 
furlough of a large number of air traffic controllers and technicians 
will require a reduction in air traffic to a level that can be safely 
managed by the remaining staff. The result will be felt across the 
country, as the volume of travel must be decreased. Sequestration could 
slow air traffic levels in major cities, which will result in delays 
and disruptions across the country during the critical summer travel 
season.
    Aviation safety employees also would experience significant 
furloughs that will affect airlines, aviation manufacturers, and 
individual pilots, all of which need FAA safety approvals and 
certifications. While the Agency will continue to address identified 
safety risks, a slowed certification and approval process due to 
furloughs could negatively affect all segments of the aviation industry 
including those who travel by air.
    NextGen investments may be completed, but investments in advanced 
technologies and new tools will need to be postponed indefinitely. As a 
result, the delivery of some critical NextGen systems could be delayed 
for years to come.
    All of this means a less efficient and less convenient air travel 
service for the American traveling public, as well as impacts to our 
economy. Civil aviation contributes 10 million jobs and $1.3 trillion 
annually to the U.S. economy and sequestration places this contribution 
in jeopardy.
    I want to assure you, however, that our highest priority is to keep 
the aviation system safe even if it means disruptions and delays in 
service.
    It is also important to note that some of our transportation 
programs will not be impacted. Under the Budget Control Act of 2011, 
our Trust-funded highway programs, motor carrier safety programs, 
vehicle safety programs, transit formula and bus grants, and airport 
grants programs are exempt from sequestration. These transportation 
programs would continue to operate at current funding levels.
    We also need to consider the longer term consequences of 
sequestration on the delivery of Federal programs into fiscal year 2014 
and beyond. Should sequestration occur, we will need to make difficult 
choices about which services to continue, which services to drastically 
reduce, and which services to completely eliminate over the coming 
years. Our programs cannot be sustained indefinitely by one-time fixes 
and furloughs. Our choices should ensure these programs are positioned 
to continue in the future and provide the American people with services 
they can rely on, by passing balanced deficit reduction and avoiding 
sequestration.
    Thank you again for the opportunity to share my views on this 
important matter.
                                 ______
                                 
                       Department of the Treasury
    Thank you for your January 18, 2013 letters sent to Secretary 
Geithner and Acting Commissioner Steven Miller regarding the possible 
impact of the sequester on the Department of the Treasury.
    As the administration has stated many times, sequestration would 
require indiscriminate across-the-board cuts and was never intended to 
be implemented. The administration has proposed solutions to avoid the 
across-the-board spending cuts through balanced deficit reduction. The 
Department of the Treasury, along with the rest of the administration, 
hopes Congress will act to avoid sequestration.
    If the sequester does take effect, the cuts would harm taxpayers 
and employees across the Government. In concrete terms, the effects of 
sequestration would be felt in two ways: through a diminished capacity 
to carry out Treasury's mission, primarily due to employee furloughs, 
and through reductions in payments, tax credits, and financial 
assistance programs that support small businesses and State and local 
governments.
    Under sequestration, most Treasury employees would face furloughs, 
which would have a cascading effect on employees' families as well as 
on the economy at large. The effects would be particularly painful at 
the IRS, reducing the agency's ability to provide quality services to 
taxpayers. For example, the cuts to operating expenses and expected 
furloughs would prevent millions of taxpayers from getting answers from 
IRS call centers and taxpayer assistance centers and would delay IRS 
responses to taxpayer letters. The IRS would be forced to complete 
fewer tax return reviews and would experience a reduced capacity to 
detect and prevent fraud. This could result in billions of dollars in 
lost revenue and further complicate deficit reduction efforts. In 
recent years each dollar spent on the IRS has returned at least $4 in 
additional enforcement revenue. Thus, each dollar the sequester cuts 
from current IRS operations would cause a net increase to the deficit, 
as the lost and forgone revenue would exceed the spending reduction.
    Treasury's national security and enforcement functions would also 
suffer from a reduced capacity to carry out their vital mission. 
Spending cuts required by the sequester would force a reduction in 
Treasury support of counterterrorism and anti-money laundering 
investigations, which could undermine Treasury's ability to block funds 
from flowing to dangerous individuals and organizations, affecting the 
security of all Americans. Overall, while our bureaus would implement 
cuts to reduce the extent of furloughs as much as possible--including 
hiring freezes and reductions in contract support, travel, training, 
supplies, and services--these actions would not be sufficient to avoid 
furloughs entirely as we already would be 5 months into the fiscal 
year.
    In addition to providing fewer services at lower quality, 
sequestration would require reductions in a number of important 
Treasury programs that would adversely affect economic growth. 
Treasury's Community Development Financial Institutions Fund would 
award fewer or smaller grants to underserved populations and distressed 
communities, reducing financing to small businesses that are critical 
to job creation. Treasury would need to reduce payments that support 
certain State and municipal bond programs through lower levels of 
refundable tax credits and direct payments to issuers--likely 
increasing the borrowing costs to improve infrastructure, schools, 
affordable housing, and other needs for these communities. And we would 
reduce assistance for the development of renewable energy and tax 
credits that support small businesses, both of which would put American 
jobs at risk and restrain economic growth.
    We appreciate your interest in the sequester's potential effects on 
the Department of the Treasury. I would be happy to answer any 
additional questions.
                                 ______
                                 
                    Environmental Protection Agency
    I am responding to your letter dated January 22, 2013, requesting 
information about the impact that sequestration will have on the U.S. 
Environmental Protection Agency's ability to protect the Nation's 
environment and public health. As stewards of taxpayers' dollars, we 
have set priorities, made tough choices and managed our budget 
carefully. Sequestration, however, will force us to make cuts we 
believe will directly undercut our congressionally mandated mission of 
ensuring Americans have clean air, clean water and clean land. I am 
enclosing our preliminary assessment of some of the impacts of 
sequestration, should it be implemented. Our assessment highlights a 
number of immediate impacts to programs, people and services.
    Should you have any questions about the information included, 
please have your staff contact Ed Walsh of my staff at (202) 564-4594.
                   potential impacts of sequestration
                              air programs
ENERGY STAR
    ENERGY STAR is relied upon by millions of Americans and thousands 
of companies to save money and protect the environment through energy 
efficient products and practices.
  --Results are already adding up. Americans, with the help of ENERGY 
        STAR, prevented 210 million metric tons of GHG emissions in 
        2011 alone--equivalent to the annual emissions from 41 million 
        vehicles--and reduced their utility bills by $23 billion.
    Under sequestration, there would be three specific impacts that 
could jeopardize, delay or impair further progress: (1) EPA's ability 
to keep ENERGY STAR product specifications up to date across more than 
65 categories would slow down, including electronics, appliances and 
home heating and cooling systems; (2) EPA would have to reduce the 
number of energy-intensive industrial sectors it works with to develop 
energy performance indicators and Energy Efficiency Guides; and (3) EPA 
would reduce support for our Portfolio Manager, both the planned 
upgrade and our ability to support its users, including the 
approximately 10 major cities and States as well as the Federal 
Government, which use the tool in emissions and energy disclosure and 
benchmarking policies.
Vehicle Certification
    Before new vehicles can be sold in the United States, EPA must 
first certify that they are in compliance with emissions standards.
    Sequestration would harm EPA's ability to confirm in a timely 
manner that manufacturers are complying with all vehicle emission 
standards and creates the risk that some manufacturers would be delayed 
in their ability to certify their products. Without this certification, 
they would be unable to sell these products in the United States, thus 
depriving car-buyers access to the latest vehicles and potentially 
harming vehicle sales and the economy.
State Air Monitors
    Air quality monitoring is vital to the protection of public health 
from harmful air pollution.
    Sequestration would reduce the funding EPA provides States to 
monitor air quality, likely forcing the shutdown of some critical air 
monitoring sites. Lost monitoring for high priority pollutants such as 
ozone and fine particles would impact the collection of data necessary 
for determining whether areas of the country meet, or do not meet, the 
Clean Air Act's health-based standards.
    Sequestration would force the Agency to eliminate or significantly 
reduce essential air quality data systems like AIRNow, a popular air 
quality reporting and forecasting system. Americans that have or care 
for individuals with respiratory and cardiac health issues rely on 
AIRNow for information about when to take action to avoid health 
impacts from air pollution. The Agency would eliminate upgrades for the 
Emission Inventory and Air Quality Systems--the Agency would only fund 
operations for these systems. These systems store and process air 
quality monitoring and emissions data from across the Nation that 
informs EPA, State, tribal, and local air agencies' decisions on steps 
needed to improve air quality. Without this monitoring data, future 
improvements in air quality would be hampered or delayed.
                  enforcement and compliance programs
Civil and Criminal Enforcement
    Americans expect their Government to protect them from violations 
of the Nation's environmental laws that could harm their families and 
impact the safety and prosperity of their communities. Sequestration's 
reduction to EPA's enforcement budget would:
  --Reduce EPA's ability to monitor compliance with environmental 
        laws--as fewer environmental cops are on the ``beat'' to 
        enforce environmental laws (note implementation of the 
        sequester could result in 1,000 fewer inspections in fiscal 
        year 2013).
  --Limit EPA's capacity to identify toxic air emissions, water 
        discharges, and other sources of pollution that directly affect 
        public health and the environment.
National Environmental Policy Act
    EPA's comments on environmental reviews are required by law and 
help to ensure that Federal agencies understand the potential 
environmental impacts and have considered alternatives to proposed 
projects on Federal lands. Sequestration would reduce support for 
environmental reviews and could slow the approval of transportation and 
energy related projects.
Superfund Enforcement
    Superfund enforcement ensures that responsible parties pay for 
necessary and often costly cleanups at the Nation's most polluted 
sites. Sequestration would cut work to press responsible parties to 
clean up contaminated sites in communities and restore clean up funds 
for use at other sites--putting the costs back on the American public. 
(Note: estimated $100 million loss in clean-up commitments and cost 
reimbursements to the Government).
                            tribal programs
    EPA tribal funding supports environmental protection for 566 tribes 
on 70 million acres of tribal lands. This funding includes the most 
significant grant resources to help tribal governments build the core 
capacity necessary to protect public health and the environment. Funds 
are used to support staffing of environmental directors and technicians 
to implement environmental projects, including safe drinking water 
programs and development of solid waste management plans. Reduced funds 
under sequestration would directly impact some of the country's most 
economically disadvantaged communities, resulting in loss of 
employment, and hindering tribal governments' ability to ensure clean 
air and clean and safe water.
                   research and development programs
Air, Climate and Energy
    Under sequestration, cuts to EPA climate research would limit the 
ability of local, State and the Federal Government to help communities 
adapt to and prepare for certain effects of climate change, such as 
severe weather events. Without information provided by climate 
research, local governments would not know how climate change would 
affect water quality, and therefore would be unable to develop 
adaptation strategies to maintain protection of water quality as the 
climate changes.
    Implementation of the sequester would eliminate research to 
increase our understanding of exposures and health effects of air 
pollutants on susceptible and vulnerable populations, such as 
asthmatics, the growing aging population, and individuals living near 
air pollution sources which would impact the development of national 
air quality standards as required by the Clean Air Act.
Chemical Safety for Sustainability
    Under sequestration, the reduction in funding would impede EPA's 
ability to assess and understand the effect of nanomaterials on human 
health and dispose of rare Earth materials used in electronics, thereby 
limiting innovation and manufacturing opportunities with these 
materials in the United States. The reduction in funding for endocrine 
disrupting chemicals research would limit our Nation's ability to 
determine where and how susceptible people are exposed to endocrine 
disrupting chemicals, and to understand how these toxic exposures 
impact their health and welfare. Limiting the use of advanced chemical 
evaluation approaches recommended by the National Academy of Sciences 
would impair the ability of business, States and EPA to make decisions 
on both the safety of existing industrial chemicals, as well as on the 
development and use of safer chemicals.
Sustainable & Healthy Communities
    Under sequestration EPA would reduce the number of undergraduate 
and graduate fellowships (STAR and GRO) by approximately 45, thus 
eliminating any new fellowships. The Fellowship program, one of the 
most successful fellowship programs in Government, is educating the 
next generation of environmental scientists, which is critical to a 
strong and competitive economy.
    Reductions under sequestration would discontinue funding for two 
joint EPA/National Institutes of Health Centers of Excellence for 
Children's Health Research. These centers are providing a greater 
understanding of how the environment impacts today's most pressing 
children's health challenges, including asthma, autism, attention 
deficit hyperactivity disorder (ADHD), neurodevelopmental deficits, 
childhood leukemia, diabetes, and obesity. Eliminating funding would 
negatively impact graduate students and faculty who would have to look 
for new funding to keep their research going and ultimately slow down 
the pace of scientific research in these important areas. Research in 
these areas translates to improved public health.
    EPA research and grants to academic institutions for studies to 
understand human health disparities at the community level would both 
be severely curtailed by reductions under sequestration. This would be 
especially significant to disproportionately affected communities 
across the United States. Important research would be stopped mid-
stream and graduate students would be without expected funding. This 
would delay scientific research in these fields, which are important to 
advancing public health.
Safe and Sustainable Water Resources
    Under sequestration reductions to green infrastructure (GI) 
research would slow the Agency's ability to provide GI best-management 
practices to municipalities dealing with costly stormwater enforcement 
actions. Other benefits of GI, such as wildlife habitat, flood and 
erosion control, recreational opportunities, jobs and increased 
property values, would also be lost.
    Sequestration would cut research to find cleaner and cheaper 
solutions to help States and cities address the Nation's crumbling 
water infrastructure that is contaminating clean drinking water and 
causing substantial loss of valuable quantities of water.
Human Health Risk Assessment
    Reductions under sequestration would result in the significant 
delay of crucial Integrated Risk Information System (IRIS) human health 
related assessments (e.g. arsenic, styrene, ethylbenzene, naphthalene 
and manganese) that would limit the ability of EPA and States to make 
decisions to protect people's health.
    Sequestration reductions delaying the delivery of four major 
Integrated Science Assessments would limit the ability of EPA to make 
decisions that would protect people from certain air pollutants.
Homeland Security Research
    Sequestration would stall development of approaches to manage waste 
from radiological contaminants following a terrorist attack or a 
nuclear accident. Opportunities to learn lessons from the Japanese 
Fukushima Disaster would be lost.
    Under sequestration, reductions in practical research on 
preparedness following disasters would inhibit the development of 
techniques and procedures for communities to prepare for and recover 
from natural disasters and industrial accidents (e.g., Deepwater 
Horizon, Superstorm Sandy). This would lead to longer recovery times 
and higher costs at the local, State, and national levels.
                             water programs
State Revolving Fund Program (SRFs)
    Under sequestration, cuts to clean water and drinking water SRFs 
would deprive communities from access to funding to build or repair 
decaying water and wastewater infrastructure that provides safe 
drinking water and removes and treats sewage.
Water Program State Implementation Grants
    Reductions under sequestration would impact States' ability to meet 
drinking water public health standards and to reduce the nitrogen and 
phosphorus pollution that contaminate drinking water supplies, cause 
toxic algae blooms, and deprive waters of oxygen that fish need to 
survive. This reduction would result in the elimination of more than 
100 water quality protection and restoration projects throughout the 
United States. Examples of specific projects that would be impacted 
include but are not limited to:
  --Assisting small and/or disadvantaged public drinking water systems 
        that need assistance to improve the safety of the drinking 
        water delivered to communities.
  --Protecting children from harmful exposure to lead in drinking water 
        by revising the Lead and Copper Rule.
  --Protecting public health from cancer-causing Volatile Organic 
        Compounds in drinking water.
EPA's Water Program Implementation
    Reductions under sequestration would limit assistance provided to 
States and tribes to ensure safe and clean water, including protecting 
children from exposure to lead in drinking water; protecting rivers and 
streams from industrial and municipal pollution discharges; identifying 
and developing cleanup plans for polluted waterways; and developing 
science to support human health and aquatic life.
Superstorm Sandy Appropriation
    Sequestration would reduce funding available to enhance resiliency 
and reduce flood damage risk and vulnerability at treatment works in 
communities impacted by Superstorm Sandy.
                      community protection reduced
    The Agency's cleanup programs protect communities from the risks 
posed by hazardous waste sites and releases and returns formally 
contaminated properties to beneficial use.
  --The Superfund Remedial program would be unable to fund an estimated 
        3-5 new construction projects to protect the American public at 
        Superfund National Priority List sites due to constrained 
        funding from the sequestration.
  --Under sequestration, the Agency may have to stop work at one or 
        more ongoing Superfund Remedial construction projects. Stopping 
        any ongoing work would increase costs in the long run (due to 
        contract termination penalties and the need to demobilize and 
        re-mobilize construction contractors).
  --The sequestration would reduce funding available for other parts of 
        the Superfund Remedial program as well. Critical steps leading 
        up to construction would be curtailed.
  --Cuts to the Brownfield Program's budget under sequestration would 
        limit the Agency's ability to provide cleanup, job training, 
        and technical assistance to Brownfield communities. The Program 
        leverages nearly $17 of private and public sector funding for 
        every dollar expended by the Brownfields Program to clean up 
        sites and help revitalize communities and support economic 
        development.
  --Under sequestration, funding cuts would reduce Risk Management Plan 
        (RMP) Program inspections and prevention activities. Both high-
        risk and non high-risk RMP facility inspections would be 
        reduced by approximately 26 inspections per year, from 500 to 
        474. Of the reduced inspections, approximately 8 would be from 
        high risk facilities and the RMP inspector training program 
        would be reduced.
  --Cuts to the Oil Spill program under sequestration would reduce 
        protection of U.S. waters from oil spills by reducing 
        inspection and prevention activities. The largest program 
        impact of an oil budget reduction would be on inspections at 
        regulated facilities. EPA currently conducts approximately 840 
        inspections per year at SPCC-regulated facilities (which 
        represents 0.13 percent of the total universe of 640,000) and 
        290 FRP inspections/unannounced exercises (about 6.5 percent of 
        the universe of 4,400). EPA would reduce approximately 37 FRP 
        inspections in fiscal year 2013 and limit the development of a 
        third party audit program for SPCC facilities, which may lead 
        to a decrease in compliance with environmental and health 
        regulations.
                epa state cleanup and waste program cuts
    Under sequestration State cleanup program funding would be cut, 
reducing site assessments.
    Cuts in Leaking Underground Storage Tank State grants under 
sequestration would result in nearly 290 fewer cleanups completed at 
contaminated sites, limiting further reductions to the backlog of sites 
awaiting cleanup. It would reduce the number of sites and acres ready 
for reuse or continued use, and therefore, fewer communities would 
receive the redevelopment benefit of cleaning up LUST sites.
    Under sequestration, cuts in State grants would result in 
approximately 2,600 fewer inspections, and would limit the States' 
ability to meet the statutory mandatory 3-year inspection requirement. 
Decreased frequency of inspections may lead to a decline in compliance 
rates and could result in more UST releases.
    Since 75 percent of State clean up grants and 80 percent of State 
prevention grants support State staff, these cuts under sequestration 
could lead to the loss of State jobs.
    Under sequestration, cuts to the Brownfield Program would reduce 
funds to States and tribes for the development of voluntary response 
programs.
    A cut of $2.5 million to CERCLA 128(a) State and tribal response 
program Brownfields categorical grants program under sequestration 
would reduce the ability to fund new grantees (7 tribal grantees) 
without further reducing the allocations of existing grantees, and 
would decrease the number of properties that could be overseen by 
Voluntary Cleanup Programs by nearly 600.
    Cuts under sequestration would delay work on a 3-year project to 
develop a fee-based system for managing hazardous waste transport (e-
Manifest) that would produce the estimated $77 million to $126 million 
in annual projected savings to industry and the States.
    Sequestration cuts would reduce funding for maintenance to the only 
national system for tracking State and Federal RCRA permitting and 
corrective action. RCRA Info is vital to the U.S. economy since it 
enables States to prioritize and implement their hazardous waste 
programs by tracking facility activities regarding the handling 
hazardous waste (generators, or treatment, storage, or disposal 
facilities).
                                 ______
                                 
                    Federal Bureau of Investigation
    I am writing in response to your letter dated January 18, 2013, 
requesting the impact of sequestration on the Federal Bureau of 
Investigation's (FBI) operations, employees, contractors, and State and 
local economies where the FBI operates. In short and in sum, 
sequestration will require immediate and significant reductions to the 
FBI and to its operations. Because sequestration calls for across-the-
board cuts, the FBI would be required to do less in all its programs, 
including against Al Qaeda and its affiliated groups, as well as the 
growing and sophisticated threats from cyber attacks, foreign 
intelligence, and national and transnational criminal activities.
    First, sequestration would have the net effect of cutting 2,285 
employees--including 775 agents through furloughs and a hiring freeze. 
Every FBI employee would be furloughed for 14 workdays, nearly 3 full 
weeks. By the end of the fiscal year, this translates to approximately 
7,000 FBI employees not working each day. (For individual FBI 
employees, this would mean a 12 percent cut in pay over the 5-month 
period from May to September.) The hiring freeze would result in 2,275 
vacant positions at the end of the year, including 350 Special Agents, 
275 Intelligence Analysts, and 1,650 professional support staff, 
including forensic and computer scientists, electronic engineers and 
technicians, contracting officers, police officers, and victim 
specialists. The hiring freeze would also have lasting effects beyond 
the immediate loss of new employees because, for instance, extensive 
background checks and Top Secret security clearance requirements would 
keep the FBI from immediately hiring new personnel at the conclusion of 
the freeze. To put these numbers in perspective, the loss of work years 
from the furloughs and hiring freeze required by sequestration is the 
equivalent of shutting down three of the FBI's largest Field Offices--
Chicago, Miami, and Baltimore.
    Second, sequestration would require us to eliminate and/or reduce 
joint task forces and other partnerships with other Federal, State, and 
local law enforcement. Federal, State, and local law enforcement have 
long relied on Federal task forces as a means to share information and 
as force multipliers in the fight against terrorism and violent crime. 
Joint task forces would be required to do less.
    Third, sequestration would reduce the FBI's delivery of criminal 
justice services, including forensic and computer support that is often 
critical to cases involving child pornography and related trafficking 
in women and children. Critical civil services including the timely 
completion of checks by the National Instant Criminal Background Check 
System (NICS) of persons seeking to purchase firearms--would also be 
affected. As you know, NICS is the national mechanism for licensed gun 
dealers to determine whether a person is prohibited from possessing a 
firearm (for instance, a convicted felon) at the point of purchase. 
When more than 3 days lapse after a dealer contacts NICS and NICS has 
not provided a determination to the dealer, the dealer is authorized by 
law to transfer the firearm without a final NICS determination.
    Finally, it is important to understand that under the terms of the 
continuing resolution, the FBI is already operating on funding levels 
below the amount needed to maintain current services in fiscal year 
2013. Critical investments proposed by the administration to address 
the growing cyber threat and other key initiatives remain unfulfilled. 
Sequestration adds over $550 million to the operational shortfalls that 
already exist under the continuing resolution. The combined effects of 
the continuing resolution and sequestration would undercut the 
investments made by Congress in previous years to transform and build 
the FBI's national security, intelligence, and criminal investigative 
capabilities and capacities commensurate with the threats facing the 
Nation.
    Enclosed are descriptions of specific program impacts. As outlined 
above and in the enclosure, sequestration will reduce the FBI's ability 
to keep communities safe from national security and criminal threats. 
We cannot afford to let our guard down in this way.
    If you or your staff has any other specific questions about the 
impact of sequestration, please feel free to contact the FBI's Chief 
Financial Officer, Richard L. Haley II, at (202) 324-1345.
                               attachment
                impacts of sequestration by fbi program
    Sequestration will require immediate and significant reductions to 
the FBI's operations. Foremost, sequestration would have the net effect 
of cutting 2,285 employees through furloughs and a hiring freeze. 
Accordingly, the FBI would be required to do less. The programs 
potentially affected include:
National Security
    Cyber-intrusion and other computer-crime capabilities and 
initiatives would be impacted by a lack of personnel with the 
specialized skills and knowledge needed to investigate such incidents, 
the inability to acquire advanced technology used to analyze vast 
volumes of data and information that enables investigators to identify 
and trace individuals responsible for attacks, the inability to acquire 
contractor expertise to assist investigators, and the inability to 
develop and deploy tools to assist investigators and analysts in 
detecting and defeating new cyber-based threats and attacks.
    Counterterrorism operations and investigations would be impacted by 
the loss of investigative, intelligence and other personnel needed to 
identify and assess individuals with known or suspected terrorist ties. 
Further, the FBI's ability to proactively penetrate and disrupt 
terrorist plans and groups prior to an attack would be impacted. High 
priority investigations would stall as workload is spread among a 
reduced workforce. Overseas operations would be substantially scaled 
back, including in-theater support in Afghanistan where U.S. military 
and coalition operations rely on FBI investigative and forensic 
programs.
    Translation of time-sensitive conversations intercepted in 
compliance with court orders and other materials would be delayed, 
potentially resulting in missed opportunities to identify and disrupt 
operations being carried out or planned. Backlogs of materials 
requiring translation and unprocessed raw intelligence would grow.
    State and local law enforcement participation in Joint Terrorism 
Task Forces and Field Intelligence Groups would be reduced due to 
funding constraints, resulting in less sharing of threat and 
intelligence information among agencies. Some Joint Terrorism Task 
Forces may be eliminated.
    Response times at the Terrorist Screening Center and the Foreign 
Terrorist Tracking Task Force would increase due to lack of personnel, 
potentially allowing individuals on watch lists to gain entry to the 
United States.
    Timely deployment of FBI Render Safe capabilities and resources--a 
critical component to the integrated U.S. response in the event of a 
domestic WMD incident--would be negatively impacted due to furloughs 
and inability to conduct replacement hiring of WMD specialists. 
Maintenance of operational capabilities and readiness would be affected 
by reduced funding for training and exercises.
    U.S. classified information and national defense information would 
be more vulnerable to compromise by foreign intelligence operations due 
to reduced counterintelligence staffing and operational capability. 
Proactive initiatives to create and maintain counterintelligence 
awareness would be reduced in scope.
    Deployment of sophisticated--but labor intensive--surveillance and 
digital forensic techniques will be reduced, resulting in missed 
opportunities to collect and analyze intelligence information on high 
priority national security targets. The number of unaddressed 
surveillance requests would grow and the FBI's surge capability for 24/
7 coverage would diminish.
    Reliability and availability of specialized operational technology 
systems and equipment will be more susceptible to breakdown due to lack 
of maintenance and replacement of components.
Criminal investigations
    Sequestration will cause current financial crimes investigations to 
slow as workload is spread among a reduced workforce. In some 
instances, such delays could affect the timely interviews of witnesses 
and collection of evidence. The capacity to undertake new major 
investigations will be constrained. Left unchecked, fraud and 
malfeasance in the financial, securities, and related industries could 
hurt the integrity of U.S. markets. In addition, the public will 
perceive the FBI as less capable of aggressively and actively 
investigating financial fraud and public corruption, which would 
undercut the deterrence that comes from strong enforcement.
    Sequestration will impede violent crime investigations as FBI-
funded task forces such as Innocent Images, Safe Streets, and Safe 
Trails will need to be curtailed and/or eliminated. Such Task Forces 
successfully leverage limited Federal/State/local/tribal resources. As 
a result, less information will be shared and in a less timely fashion 
among agencies, and agencies are more likely to duplicate effort as 
they work on common crime problems individually--rather than 
collaboratively. Identification and arrest of traffickers and producers 
of child pornography would be affected by a lack of resources, with the 
potential consequence of child victims being victimized for longer 
periods. Ongoing efforts and initiatives to curtail the sexual 
exploitation and trafficking of minors and women would be stymied by 
fewer Special Agents and Intelligence Analysts. State, local, and 
tribal law enforcement agencies will not be able to fill the void 
created by the loss of FBI funding, staffing, and intelligence.
    By reducing the number of Special Agents, Intelligence Analysts, 
and other FBI personnel focused on crime and corruption along the 
Southwest border, sequestration will increase the risk of harm from 
violent crimes committed by Mexican Drug Trafficking Organizations 
affecting the United States. Fewer FBI resources will be available to 
deploy against public corruption threats in the Southwest border region 
that only the FBI is positioned to address.
    Regional Computer Forensic Laboratory (RCFL) operations will be 
reduced and/or eliminated. Digital evidence extracted from computers, 
cellular telephones, removable storage media, and other devices has 
become more common and more critical to investigations at the Federal, 
State, and local levels--RCFLs are joint FBI/State/local partnerships 
aimed at exploiting such evidence and items. The RCFL partnership is 
more cost-effective for State and local participants due to the high 
cost of establishing, operating, maintaining and staffing individual 
computer forensic laboratories. The loss of funding to operate and 
maintain RCFLs would shift the burden of computer forensics to State 
and local agencies which often do not have sufficient numbers of 
trained personnel, nor access to necessary examination tools and 
technology, to conduct their own computer forensic analyses.
Criminal Justice Services
    Timely processing and searching of National Instant Criminal 
Background Check System (NICS) requests for purchases of firearms would 
be affected by sequestration. On average, approximately 43,500 NICS 
searches are performed daily. The Brady Act requires the NICS checks to 
be completed in 3 business days or the Federal Firearms Licensee (FFL) 
can legally transfer the firearm to a purchaser--without a final NICS 
determination. The FBI is also mandated to provide an immediate 
determination no less than 90 percent of the time. Delays in processing 
and adjudicating NICS requests increases the risk of firearms being 
transferred to a convicted felon or other prohibited person which, in 
turn, would have a significant detrimental effect on public and law 
enforcement safety at a time when the NICS workload is expanding.
    Sequestration could negatively impact the timeliness of FBI 
criminal justice services depended upon by the Nation's law enforcement 
and criminal justice communities. On a daily basis, police and sheriff 
agencies query the National Crime Information Center (NCIC) 
approximately 8 million times for traffic stops, investigations, and 
related activities. Access to, and reliability of, NCIC could be 
impacted by lack of hiring for the Criminal Justice Information 
Services program, loss of contractor support staff, and the inability 
to provide routine maintenance and replacement of system hardware.
    The capacity of the FBI to receive and process nearly 51 million 
checks of electronic and paper-based fingerprints submitted by State 
and local law enforcement to the Integrated Automated Fingerprint 
Identification System (IAFIS) could be similarly impacted by lack of 
staff hiring, loss of contractor support, and the inability to provide 
routine maintenance and replacement of system hardware. As a result, 
criminals using false identities may go undetected or be released due 
to lack of a timely response. Further, fingerprints and criminal 
history information submitted to the FBI are used for background checks 
to assist in determining the suitability of persons seeking employment 
as school bus drivers, child care providers, teachers, law enforcement, 
bank tellers, and security traders, among others. Increased system 
downtime could also affect the ability of the FBI to process such 
requests.
Operational Technology
    All FBI operations and investigations are dependent on technology. 
Sequestration would reduce funding available for operating and 
maintaining the FBI's existing operational technology, as well as 
acquiring upgrades and new technology needed to address evolving 
threats and to counter the growing and sophisticated technology 
capabilities of terrorist, cyber, intelligence, and criminal 
adversaries. Deferral of routine maintenance or replacement of 
components would result in operational technology systems and equipment 
that are subject to more frequent breakdowns--with the potential 
consequence of lost opportunities to collect critical evidence or 
intelligence, Without adequate funding for maintaining existing 
operational technology, or investing in new technology, the FBI will 
fall behind in its ability to address existing and new threats to U.S. 
national security and investigate violations of Federal criminal laws.
Operational Infrastructure
    To perform its vital and critical national security and criminal 
investigative missions, the FBI operates and staffs a network of 56 
major Field Offices and approximately 370 smaller resident agencies in 
communities across the United States, as well as a criminal justice 
services complex, a training academy, an operational technology 
facility, and a forensic laboratory. Additionally, the FBI operates and 
staffs 63 Legal Attache posts in U.S. Embassies around the world. If 
reduced or closed, the loss of overseas Legal Attache posts would 
reduce cooperation and collaboration among foreign law enforcement 
partners. Connecting these locations are specialized information 
technology and communications networks and systems. Appropriate 
security measures are employed to ensure the safety of FBI employees, 
other agency, and contractor personnel and the physical protection of 
FBI work sites.
    Sequestration will hinder the FBI's ability to successfully 
investigate computer intrusions in a timely manner through court-
authorized electronic surveillance due to reductions that would impact 
the funding levels of these supporting efforts. In addition, a 
reduction would impact the FBI's operational infrastructure that 
handles evidence regarding malware and intrusions. This ability is 
essential for enabling collaborative analysis across the FBI in support 
of computer intrusion investigations.
    Reductions to the Information Technology budget due to 
sequestration would not only extend the technology refresh rate, which 
has been drastically reduced from prior offsets, but also would 
increase the FBI's risk of technological and operational disruptions, 
including system failure due to aging software and hardware.
    Due to already constrained IT budgets, 8- to 12-year old data 
storage devices on FBINet recently failed in multiple Field Offices and 
Divisions. Specifically, the Lab Division experienced an outage for 
over 2 weeks and could not process evidence critical to FBI operations, 
resulting in a backlog of critical tasks and loss of work-hours. 
Reductions from sequestration would impede the FBI's ability to 
complete implementation of a Centralized Tiered Storage solution, which 
addresses these operational gaps. Data storage, backup, and replication 
are critical to the FBI's ability to accomplish day-to-day missions.
    In addition to reducing the FBI's ability to fix critical IT 
infrastructure issues, sequestration reductions would require the 
elimination of some key support contracts. Without these support and 
maintenance services, the FBI's systems are subject to even greater 
risks in that they provide critical security patches and anti-virus 
software that safeguard systems and networks.
    Sequestration would impact the FBI's operational infrastructure. It 
may become necessary, over time, to consolidate and/or close field 
locations, reducing access to FBI services in some communities. 
Maintenance or physical facilities would be deferred, resulting in more 
costly repairs in the future. Reliability of information technology and 
communications networks could be affected by an inability to provide 
routine maintenance and replacement of equipment that becomes obsolete 
or broken.
                                 ______
                                 
             National Aeronautics and Space Administration
    This is in response to your letter of January 18, 2013, requesting 
information about the potential impacts of the March 1, 2013, 
sequestration on NASA. Our response articulates impacts of 
sequestration relative to the President's fiscal year 2013 budget 
request for NASA of $17,711.4 million in direct discretionary funding. 
NASA estimates that a March 1 sequester applied to the annualized 
levels in the current fiscal year 2013 Continuing Appropriations 
Resolution (Section 101, Public Law 112-175) would reduce the total 
NASA funding level to $16,984.7 million in direct discretionary 
funding, or $726.7 million less than the President's fiscal year 2013 
budget request, and $894.1 million less than the annualized levels in 
the current fiscal year 2013 Continuing Appropriations Resolution.
    Overall, for purposes of this assessment, the Agency assumed that 
the fiscal year 2013 continuing resolution, with all of its terms and 
conditions, would be extended from March 27 to September 30, 2013, and 
that the sequester would cancel 5 percent of the full-year amount, 
which would be the equivalent of roughly a 9 percent reduction over the 
remaining 7 months of the fiscal year. NASA's assessment of the impacts 
of a March 1 sequester is presented in the enclosure.
    I would be pleased to discuss this information with you in greater 
detail if you wish.
  impacts of march 1, 2013, sequester on fiscal year 2013 president's 
                        budget request for nasa
Science (President budget request: $4,911.2 million; -$51.1 million 
        sequester impact to fiscal year 2013 budget request)
    Sequestration would reduce Science by $51.1 million below the 
fiscal year 2013 budget request, which would cause NASA to have to take 
such steps as:
  --Reducing funding for new Explorer and Earth Venture Class mission 
        selections by 10 to 15 percent, resulting in lower funding 
        levels for new activities and causing minor launch delays, and
  --Reducing funding available for competed research (e.g., ``research 
        and analysis'') projects by about 2 percent, resulting in about 
        a 5 percent reduction in new awards to support labor/jobs at 
        universities, businesses, and other research entities 
        distributed around the Nation this year. Ongoing projects 
        started with awards made prior to this fiscal year would not be 
        affected.
Aeronautics (President budget request: $551.5 million; -$7.3 million 
        sequester impact to fiscal year 2013 budget request)
    Sequestration would reduce Aeronautics by $7.3 million below the 
fiscal year 2013 budget request. The Aeronautics Mission Directorate 
would need to take cuts to areas such as funding for facilities 
maintenance and support; air traffic management concept development; 
systems analysis conducted with the Joint Planning and Development 
Office; research into safety for vehicle and systems technologies; and 
research into civil tilt-rotor technologies. These reductions would 
decrease or delay NASA's ability to develop technologies necessary to 
enable next generation air traffic management and to ensure needed 
safety levels. The reductions would also negatively impact NASA's 
ability to maintain and operate national asset level test facilities to 
support the related R&D efforts, and would lead to cancellations of 
ongoing partnerships.
Space Technology (President's budget request: $699.0 million; -$149.4 
        million sequester impact to fiscal year 2013 budget request)
    Sequestration would reduce Space Technology by $149.4 million below 
the fiscal year 2013 budget request. At that funding level, the Space 
Technology Mission Directorate cannot maintain its technology portfolio 
as several projects underway require increased funding in fiscal year 
2013 to proceed. Thus NASA would likely have to cancel one of these 
projects or be able to offer no new awards for programs that vary in 
scope from research grants, to public-private partnerships, to in-space 
demonstrations during fiscal year 2013. NASA would also consider the 
following:
  --Canceling 6 technology development projects, including work in deep 
        space optical communications, advanced radiation protection, 
        nuclear systems, deployable aeroshell concepts, hypersonic 
        inflatable Earth reentry test, and autonomous systems. In 
        addition, the program would consider delaying an additional 9 
        projects.
  --Canceling several flight demonstration projects in development, 
        including the Deep Space Atomic Clock, Cryogenic Propellant 
        Storage and Transfer and the Materials on International Space 
        Station Experiment-X projects.
  --Elimination or de-scoping of annual solicitations for Space 
        Technology Research Grants (STRG), NASA Innovative Advanced 
        Concept (NIAC), and the Small Spacecraft Technology (SST) 
        Program.
  --Reduction in the number of Flight Opportunity program flights and 
        payloads that could be flown in fiscal year 2013 and beyond.
  --Elimination of Centennial Challenges funding to perform new prizes.
Exploration (President's budget request: $3,932.8 million; -$332.2 
        million sequester impact to the fiscal year 2013 budget 
        request) \1\
---------------------------------------------------------------------------
    \1\ The Agency is currently operating under a continuing resolution 
operating plan under which $53 million was transferred from the 
Exploration account to the Space Operations account ($3 million) and 
the Construction and Environmental Compliance and Restoration account 
($50 million). The effect of $53 million in transfers from Exploration 
to other accounts under the Agency's continuing resolution operating 
plan is not included in this description.
---------------------------------------------------------------------------
    Sequestration would reduce Commercial Space Flight funding by 
$441.6 million below the fiscal year 2013 budget request. After 
sequestration, NASA would not be able to fund milestones planned to be 
allocated in the fourth quarter of fiscal year 2013 for Commercial Crew 
Integrated Capability (CCiCap) such as the SpaceX Inflight Abort Test 
Review, the Boeing Orbital Maneuvering and Attitude Control Engine 
Development Test, and the Sierra Nevada Corporation Integrated System 
Safety Analysis Review #2. Overall availability of commercial crew 
transportation services would be significantly delayed, thereby 
extending our reliance on foreign providers for crew transportation to 
the International Space Station.
    The sequester would also reduce Exploration Research and 
Development funding by $45.5 million below the fiscal year 2013 budget 
request. For Advanced Exploration Systems, the sequester would delay 
procurement of critical capabilities required for the next phase of 
Human Space Exploration. In the Human Research Program (HRP), national 
research solicitations/selections would be cancelled, with the largest 
impact likely being at the Johnson Space Center. Additionally, reduced 
resources for the HRP would likely result in reduced funding to the 
National Space Biomedical Research Institute and delay NASA Space 
Radiation Laboratory upgrades.
Construction and Environmental Compliance and Restoration (CECR) 
        (President's budget request: $619.2 million; -$251.7 million 
        sequester impact from fiscal year 2013 budget request) \2\
---------------------------------------------------------------------------
    \2\ The effect of a $50 million transfer from Exploration to CECR 
Exploration CoF is not included in this description.
---------------------------------------------------------------------------
    For the Construction of Facilities (CoF) program, the $227.8 
million sequester impact would adversely impact the infrastructure 
needed for NASA's Space Launch System (SLS), Orion Multi-Purpose Crew 
Vehicle, Launch Services, Rocket Propulsion Test, 21st Century Launch 
Complex, Commercial Crew and Cargo, and Space Communications and 
Navigation (SCaN) programs.
  --Sequestration would leave NASA with almost no funds for 
        Programmatic CoF.
  --Sequestration would cancel many institutional construction projects 
        that would repair, refurbish, or replace critical 
        infrastructure that supports NASA's mission. These projects are 
        required to repair NASA's rapidly deteriorating infrastructure 
        in order to protect NASA employees and meet Mission 
        requirements. For Institutional CoF, projects are likely to be 
        cancelled at the following locations: Glenn Research Center, 
        Goddard Space Flight Center/Wallops Flight Facility, Jet 
        Propulsion Laboratory, Johnson Space Center, Kennedy Space 
        Center, Langley Research Center, and Marshall Space Flight 
        Center.
    For the Environmental Compliance and Restoration program, the $23.9 
million sequester impact would result in numerous delays to projects 
requiring re-negotiation of agreed upon compliance dates, with the 
potential for the imposition of fines for non-compliance. The most 
pronounced impacts would likely occur at the Santa Susana Field Lab, 
Kennedy Space Center, and White Sands Test Facility.
Office of the Inspector General (President's budget request: $37 
        million; -$0.4 million sequester impact from fiscal year 2013 
        budget request)
    Sequestration would reduce the Office of Inspector General by $0.4 
million, which would reduce future hiring and mean that some critical 
positions are not back-filled. These impacts would likely result in 
fewer audits and investigations.
                                 ______
                                 
                      National Science Foundation
    This letter is in reply to your request for information regarding 
the impact of a possible sequester on the National Science Foundation's 
(NSF) operations and activities.
    At NSF, the central focus of our planning efforts will be 
predicated on the following set of core principles: First and foremost, 
protect commitments to NSIT's core mission and maintain existing 
awards; protect the NSF workforce; and protect STEM human capital 
development.
    By adhering to these principles and the Government-wide guidance 
provided in OMB memorandum M-13-03, ``Planning for Uncertainty with 
Respect to Fiscal Year 2013 Budgetary Resources,'' the Foundation will 
best accommodate the possible sequestration reductions in ways that 
minimize the impact on our mission, both short- and long-term.
    We do know, however, that the required levels of cuts to our 
programmatic investments would cause a reduction of nearly 1,000 
research grants, impacting nearly 12,000 people supported by NSF, 
including professors, K-12 teachers, graduate students, undergraduates, 
K-12 students, and technicians.
    Vital investments in basic research, leading edge technology, and 
STEM education would be jeopardized. Impacted areas could include:
  --NSF-wide emphasis on sustainability, including vital investments in 
        clean energy research;
  --Major investments critical to job creation and competitiveness, 
        such as advanced manufacturing and innovation;
  --Advances in cybersecurity aimed at protecting the Nation's critical 
        information technology;
  --Pathbreaking efforts to improve pre-college and undergraduate 
        education, including new investments to transform undergraduate 
        science courses.
    Major Research Equipment and Facilities Construction funding at 
$160 million or less in fiscal year 2013 will result in the termination 
of approximately $35 million in contracts and agreements to industry 
for work in progress on major facilities for environmental and 
oceanographic research. This would directly lead to layoffs of dozens 
of direct scientific and technical staff, with larger impacts at 
supplier companies. In addition, out-year costs of these projects would 
increase by tens of millions because of delays in the construction 
schedule.
    Thank you for the opportunity to provide you with this look at 
possible impacts of a sequester on the Foundation. Please let me know 
if you have any additional questions, and as always, thank you for your 
strong support of the Foundation.
                                 ______
                                 
                     Small Business Administration
    Thank you for the opportunity to discuss the effects sequestration, 
if it occurs, would have on the small businesses throughout the country 
that receive services from the Small Business Administration (SBA). As 
you know, SBA's mission is to give small businesses the tools they need 
to grow and create jobs. We deliver these tools through our ``3 C's''--
capital, contracting, and counseling. Sequestration's indiscriminate 
cuts would limit our ability to deliver these vital services to small 
businesses at a time when they, and our Nation's economy, can scarcely 
afford it.
Capital
    To help small businesses across the Nation access capital, SBA 
guarantees loans made by banks to small businesses who do not qualify 
for traditional loans. Sequestration would cut SBA loan subsidy by 
$10.5 million. While this may not sound like a significant figure 
relative to the Federal Government's overall budget, each subsidy 
dollar is used to guarantee an average of $51 worth of loans for small 
businesses. This means that sequestration would take away SBA's ability 
to make 1,100 small businesses loans--loans that could have helped 
small businesses access more than $540 million of capital. 
Additionally, these funds would have supported approximately 5,800 jobs 
in industries like manufacturing, food services and hospitality which 
are still struggling to recover.
Contracts
    SBA works with Federal agencies to meet the statutory goal that 23 
percent of the money the Federal Government spends goes to small 
businesses. We also work with small businesses directly, through 
training and business development programs, to help small businesses 
compete for and win contracts. Under sequestration, there would be both 
fewer Federal contracts for small businesses to win, and less technical 
assistance to help small businesses compete for those opportunities. 
This would put an additional burden on small business contractors who 
would see a decline in revenue of over $4 billion. Furthermore, our 
ability to identify and address fraud, waste, and abuse through 8(a) 
and HUBZone reviews would be compromised. In fact, the agency would be 
forced to do 350 fewer 8(a) reviews and 40 fewer HUBZone reviews.
Counseling
    SBA's nationwide counseling network of 68 district offices, nearly 
900 Small Business Development Centers (SBDCs), 110 Women's Business 
Centers (WBCs) and 350 chapters of SCORE, would all lose significant 
funding due to sequestration. Examples of how the funding losses would 
negatively impact our resource partners are set forth below.
  --WBCs would be equipped to serve 12,000 fewer small businesses. By 
        extension, between 100 and 200 fewer women-owned businesses 
        would start as a result of WBC assistance compared with fiscal 
        year 2012.
  --SBDCs would be able to help 2,000 fewer long-term counseling 
        clients. This would hit many SBDC programs in smaller States 
        especially hard, since they rely more heavily on the leverage 
        that Federal funding provides.
  --SCORE would be prepared to counsel approximately 19,000 fewer small 
        businesses than in 2012. This would also affect SCORE's ability 
        to recruit and sustain volunteers, which could have long-term 
        impacts on the strength of their nationwide volunteer cadre.
  --SBA would be unable to continue funding the Advanced Manufacturing 
        Clusters. SBA would also not be able to participate in any new 
        interagency cluster initiatives. SBA would continue funding the 
        seven SBA Regional Innovation Clusters, but at a significantly 
        reduced level.
    The impacts listed above are illustrative, not exhaustive. They 
represent merely a sampling of the most significant impacts that would 
likely result from sequestration. Additionally, the indirect effects of 
reduced funding on SBA's business partners go beyond the impacts 
described above. For instance, most of SBA's resource partners rely on 
matching funds from other, non-Federal sources. Historically, 
reductions in Federal funding have led to reductions in matching 
contributions. Losing both Federal funding and the State, local, or 
private funding it matches, could effectively double the negative 
budget impacts of sequestration for SBA's business partners.
    Thank you for giving us the opportunity to describe the effects of 
sequestration on the small business community we serve. If you and your 
staff have additional questions about the matters discussed in this 
letter, please contact our Office of Congressional and Legislative 
Affairs at (202) 205-6700.
                                 ______
                                 
                     Social Security Administration
    Thank you for the opportunity to discuss the effects of 
sequestration on the Social Security Administration (SSA). It is 
important to understand that sequestration would further exacerbate the 
negative effects of over two straight years of funding levels nearly $1 
billion below the President's budget requests. These funding levels 
have led to significant increases in our 800 number answer time and 
derailed progress we were making at eliminating our hearing backlog. As 
Congress considers the impact of sequestration and our future funding 
levels, it is important to remember that none of our work is 
discretionary; we must complete all benefit applications we receive. 
The longer it takes us to get to our incoming work, the more expensive 
it is to complete, and the greater the burden on the public. Moreover, 
if we do not have enough resources to keep our records accurate, it 
causes improper payments.
    What has helped us endure lean budget years is our reengineered 
business processes and online suite of services without which our 
backlogs and wait times would be significantly worse. However, the core 
of our work is--and will likely always be--people based. Even with 
productivity increases over the last 5 years, if we do not have enough 
staff to keep up or if furloughs prevent them from working, the public 
can expect to wait longer in our offices, on the phone, and for 
disability decisions at all levels.
    If sequestration occurs, we estimate that visitors to our field 
offices could wait almost 30 minutes to see a representative, and 
callers to our 800 number would wait almost 10 minutes for us to 
answer. The pending levels of initial disability claims would rise by 
over 140,000 claims, and on average, applicants will have to wait about 
2 weeks longer for a decision on an initial disability claim and nearly 
1 month longer for a disability hearing decision.
    At this stage of our planning, sequestration would result in the 
loss (i.e. attrition without replacement) of over 5,000 more employees 
in fiscal year 2013, the termination of over 1,500 temporary employees 
and reemployed annuitants, and the elimination of overtime except for 
life, safety, and health concerns. We would be forced to reduce cost-
effective program integrity work (continuing disability reviews (CDRs) 
and Supplemental Security Income (SSI) redeterminations). Please note 
that every dollar spent on medical CDRs will yield an estimated $9 in 
program savings over 10 years, and every dollar spent on SSI 
redeterminations will yield an estimated $6 in program savings over 10 
years.
    We would operate with minimum non-personnel spending, only funding 
the most essential costs such as mandatory contracts and rent on our 
buildings. As a result, we might reduce contractor support. 
Sequestration would significantly reduce our Information Technology 
(IT) funding. We would use our limited funds primarily to sustain our 
IT infrastructure. We would not have sufficient funds to invest in the 
type of automation that makes us substantially more efficient each 
year.
    We would try to prioritize our reductions to avoid furloughs that 
would further harm services and program integrity efforts; however, the 
possibility of furloughs remains uncertain at this time. The value of a 
furlough day is about $25 million. With each furlough day, we would not 
be able to complete roughly 20,000 retirement claims, more than 10,000 
disability claims, and 3,000 hearings. It would increase the backlog of 
initial disability claims and erode the significant progress we have 
made in the hearings backlog. The wait for service in our field offices 
and on our 800 number network would further increase.
    Sequestration would affect State and local economies as well 
because we must cut the administrative funding we provide State 
disability determination services to make disability determinations for 
us. In addition, growing backlogs would delay claimants' first checks, 
which delays money going into State and local economies.
    I hope this information is helpful. If you have any questions, 
please contact me or have your staff contact Bonnie Kind, our Associate 
Commissioner for Budget, at (410) 965-3501.

    Chairwoman Mikulski. For my members, I would like to thank 
the active participation, the fact that really everybody stayed 
pretty much within the 5-minute rule, I mean, it is now just a 
little past 12:30 p.m. And I think this is really the tone and 
the tempo that I had hoped.
    We moved briskly. People exercised their due diligence. I 
thought the questions were excellent, very content-rich.
    And also--and I think, Senator Cochran, you would agree--
the decorum of the committee was such that we would hope would 
be the tenor of this committee, and, hopefully, even spread 
within the Congress.
    So, yes, we fear outside foreign predators. We fear, at 
times, foreign competitors. But this is a self-inflicted wound. 
And I think we need to deal with it, and we need to deal with 
it expeditiously.

                     ADDITIONAL COMMITTEE QUESTIONS

    So thank you. And this committee, if there are no further 
questions, Senators may submit additional questions.
    [The following questions were not asked at the hearing, but 
were submitted to the various Departments for response 
subsequent to the hearing:]
                 Questions Submitted to Danny I. Werfel
             Question Submitted by Senator Mary L. Landrieu
    Question. Information technology (IT) spending accounts for 
approximately 2 percent of the budget and is growing. The Department of 
Homeland Security (DHS) has received recognition for its data center 
consolidation efforts due to the cost and management efficiencies that 
have been gained and the amount of money that will be saved over time. 
Do you think other agencies can replicate work similar to DHS's in IT 
to generate savings across the Government?
    Answer. In February 2010, the Office of Management and Budget (OMB) 
initiated the Federal Data Center Consolidation Initiative (FDCCI) that 
called for all agencies to shutdown data centers we don't need, and 
consolidate and optimize those that we do. DHS has been a leader in 
data center consolidation and is realizing many of the benefits 
outlined in the FDCCI, such as promoting green IT by reducing the 
overall energy and real estate footprint; reducing the cost of data 
center hardware, software, and operations; increasing the overall IT 
security posture of the government; and shifting IT investments to more 
efficient computing platforms and technologies. Many other agencies 
have also made consolidation a priority. The FDCCI Data Center Closings 
2010-2013 dataset (https://explore.data.gov/Federal-Government-
Finances-and-Employment/Federal-Data-Center-Consolidation-Initiative-
FDCCI/d5wm-4c37) provides a list of planned or closed data centers by 
agency and by city/State location since the inception of FDCCI.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed
    Question. Can you tell the committee what to expect in terms of 
closures or reduced services at national parks across the country if 
sequestration takes effect? What are some specific examples of 
activities that are at risk because of these cuts?
    Answer. The public should be prepared for reduced hours and 
services provided at the Nation's 398 national parks, 561 refuges, and 
more than 258 public land units. Sequestration would reduce hours of 
operation for visitor centers, shorten seasons, and possibly close 
camping, hiking, and other recreational areas when there is 
insufficient staff to ensure the protection of visitors, employees, and 
resources. The effects of sequestration would cause complete closure or 
program elimination at about 128 refuges. The visitor programs at 
nearly all refuges would be discontinued. Additionally, sequestration 
would limit the Department of the Interior's ability to sustain a full 
complement of seasonal employees needed for firefighting, law 
enforcement, and visitor services at the time when parks, refuges, and 
land areas are preparing for the busy summer season.
    Examples of impacts to national parks include:
  --Delaying by 2 weeks the opening of the Going-to-the-Sun Road--the 
        only road to access all of Glacier National Park--will result 
        in up to $1 million in lost revenue daily for surrounding 
        communities and concessionaires;
  --Closing the Province Lands Visitor Center at Cape Cod National 
        Seashore from May through October will affect at least 250,000 
        visitors; and
  --Eliminating most education and interpretive programs at Gettysburg 
        National Military Park will impact 2,400 students and 4,000 
        other visitors.
    Local communities and businesses that rely on recreation to support 
their livelihoods would face a loss of income from reduced visitation 
to national parks, refuges, and public lands. As a point of comparison, 
the 435 million recreational visits to Department of the Interior 
managed lands in 2011 supported about 403,000 jobs nationwide and 
contributed nearly $48.7 billion to local economies.
    Question. Will cuts required by sequestration specifically impede 
progress toward improving energy production from public lands? Will 
decreased energy production ultimately cost the Federal Government 
money in the form of lost revenue from royalties and other payments?
    Answer. Development of oil, gas, and coal on Federal lands and 
waters would slow down due to cuts in programs that: issue permits for 
new development; plan for new projects; conduct environmental reviews; 
and inspect operations.
    Leasing of new Federal lands for future development would also be 
delayed, with fewer resources available for agencies to prepare for and 
conduct lease sales. As a result:
  --Efforts to expedite processing of offshore oil and gas permitting 
        in the Gulf of Mexico would be thwarted by delays, putting at 
        risk some of the 550 exploration plans or development 
        coordination documents Bureau of Ocean Energy Management (BOEM) 
        anticipates for review this year;
  --Reductions would impact BOEM's oil and gas activities in the Alaska 
        region, including the processing of geological and geophysical 
        (G&G) seismic permits, review and analysis needed for 
        Environmental Assessments, work on Worst Case Discharge 
        analysis for drilling permit reviews, and Air Quality data 
        gathering and modeling work with other Federal agencies;
  --Approximately 300 fewer onshore oil and gas leases would be issued 
        in Western States such as Wyoming, Utah, Colorado, and New 
        Mexico, delaying prospective production from those lease tracts 
        and deferring payments to the Treasury;
  --Delays in coal leasing would defer as much as $50 to $60 million 
        from the Treasury for each sale delayed; and
  --The Fish and Wildlife Service would conduct approximately 2,000 
        fewer consultations, delaying economic development projects and 
        energy facilities that need environmental approvals.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
    Question. Sequestration would likely lead to hundreds of thousands 
of Federal employees being furloughed. For example, the Internal 
Revenue Service (IRS) could be forced to furlough customer service 
representatives who help taxpayers understand their obligations and 
revenue agents who pursue tax cheats. How would such IRS furloughs 
impact our ability to generate revenue and sustain economic growth?
    Answer. The effects of sequestration would be undoubtedly painful 
for the IRS, reducing the agency's ability to provide quality services 
to taxpayers. For example, the cuts to operating expenses and expected 
furloughs would prevent millions of taxpayers from getting answers from 
IRS call centers and taxpayer assistance centers and would delay IRS 
responses to taxpayer letters. The IRS would be forced to complete 
fewer tax return reviews and would experience a reduced capacity to 
detect and prevent fraud. This could result in billions of dollars in 
lost revenue and further complicate deficit reduction efforts. In 
recent years, each dollar spent on the IRS has returned at least $4 in 
additional enforcement revenue. Thus, each dollar the sequester cuts 
from current IRS operations would cause a net increase to the deficit, 
as the lost and forgone revenue would exceed the spending reduction.
    Question. The testimony today makes clear that sequestration would 
be devastating for families, children, and seniors. This year, the 
sequester would cut $85 billion. Are there tax loopholes that we could 
close that would achieve the same amount of deficit reduction?
    Answer. As the President has said, the administration supports 
significant deficit reduction on the order of $4 trillion over a decade 
that would put us on a fiscally sustainable path and allow our economy 
to grow and continue to create jobs. This should be achieved through 
closures of tax loopholes and reducing the value of deductions combined 
with spending cuts and entitlement reforms.
    Leaders in both parties have identified the need to get rid of tax 
loopholes and deductions that only benefit wealthy Americans and well-
connected corporations. The President's proposal to Speaker Boehner, 
which is still on the table, identified $580 billion in deficit 
reduction by taking these measures.
    Working together, the administration and the Congress have already 
achieved more than $2.5 trillion in deficit reduction, primarily 
through reductions in spending. To reach our $4 trillion goal, the 
President believes that we must take a balanced approach that includes 
both common-sense tax reforms, such as the ones the President has 
proposed, and further targeted spending cuts.
                                 ______
                                 
                Question Submitted by Senator Jon Tester
    Question. Department of Defense (DOD) contractors can charge 
taxpayers more than $750,000 for their annual compensation. For non-DOD 
agencies, only a fraction of contractors are capped at approximately 
$763,000, while the rest can charge taxpayers even more. Last year, 
under a statutory formula, contractors received a 10-percent increase 
in their compensation. Federal employees have had their pay frozen for 
the last 2 years, and may only receive a 0.5 percent pay increase later 
this year. Officially, the Office of Management and Budget has 
expressed support for capping at $200,000 only the five highest-
compensated employees at each contractor. There was a provision in the 
Senate fiscal year 2013 National Defense Authorization Act to cap 
contractor compensation at $200,000. The fiscal year 2013 Financial 
Services and General Government Appropriations Act contained a 
provision that would have capped non-DOD contractors at $400,000. Do 
you think this extraordinary taxpayer-paid compensation for service 
contractors is appropriate during these austere times? Does the 
administration support capping taxpayer compensation for service 
contractors at $200,000 and devote the savings to offsetting 
sequestration?
    Answer. Under current law, contractors that are paid based on their 
incurred costs may demand reimbursement for executive and employee 
salaries up to the level of the Nation's top private sector Chief 
Executive Officers and other senior executives. These salaries and 
benefits have increased by more than 300 percent since the law was 
enacted in the mid-1990s, a staggering increase. The administration was 
encouraged by the congressional actions you identified that would lower 
the cap and cover all contractor employees--both defense and civilian. 
The administration has put forward specific legislative proposals that 
would create greater parity between what the Government pays for 
contractors' executives and employees and its own executives and 
employees and give our taxpayers the overdue relief they deserve.
                                 ______
                                 
               Question Submitted by Senator Mark Begich
    Question. Mr. Werfel, in your testimony you state ``it is wasteful 
and inefficient for the Government to operate under this cloud of 
uncertainty and to divert resources to plan for extraordinarily 
disruptive contingencies that are within the Congress' authority to 
avoid.'' Please elaborate on this statement.
    How would the Congress delaying sequestration, instead of passing 
balanced deficit reducing package including both revenue increases and 
spending decreases, result in additional diversion of resources and 
inefficiencies? Would you agree we need to consider solutions and 
compromise instead of delay?
    Answer. In order to plan for the orderly and responsible 
implementation of sequestration, the Federal Government must expend a 
significant amount of time and resources and divert attention from 
mission critical activities. At a time of tight budgetary resources, 
this is not a wise way for the Federal Government to operate, and 
prevents the Government from carrying out its core mission on behalf of 
the American people.
    Rather than a series of continued crises created by uncertainty 
surrounding whether the Congress will act, the President believes that 
the Congress should take prompt and comprehensive action to complete 
the job of balanced deficit reduction. This is the President's goal. 
But should the Congress not have time to complete this goal before 
sequestration is scheduled to occur on March 1, the President has said 
that, at a minimum, the Congress should pass a small package of 
spending cuts and tax reforms that would delay the damaging effects of 
sequestration until the Congress finds a way to replace these cuts with 
a smarter solution.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
    Question. Mr. Werfel, does the President want unchecked authority 
to transfer funds among appropriations accounts as a tool to change or 
modify the effects of sequestration?
    Answer. The President believes the right answer to address 
sequestration is not to attempt to make the cuts themselves more 
manageable, as no amount of flexibility can avoid the significant and 
harmful consequences brought on by sequestration.
    Cuts of this magnitude will inevitably have significant and harmful 
effects, no matter how they are applied. Moreover, protecting certain 
programs only increases the amount that would have to be reduced from 
other programs. For example, fewer cuts to title I funding could just 
mean more cuts to IDEA grants for students with disabilities. Fewer 
cuts to the Federal Bureau of Investigation would just mean further 
cuts to the Bureau of Prisons or the U.S. Attorney's office.
    The President believes that the right answer is for the Congress to 
work to enact balanced deficit reduction and avoid sequestration.
    Question. Secretary Napolitano and Mr. Werfel, this question is for 
you both. Information technology spending accounts for approximately 2 
percent of the budget and is growing. The Department of Homeland 
Security (DHS) has received recognition for its data center 
consolidation efforts due to the cost and management efficiencies that 
have been gained and the amount of money that will be saved over time. 
Do you think other agencies can replicate work similar to DHS's in 
information technology to generate savings across the Government?
    Answer. According to data compiled for the fiscal year 2013 
President's budget, Federal information technology spending has 
actually decreased since fiscal year 2009 after growing at an annual 
compound rate of 7 percent between fiscal years 2001 and 2009. This is 
consistent with the administration's policy of innovating with less. As 
a result, the Federal Government has seen significant progress in 
innovation and efficiency by decreasing duplicative investments, such 
as data centers, while investing in innovative technology, such as 
cloud solutions. Agencies will continue to cull from low-value and 
duplicative technology investment in order to invest in the innovation 
that is necessary to drive more effective and efficient Government 
operations.
    Many agencies are replicating in some manner the work ongoing at 
DHS. However, data center consolidation is just one piece of a larger 
push to innovate with less, and every agency in the executive branch 
should be working hard to identify low-value investment in order to 
create capital for the innovation that needs to occur. Larger, 
fragmented agencies will likely have similar opportunities to reduce 
duplication as DHS is, but even in the smaller less federated agencies 
there is also a great opportunity to innovate with less.
                                 ______
                                 
               Questions Submitted by Senator Jerry Moran
                  national institutes of health grants
    Question. Due to the funding cycle of new grants at the National 
Institutes of Health (NIH), many of which are not awarded until later 
in the fiscal year, will existing NIH research feel the brunt of 
sequestration more significantly than new awards? How do you expect 
cuts to be distributed between existing and new research awards?
    Answer. NIH faces a cut of some $1.5 billion from its $30 billion 
budget under sequestration. The statute requires the reductions be 
applied equally to each program, project and activity (PPA). NIH's 
budget structure includes approximately 35 PPAs that are primarily at 
the Institute or Center (IC) level. For example, most of the 27 ICs are 
PPAs. The NIH Director does not have the discretion to change the 
amount of the reductions to each PPA. The application of the sequester 
cuts will depend on the circumstances of the particular IC.
    In general, NIH expects that grant funding within States will 
likely be reduced through both reductions to existing grants and fewer 
new grants. NIH expects that some existing research projects could be 
difficult to pursue at reduced levels and some new research could be 
postponed as NIH would make hundreds fewer awards. Actual funding 
reductions will depend on the final mix of projects chosen to be 
supported by each Institute and Center within available resources. With 
each research award supporting up to seven research positions, several 
thousand research positions across the Nation could be eliminated.
       national institutes of health public-private partnerships
    Question. Mr. Comptroller, we are living under constrained budgets 
and should sequestration go into effect, agencies will have to continue 
to do more with less. I am particularly concerned that NIH will receive 
a $1.6 billion reduction. With the creation of its newest Center last 
year--the National Center for Advancing Translational Sciences 
(NCATS)--NIH has renewed its focus on moving basic science from bench-
to-bedside. In particular, I believe NCATS has used its resources 
wisely by partnering with universities, private research entities, and 
pharmaceutical companies to develop new treatments through repurposing 
existing drug compounds. For example, in Kansas, the University of 
Kansas Cancer Center has been engaged in a successful drug repurposing 
project--the Learning Collaborative--with NCATS and the Leukemia & 
Lymphoma Society. This project leverages Federal, State, and private 
dollars to develop new treatments for drugs previously discontinued by 
pharmaceutical companies. As we deal with sequestration and shrinking 
budgets, do you expect the Office of Management and Budget and NIH to 
continue to support these types of public-private partnerships?
    Answer. While NIH will continue supporting partnerships with 
private and not-for-profit organizations because these efforts help 
facilitate the discovery of new treatments, diagnostic tools, and 
prevention interventions, the $1.5 billion reduction required under 
sequestration would require NIH to carefully examine all of its 
projects and make difficult cuts that would impede its ability to 
develop new drug treatments, conduct critical research into life-
threatening diseases, and fund numerous other critical priorities.
               national institutes of health authorities
    Question. Within our difficult budget environment, are there 
increased authorities that the NIH could benefit from to allow it 
flexibility to use their funds more efficiently? For example, would a 
more flexible licensing mechanism help NIH use their limited resources 
in a more effective manner?
    Answer. The President believes that no amount of flexibility can 
reduce the significant and harmful consequences brought on by 
sequestration. The sequester reductions must be applied equally to each 
PPA. The NIH Director does not have the discretion to change the amount 
of the reductions to each PPA. While NIH's budget structure does allow 
for some flexibility, because most of the 27 ICs are PPAs, cuts of this 
magnitude will inevitably have significant and harmful effects, no 
matter how they are applied. Moreover, protecting certain programs only 
increases the amount that would have to be reduced from other programs.
    The President believes that the right answer is for the Congress to 
work to enact balanced deficit reduction and avoid sequestration.
               centers for medicare and medicaid services
    Question. As our baby boomers age, the Medicare program is 
expanding at an astounding rate. In fiscal year 2012 there were 50 
million beneficiaries, and by 2022 the number is expected to increase 
by about one-third, to almost 67 million people. Medicare's benefit 
structure would remain largely unchanged and beneficiaries would not 
see a change in their Medicare coverage. However, a portion of Medicare 
spending, about $4 billion, is funded by the Labor, Health and Human 
Services, and Education, and Related Agencies Subcommittee. This 
portion is used almost entirely for program management, such as 
payments to contractors to process providers' claims, beneficiary 
outreach and education, and maintenance of Medicare's information 
technology infrastructure. Over the past year, how has Centers for 
Medicare and Medicaid Services (CMS) prepared for the possible 
reduction of program management funds?
    Answer. First, let us be clear that no amount of planning can fully 
mitigate the harmful effects of sequestration. While OMB has worked 
with all agencies, including CMS, over the past months to prepare to 
implement sequestration, these efforts will not prevent sequestration 
from causing significant disruption to a vast swath of programs and 
priorities.
    Under sequestration, CMS's payments to program providers, health 
plans, and drug plans under title XVIII of the Social Security Act will 
be reduced by 2 percent. This would result in billions of dollars in 
lost revenues to Medicare doctors, hospitals, and other providers who 
will only be reimbursed at 98 cents on the dollar for their services to 
Medicare beneficiaries. The sequestration of funds to administer the 
Medicare program would not be subject to a 2-percent cap, but rather 
would be subject to sequestration at the same rate as other non-defense 
spending.
    Sequestration would also limit the Department's ability to realize 
savings produced through proven investments, such as the Health Care 
Fraud and Abuse Control program. For every $1 spent to combat 
healthcare fraud through law enforcement work we have realized more 
than $7 return on investment. In fiscal year 2012 alone, we recovered a 
record-breaking $4.2 billion. These funding reductions will affect 
program operations and those who serve Medicare beneficiaries, 
regardless of the thorough planning activities in which CMS engages.
    Each agency is responsible for how it will implement the cuts 
required by sequestration, and I would refer you to CMS for specific 
information on how the agency prepared for the possible reduction of 
program management funds.
                                 ______
                                 
               Questions Submitted by Senator John Hoeven
    Question. Mr. Werfel, as you allude to your testimony (pg. 3), the 
U.S. Department of Agriculture (USDA) is considering, as a result of 
sequestration, furloughing Federal inspectors of meat, poultry, and egg 
products for 15 days. Establishments may not produce meat, poultry, or 
egg products without inspection, so furloughing inspectors would 
effectively shut these plants down for more than 2 weeks. This would 
mean financial hardship for those who work at these plants and for 
farmers and ranchers who would have no place to send their animals. In 
the past, it is my understanding that USDA Food Safety and Inspection 
Service (FSIS) inspectors have been considered ``essential Federal 
employees'' as they are ``necessary to protect life and health.''
    Mr. Werfel, what options do Federal agencies, such as FSIS, have to 
ensure essential employees are not furloughed? If there are options 
available to USDA to avert this inspection shutdown, do you think USDA 
should do so given the threat to the economy and public health? Is 
there really no other place within the FSIS budget to come up with the 
estimated 9-percent cut for the remainder of fiscal year 2013? If you 
do not know what can be done, I urge you to work with FSIS to come up 
with options, and I request that you provide those options to the 
committee as soon as possible.
    Answer. Eighty percent of USDA's total FSIS funding is spent on 
salaries and benefits. Of this total, 88 percent of FSIS employees are 
frontline personnel who are required by law to carry out inspection and 
inspection support activities for 6,290 meat, poultry, and processed 
egg establishments nationwide. Sequestration would force FSIS to do an 
agency-wide furlough for approximately 15 days affecting all of its 
approximately 10,000 employees.
    Furloughing food safety inspectors would not be good for consumers, 
the economy, the meat and poultry industry, or the USDA workforce. 
Accordingly, USDA views such furloughs as a last option to deal with 
sequestration. However, were sequestration to become a reality, it 
simply would not be possible for FSIS to achieve the requisite level of 
reductions by furloughing non-front-line staff alone. Equally 
important, most components of the FSIS team, whether at the district 
offices or in the field, are integrated and dependent on each other for 
the proper inspection of meat and poultry products.
    Unfortunately, impacts such as this are an unavoidable consequence 
of sequestration, and that is why the President urges the Congress to 
act promptly to avoid these devastating cuts.
    Question. Mr. Werfel, as you mention in your testimony, most of the 
cuts required in sequestration affect discretionary programs, however, 
some of the cuts do affect mandatory programs, such as those authorized 
in the farm bill. According to OMB's congressionally mandated report on 
sequestration, the Commodity Credit Corporation (CCC) at USDA, which 
funds many mandatory farm programs, will be subject to a cut of $469 
million. You point out that the Federal Government has a responsibility 
to execute core mission areas on behalf of the American people and take 
all appropriate steps to protect this mission to the greatest extent 
possible. For USDA, ensuring the farm safety net is reliable for our 
producers is certainly a key mission, so for farmers who are signing up 
for farm programs, have you provided any guidance as to how USDA should 
ensure its legal agreements with farmers are honored?
    Answer. OMB issued multiple memoranda to agencies to help provide 
guidance and clarity on implementing sequestration. In providing this 
guidance, OMB advised agencies to engage in rigorous planning efforts 
to determine how to implement sequestration while protecting the 
agency's mission to serve the American people to the greatest extent 
possible. As appropriate, OMB and agencies discussed legal issues 
concerning sequestration. Each agency is responsible for how it will 
implement the cuts required by sequestration and I would refer you to 
USDA for specific information regarding CCC.
    Question. In North Dakota, two-thirds of the 36 critical access 
hospitals were operating in negative margins in 2012. The net operating 
margin across all these 36 hospital last year was a negative $6.5 
million. The financially tenuous state of these hospitals points to the 
challenge of operating an all-service hospital in a rural and super-
rural area with an unfavorable payer mix, which is the environment of 
much of rural North Dakota. According to the conservative estimates of 
the leadership at these hospitals, the loss per hospital due to 
sequestration will be approximately $138,000; but, when an operating 
margin at best might be $10,000 for the year, for those hospitals not 
operating in the red, that is no small impact. Critical access 
hospitals serve a vital role in rural America and across my home State 
of North Dakota. What is your plan to mitigate the impact of 
sequestration on critical access hospitals in order to ensure that 
access is still available in these communities?
    Answer. Sequestration will lead to a number of deeply troubling and 
harmful impacts across critical Government programs. No amount of 
mitigation can prevent cuts of this magnitude from presenting 
significant and harmful effects. For this reason, the President 
continues to call on the Congress to enact balanced deficit reduction 
and avoid sequestration.
    Each agency is responsible for how it will implement the cuts 
required by sequestration, and I would refer you to the Department of 
Health and Human Services for specific information on how sequestration 
would impact hospitals.
                                 ______
                                 
                Questions Submitted to Janet Napolitano
            Questions Submitted by Senator Mary L. Landrieu
department of homeland security cybersecurity--risk to federal computer 
                                systems
    Question. In fiscal year 2012, the Department of Homeland Security 
(DHS) handled 161,500 cybersecurity incident reports, up from 106,000 
in fiscal year 2011, and issued 8,000 cybersecurity alerts and 
information products, up from 5,200 in fiscal year 2011. President 
Obama has declared that, ``. . . the cyber threat is one of the most 
serious economic and national security challenges we face as a 
Nation''. In a constrained budget year, the fiscal year 2013 DHS budget 
proposed a substantial increase of 74 percent in cybersecurity funding 
to protect Federal systems and to support State and local governments 
and the private sector. This threat is real and it needs to be 
addressed with robust resources.
    You have testified that securing our Federal networks will be 
delayed under sequestration. Specifically, what impact will 
sequestration have on securing our Federal networks?
    Answer. Sequester reductions would require the National Protection 
and Programs Directorate (NPPD) to scale back its development of 
critical capabilities for the defense of Federal cyber networks. Full 
deployment of the National Cybersecurity Protection System (NCPS) 
intrusion prevention system, known as E3A, will be delayed from fiscal 
year 2015 to fiscal year 2016. In addition, the reductions would reduce 
NPPD's ability to detect, analyze, and build capabilities into NCPS to 
respond to emerging cyber threats.
    Deployment of a cyber diagnostics capability for the 118 Federal 
agencies will also be affected. Reduced funding will result in the 
ability to cover an estimated 7-percent fewer devices, leaving 
Departments and agencies less protected. Also, some features of a 
Federal dashboard that leverages the cyber diagnostics data to enable 
managing risk across the interagency will be delayed until at least 
fiscal year 2014.
    In addition, sequestration will disrupt long-term efforts to build 
a qualified cybersecurity workforce, leaving 20 percent of the U.S. 
Computer Emergency Readiness Team's (US-CERT) planned workforce 
positions vacant. This will limit the overall technical expertise of 
US-CERT's analytic staff and decrease the speed to which DHS can 
respond to cyber incidents.
    Question. When State and local governments and the private sector 
look to DHS for technical assistance and information in securing their 
systems, will DHS be able to deliver?
    Answer. NPPD would still strive to continue to deliver critical 
technical assistance and information to its Federal, State, local, 
tribal, private sector, and international partners. However, the 
sequester reductions would limit ongoing collaboration and information-
sharing efforts.
    Sequestration would result in cancelling the fiscal year 2013 
cyberstorm exercise. The exercise is the Nation's premiere and largest 
cyber exercise and encompasses more than 20 States, 100 industry 
partners, 20 Federal departments and agencies, and 13 nations.
    In addition, a sequestration would require NPPD to reduce funding 
for the National Vulnerability Database (NVD). Reduced funding will 
impact the Department's ability to host, maintain, and enhance the NVD. 
This database provides analysts and users of the system with 
information related to computer vulnerabilities, security checklists, 
and patch sites. This reduction would hinder critical infrastructure 
owners' and operators' efforts to find and fix vulnerabilities existing 
on their critical systems, thus making U.S. critical infrastructure 
more vulnerable to exploitation or attack.
    NPPD would also conduct fewer onsite risk assessments with 
industrial control systems (ICS) partners and would cancel plans to 
make ICS security trainings available to its partners online. This 
change would be a reduction of 18 from the planned 75 Cyber Resilience 
Reviews that identify specific cybersecurity management strengths, 
weaknesses, and areas for improvement.
  federal emergency management agency disaster relief fund--impact on 
                                recovery
    Question. The Congress just provided $11.5 billion in needed 
Federal Emergency Management Agency (FEMA) funding for response and 
recovery to Hurricane Sandy and other ongoing disasters. The Congress 
just provided more than $50 billion of critical relief for the victims 
of Hurricane Sandy, including $11.5 billion for the FEMA Disaster 
Relief Fund (DRF), $16 billion for community rebuilding grants and more 
than $10 billion for transit repairs. It is my understanding that the 
sequester would rescind more than $2.5 billion of this funding, just as 
communities are making their long-term rebuilding plan. There were 47 
Presidentially declared disasters in 2012, including Hurricane Sandy, 
which the National Hurricane Center estimates to be the second-
costliest disaster in recent history, after Hurricane Katrina. In 2011, 
there were an unprecedented 99 Presidentially declared disasters. Every 
State in the Nation has pending disaster recovery projects with FEMA.
    You have testified that sequestration will reduce the total amount 
available in the FEMA DRF to help rebuild communities by $1 billion. Is 
it true that a sequester of $1 billion could result in FEMA having to 
shut down the disaster rebuilding process for Hurricane Sandy and other 
disasters across the Nation as early as August of this year?
    Answer. Under sequestration, reductions to the DRF could result in 
FEMA having to shut down the disaster rebuilding process for Hurricane 
Sandy and other disasters across the Nation. However, given that many 
months remain in the fiscal year, it is difficult to precisely project 
at this time when the imposition of Immediate Needs Funding (INF) 
restrictions could be necessary if sequestration occurs. 
Notwithstanding current DRF estimates, which are subject to change, 
sequestration could require FEMA to implement INF restrictions during 
hurricane season as a result of costs related to no-notice events, 
accelerated spending tied to new Stafford Act authorities included in 
the supplemental, the alignment of Hurricane Sandy projects across 
Federal agencies and required funding sources, and lower than projected 
recoveries.
    If INF were implemented, funding to recover from past disasters 
(including Hurricane Sandy) and respond to and recover from future 
disasters, as well as all related activities, would be curtailed and 
would result in delays in the disaster rebuilding process.
sequester--growing the economy by enhancing travel to the united states
    Question. In January 2012, President Obama announced a major 
initiative to increase travel to the United States. Increasing the 
number of international travelers to the United States has a direct 
economic impact, including job creation. I want to grow the economy and 
create jobs. One way to do this is to enhance travel to the United 
States. Visitors to the United States often have to wait 1 hour to go 
through customs and I fear that if they have to wait much longer they 
will stop bringing their business to the United States.
    What would be the impact of sequestration on wait times for 
travelers entering our country through our air and land ports of entry?
    Answer. The automatic budget reduction mandated by sequestration 
would be disruptive and destructive to our Nation's economy.
    At major international airports, average wait times to clear 
customs will increase by 50 percent. Reduced Customs and Border 
Protection (CBP) staffing would make 4- to 5-hour wait times 
commonplace. Such delays could cause thousands of missed passenger 
connections daily with economic consequences at both the local and 
national levels.
    And on the Southwest Border, our biggest land ports could face wait 
times of 5 hours or more, functionally closing these ports during core 
hours.
    Question. How will sequestration impact wait times for passengers 
going through Transportation Security Administration (TSA) checkpoints 
at our Nation's airports?
    Answer. Sequestration will affect our ability to process passengers 
through TSA checkpoints, and wait times would increase, particularly 
during peak travel periods.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
    Question. According to the Federal Bureau of Investigation, New 
Jersey is home to the most at-risk area for a terrorist attack in the 
United States. An attack in this area could impact 12 million people 
who live nearby. Department of Homeland Security personnel--including 
the United States Coast Guard (USCG), Customs and Border Protection 
(CBP), and Transportation Security Administration--play a critical role 
in protecting this region. How would sequestration cuts impact the 
Department's efforts to protect high-risk areas?
    Answer. Threats from terrorism and the need to respond and recover 
from natural disasters will not diminish because of budget cuts. Even 
in this current fiscal climate, we do not have the luxury of making 
significant reductions to our capabilities without placing our nation 
at risk.
    CBP would have to furlough all of its employees and reduce 
overtime, decreasing the number of equivalent work-hours by thousands 
of CBP agents and officers.
    USCG's sequestration plans reduce planned operations by up to 25 
percent less than current levels. Regarding New Jersey ports--Coast 
Guard operations in these ports might be scaled as follows:
  --Screening of vessels arriving from overseas may be reduced by 20 
        percent;
  --Port facilities inspections could fall by 10-20 percent;
  --Inspections of domestic commercial fleet could be reduced by as 
        much as 20 percent;
  --Security patrols of key resources and critical infrastructure may 
        fall by 10-15 percent;
  --And security escorts of high-capacity passenger vessels and 
        hazardous cargos may be reduced by at least 20 percent.
    Federal Emergency Management Agency (FEMA) provides State and local 
grants to protect high-risk areas through a number of programs, 
including the Urban Areas Security Initiative (UASI) grant program. 
Following sequestration, State and local homeland security grant 
funding would also be reduced, potentially leading to layoffs of 
emergency personnel and first responders. Preparedness grants, 
including the State Homeland Security Grant Program and UASI Grant 
Program, the Assistance to Firefighters Grant Program, and Emergency 
Management Performance Grant Program would face funding cuts.
    Vital assistance for State and local law enforcement efforts--such 
as training, technical assistance, security clearances, and 
connectivity to Federal systems and technologies--could all be scaled 
back under sequestration.
                                 ______
                                 
                Questions Submitted by Senator Tom Udall
    Question. New Mexico shares 180 miles of border with Mexico. You 
have stated that if sequestration goes into effect staffing cuts will 
have to be made to Customs and Border Patrol (CBP) and Immigration and 
Customs Enforcement (ICE).
    Do you believe sequestration cuts will jeopardize the gains made in 
the fight against drug smuggling and human trafficking? How concerned 
should border States and communities be about this?
    Answer. Sequestration would negatively affect the mission readiness 
and capabilities of the men and women on our front lines, and it would 
undermine the significant progress the Department of Homeland Security 
(DHS) has made over the past 10 years to build the Nation's 
preparedness and resiliency. It would negatively reduce the resources 
that we are able to devote to areas such as drug smuggling and human 
trafficking.
    As I stated in my testimony, the impact of sequestration would be 
disruptive and destructive to DHS, its missions, and our Nation's 
security and economy. More specifically, sequestration would hinder 
border security, increase wait times at our Nation's land ports of 
entry and airports, affect aviation and maritime safety and security, 
leave critical infrastructure more vulnerable to attacks, hamper 
disaster response time and our surge force capabilities, and 
significantly delay cyber-security infrastructure protections.
    Sequestration would reduce ICE Homeland Security Investigations' 
(HSI's) ability to conduct key criminal investigations. Due to the 
funding level under sequestration, HSI must limit hiring and 
significantly reduce general expense spending affecting its ability to 
pursue enforcement actions (e.g., arrests, seizures, indictments, etc.) 
to target child predators, human smugglers and traffickers, drug 
smugglers and those smuggling dual use and weapons technologies to 
countries that sponsor terrorism. HSI would also be required to reduce 
Federal and State wire intercepts, travel in pursuit of investigations 
and mission critical training, purchase of information and purchase of 
evidence from confidential sources of information and suspects to 
support undercover operations.
    Under sequestration, CBP would have to furlough all of its 
employees and reduce overtime, decreasing the number of equivalent 
work-hours by thousands of CBP agents and officers. Sequestration will 
affect CBP's ability to apprehend illegal aliens and seize illegal 
contraband.
    USCG is also involved in countering illegal drug trafficking and 
migrant interdiction. USCG would have to curtail its air and surface 
operations by up to 25 percent, reducing its patrols of the 3.4 million 
square mile U.S. Exclusive Economic Zone.
                                 ______
                                 
               Question Submitted by Senator Mark Begich
    Question. Please elaborate on the expected decrease in Arctic 
operations by the United States Coast Guard due to sequestration.
    Answer. If sequestration takes effect, there will be a reduction of 
surface (cutters and boats) and air assets (helicopters and airplanes) 
that operate in the Arctic. Sequestration would result in a reduction 
of up to 90 patrol days of major cutter (flight deck equipped and 
capable of operating the harsh Arctic environment) or Polar Icebreaker 
capacity in support of Northern Slope Arctic Operations or support of 
Arctic Science missions conducted with our interagency partners.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
    Question. Please explain how sequestration or a year-long 
continuing resolution could affect the U.S. Coast Guard's (USCG) 
ability to recapitalize its aging fleet of ships and aircraft. What 
could be the real-life consequences on USCG's ability to perform its 
coastal and riverine missions?
    Answer. Unless adjustments are made, enactment of a year-long 
continuing resolution could be very problematic for USCG's ability to 
recapitalize its assets in a timely manner. The administration has 
requested an anomaly to ensure that correct funding levels are provided 
for each of USCG's Acquisitions, Construction, and Improvements sub-
appropriations subaccounts to support planned recapitalization in 
fiscal year 2013. Otherwise, for example, there would be insufficient 
funding in the ``Vessels'' sub-appropriation to acquire the sixth 
National Security Cutter and additional Fast Response Cutters as 
requested in the fiscal year 2013 President's budget.
    If sequestration takes effect, USCG would reduce operations 
(surface and air asset capacity); defer asset maintenance; stop some 
discretionary civilian workforce benefits (awards, discretionary 
overtime, maintain existing hiring freezes); defer training; and cut 
programmatic and travel funding. These reductions would impact USCG 
missions in all operating areas (e.g., offshore, coastal, inland 
waterways, and the Arctic). A real-life consequence of these decreases 
would be reduced drug and migrant interdiction, fewer safety and 
security patrols and vessel escorts security, and delays to repairs and 
maintenance of Aids to Navigations.
    Question. Information technology (IT) spending accounts for 
approximately 2 percent of the budget and is growing. The Department of 
Homeland Security (DHS) has received recognition for its data center 
consolidation efforts due to the cost and management efficiencies that 
have been gained and the amount of money that will be saved over time. 
Do you think other agencies can replicate work similar to DHS's in IT 
to generate savings across the Government?
    Answer. The DHS experience of creating two designated Enterprise 
Data Centers to locate and consolidate DHS legacy systems/data centers 
is unique. However, the outcome of consolidating, downsizing, and 
updating legacy systems to a smaller, more efficient footprint while 
emphasizing modernization and cloud services is certainly replicable. 
DHS took the strong step to seek an appropriation and centralize 
consolidation-specific funding to encourage its component agencies to 
expedite consolidation projects. While this requires an initial 
investment of funds for the efforts, it helped create an atmosphere of 
cooperation among the stakeholders. DHS' data center migration 
activities have also led to a number of business innovations in the 
Department, including:
  --funding efficiencies--a DHS centrally coordinated migration fund to 
        enhance Component migration efforts;
  --procurement efficiencies--Contract Line Item Number (CLIN) bundling 
        and more effective vendor coordination; and
  --IT infrastructure and operational efficiencies--using the 
        consolidation effort as an opportunity to consolidate and 
        upgrade systems and move toward establishing the DHS Private 
        Cloud.
    DHS shares its consolidation successes and lessons learned with 
other agencies through participation in the Federal Chief Information 
Officer (CIO) Data Center Consolidation Task Force. DHS CIO Richard 
Spires initially co-chaired the Task Force which comprises data center 
program managers, facilities managers, and sustainability officers from 
24 agencies that work together to share progress toward individual 
agency goals. The Task Force serves as a ``community of practice'' for 
agency CIOs and data center program managers to share best practices 
and enhance consolidation effectiveness.
                                 ______
                                 
              Questions Submitted by Senator Daniel Coats
    Question. In your testimony on the impact of the sequester you 
indicated that Immigration and Customs Enforcement (ICE) will not be 
able to maintain the required number of detention beds for the most 
dangerous criminal aliens. This raises a number of concerns and 
questions:
    Do you anticipate the need to release criminal aliens from 
detention given the inability to maintain 34,000 detention beds?
    Answer. ICE will continue to manage its detention population in 
order to ensure it can operate within the appropriations level provided 
by the Congress in the Consolidated and Further Appropriations Act, 
2013, and in consideration of reductions required by sequestration. To 
the extent that ICE is unable to maintain 34,000 detention beds with 
the funding provided, it will focus its detention capabilities on 
priority and mandatory detainees, including individuals who pose a 
danger to national security or a risk to public safety, including 
aliens convicted of serious crimes, with particular emphasis on violent 
criminals, felons, and repeat offenders. ICE will place low-risk, 
nonmandatory detainees in lower cost, parole-like alternatives to 
detention programs, which may include electronic monitoring and 
intensive supervision.
    Question. If you are forced to release criminal aliens from 
custody--what process will you undertake to ensure the most dangerous 
are kept in detention? Will those who are released be placed into other 
ICE programs such as Alternatives to Detention (ATD)?
    Answer. ICE does not anticipate that it will be forced to release 
dangerous criminal aliens as a result of sequestration. In the event 
that ICE reduces detention levels as a result of sequestration, it will 
take careful steps to ensure that public safety is not impacted. All 
release decisions will be made by career law enforcement officials 
following a careful examination of each individual's criminal and 
immigration history, ensuring that priority and mandatory detainees 
remain in detention. Any individual released would be placed on an 
alternative form of supervision and all released individuals would 
remain in removal proceedings.
    Question. What additional impact from the sequester do you 
anticipate for ATD and its ability to effectively monitor individuals 
on the nondetained docket?
    Answer. Under sequestration, ICE will continue to both maintain the 
ATD program and effectively monitor individuals on the nondetained 
docket.
                                 ______
                                 
               Questions Submitted by Senator Jerry Moran
                 national bio and agro-defense facility
    Question. In September 2012, Secretary Napolitano testified before 
the Senate Homeland Security and Government Affairs Committee that 
``this country needs a bio level-4 facility'' to assess animal disease 
and other dangerous pathogens. Secretary Napolitano said ``it's an 
essential part of our security apparatus.'' The country needs this 
national security asset. Questions remain that the Department of 
Homeland Security (DHS) needs to address about the future of the 
National Bio and Agro-Defense Facility. DHS gave every indication a 
construction contract would be awarded in January, but failed to 
deliver without explanation. Why did this not happen? Current bids for 
constructing the CUP expire at the end of February, 13 days from now. 
What will happen should the deadline pass? Finally, the fiscal year 
2011 appropriation of $40 million for Central Utility Plant (CUP) 
construction could be in jeopardy if the contract is not executed soon. 
Will a contract be signed to begin construction on the CUP?
    Answer. DHS awarded and signed the CUP construction contract on 
February 21, 2013.
                                 ______
                                 
                  Questions Submitted to Ashton Carter
               Question Submitted by Senator Patty Murray
            cuts to the department of defense/mental health
    Question. Deputy Secretary Carter has testified to the many serious 
impacts sequestration will have on the Department of Defense (DOD). 
There is wide agreement that sequestration is not the best way to find 
budget savings in the DOD, but there is a serious need to find savings 
across the Federal Government. As the Deputy Secretary said earlier 
this week, DOD must do its part in resolving these fiscal challenges. 
Certainly these reductions must be made carefully. The rates of suicide 
across the services are both unprecedented and unacceptable. What 
effects will sequestration have on the Department's ability to provide 
mental healthcare and combat suicide?
    Answer. As we work to address the impact of sequestration within 
the Military Health System, our focus will remain on providing 
exceptional, accessible care to all beneficiaries. We will do all we 
can to continue to provide high-quality mental healthcare, to continue 
and enhance efforts to combat suicide, and to minimize disruption to 
servicemembers receiving or seeking care--but sequestration will almost 
certainly challenge our ability to do so to the fullest extent our 
servicemembers and their families deserve.
                                 ______
                                 
             Question Submitted by Senator Dianne Feinstein
                        intelligence activities
    Question. Deputy Secretary Carter, the majority of Intelligence 
Community (IC) spending goes to agencies that are part of the 
Department of Defense (DOD) (e.g., National Security Agency, National 
Geospatial-Intelligence Agency, National Reconnaissance Office, Defense 
Intelligence Agency, and the military service intelligence agencies). 
The way the Department implements sequestration, therefore, has a major 
impact on our intelligence capabilities.
    I understand that Director of National Intelligence (DNI) James R. 
Clapper has written a letter to the Department of Defense regarding 
DOD's implementation of sequestration. In particular, according to news 
reports, the DNI believes that the decision to furlough civilian DOD 
personnel to the maximum extent allowed under law should not be applied 
to intelligence personnel funded out of the National Intelligence 
Program, and especially not without the approval of the DNI. Have the 
DNI and the Secretary of Defense reached an agreement on how to handle 
IC personnel under sequestration? If not, will you agree to ensure that 
the Department implements sequestration in a way that has the agreement 
of the DNI?
    Answer. Yes, an agreement has been reached. The Defense Department 
will ensure alignment with DNI Clapper on how to handle IC personnel 
and mission under sequestration.

                         CONCLUSION OF HEARING

    Chairwoman Mikulski. The committee stands in recess, 
subject to the call of the Chair.
    Thank you very much.
    [Whereupon, at 12:38 p.m., Thursday, February 14, the 
hearing was concluded, and the committee was recessed, to 
reconvene subject to the call of the Chair.]


              MATERIAL SUBMITTED SUBSEQUENT TO THE HEARING

    [Clerk's Note.--The following testimonies were received 
subsequent to the hearing for inclusion in the record.]
                 Prepared Statement of Feeding America
    Chairwoman Mikulski, Ranking Member Shelby, and members of the 
Senate Committee on Appropriations, thank you for the opportunity to 
submit this statement for the record on behalf of Feeding America and 
for holding this hearing.
    Feeding America is the Nation's leading domestic hunger-relief 
charity with a network of more than 200 food banks serving all 50 
States through more than 61,000 local food assistance agencies. Feeding 
America food banks, as well as food pantries, soup kitchens and other 
assistance agencies, rely on a variety of public and private funding 
streams to feed 37 million Americans a year, including 14 million 
children and nearly 3 million seniors.
    Nationally unemployment remains significantly elevated at 7.9 
percent, nearly 40 percent of those who are unemployed have been 
unemployed for 27 weeks or longer, and millions more families are 
scraping by on fewer hours or with one family income when there used to 
be two. Poverty and food insecurity are higher than ever and while our 
economy is recovering, millions of low-income families are still 
struggling to get by. Food banks across the Nation are stretched thin 
serving more people while donations and critical food sources have 
tightened.
    For those individuals facing food insecurity, the Nation's Federal 
food assistance programs and emergency food providers provide a 
critical safety net. Nearly 46 million Americans participate in the 
Supplemental Nutrition Assistance Program (SNAP), formerly known as 
food stamps. In addition, the Commodity Supplemental Food Program 
(CSFP) is providing nutritious monthly food boxes to a caseload of more 
than 595,137 people, more than 97 percent of them low-income seniors. 
Moreover, the Emergency Food Assistance Program (TEFAP) is providing 
more than $350 million worth of nutritious, American-grown commodities 
through mandatory and section 32 funds that helps food banks purchase 
foods.
    As the committee hears testimony regarding the impacts of 
sequestration, Feeding America respectfully offers insight on how 
sequestration would affect TEFAP administrative (storage and 
distribution) Funds, the Women, Infants and Children Nutrition Program 
(WIC), Senior Meals, and the Emergency Food and Shelter Program which 
provide meals to millions of Americans we serve who are at risk of 
hunger.
       the emergency food assistance program administrative funds
    TEFAP is a means-tested Federal program that provides nutritious 
food commodities to low-income Americans in need of short-term hunger 
relief. TEFAP commodities are distributed through organizations like 
food banks, pantries, soup kitchens, and emergency shelters. 
Historically, they have provided about 25-28 percent of the food 
distributed by our food banks. Last year, TEFAP food accounted for 17.3 
percent of the food distributed by Feeding America, down from 28 
percent in fiscal year 2011.
    Unfortunately, the need for emergency food assistance has outpaced 
supply, in part because of sharp declines in TEFAP bonus commodities. 
These declines in TEFAP bonus commodity purchases have hit our food 
banks hard, significantly reducing the amount of food they have 
available for clients. This decrease has been mitigated by increased 
donations through our retail store donation program and through 
increased food purchases by food banks. While the increased donations 
from our retail partners are welcome, they have drastically increased 
our operational costs. Retail donations are one of our most expensive 
food streams, costing on average $0.24 a pound in capacity costs to 
store and deliver the food. In comparison, the cost to store and 
distribute TEFAP foods is defrayed in part by the appropriation of 
TEFAP administrative funds. TEFAP administrative funds are authorized 
by the farm bill at $100 million a year, although unfortunately the 
annual appropriation has been much lower, around $49 million. These 
funds are subject to the 5-percent reduction under sequestration, which 
would be an approximately $2.45 million cut for fiscal year 2013. 
Providing the mandatory funding level for TEFAP commodities in addition 
to fully funding the authorized amount of $100 million for TEFAP 
administrative funds is critical if our emergency feeding agencies are 
to serve the growing numbers of people coming to them for help.
    Food banks are struggling to respond to a significant increase in 
demand that is likely to continue for some time. Without adequate 
Federal assistance, they will be unable to afford the rising costs 
associated with storing and distributing emergency food commodities. 
While the increase in TEFAP products that require refrigeration or 
freezer capacity has been a welcome addition for clients, these 
products are more costly to store and deliver across large service 
areas. Compounding these challenges are rising fuel costs that in some 
cases have nearly doubled transportation and delivery costs. It would 
be unfortunate if local and emergency feeding agencies had to reduce 
client distributions due to a lack of funding to safely store and 
distribute those foods.
    TEFAP administrative funds are critical to helping our food banks 
defray the costs of storing, transporting, and distributing TEFAP 
commodities, particularly in hard-to-serve rural and geographically 
remote areas. With food banks already struggling to respond to a 
sustained increase in demand, they can no longer afford the rising 
costs associated with storing and distributing emergency food if 
sequestration goes into effect.
             women, infants, and children nutrition program
    WIC provides nutritious foods, nutrition education, and access to 
healthcare for millions of low-income pregnant women, new mothers, 
infants, and children up to age 5 who are at nutritional risk. Current 
WIC resources are scarce. Clinics already stretch WIC dollars. WIC 
agencies have consolidated, closing clinics, laying off staff, and 
reducing service hours, which negatively affects nutrition education 
and breastfeeding support. WIC is susceptible to a 5.1-percent cut 
should sequestration run the full term of the remainder of the current 
fiscal year. Approximately 600,000 women and children would be dropped 
from WIC. At least 1,600 WIC-related jobs will be cut, as well as 
several WIC sites closed.
    Feeding America is extremely concerned about the cuts to the WIC 
program. Many of our clients are also relying on WIC for the nutrition 
they need, and any cuts to WIC or other Federal nutrition programs will 
increase demand at food banks, and food banks will not be able to meet 
the added demand.
                              senior meals
    The prevalence of food insecurity among older adults can have 
serious health consequences. Food insecure seniors are more likely to 
have lower intakes of major vitamins, significantly more likely to be 
in poor or fair health, and more likely to have limitations in 
activities of daily living.
    With so many seniors facing mobility challenges that make it 
difficult for them to do their own grocery shopping, home-delivered 
meal programs connect seniors with the nutritional foods they need. For 
a majority of participants in Meals on Wheels, home-delivered meals 
account for 50 percent or more of their daily food. These meals 
contribute to the overall health and well-being of participating 
seniors, including those with chronic illnesses that are affected by 
diet, such as diabetes and heart disease, and frail seniors who are 
homebound. The cost of feeding a senior for 1 year through Meals on 
Wheels is roughly equal to the cost of just 1 day in the hospital.
    Home-delivered meals also help seniors live independently and 
remain in their homes and communities. Low-income seniors on fixed 
incomes must sometimes make difficult choices between important 
necessities. Among Feeding America food bank client households with 
seniors, 29.6 percent reported choosing between paying for food and 
paying for medical care. Additionally, 34.9 percent reported choosing 
between food and utilities, and 26 percent reported choosing between 
food and gas for a car. Under sequestration, the Meals on Wheels 
Association of America estimates that senior feeding programs like 
Meals on Wheels and congregate feeding programs would be able to serve 
19 million fewer meals to vulnerable seniors.
                   emergency food and shelter program
    The Emergency Food and Shelter Program provides immediate relief to 
communities impacted by unemployment and poverty and plays a crucial 
role in helping families back on their feet. The average annual 
appropriation of $100 million is used for mass shelter, mass feeding, 
food distribution through food pantries and food banks, 1 month utility 
payments to prevent service cut-offs, and 1 month rent/mortgage 
assistance to prevent evictions or assist people leaving shelters to 
establish stable living conditions. These funds are subject to a 5.2-
percent reduction under sequestration, which will also hurt our food 
banks and reduce the funding they have to purchase and distribute food.
                               conclusion
    We greatly appreciate the opportunity to submit testimony today on 
behalf of Feeding America, our more than 200 member food banks, and the 
37 million Americans our network feeds each year. For these growing 
numbers of Americans, food banks are truly the first line of defense, 
and many times the only resource standing between them being able to 
put food on the family dinner table or going to bed with an empty 
stomach. However, our food banks and the charitable food assistance 
network cannot meet the needs of these families alone. It is only 
through our public-private partnership with Federal Government through 
programs like TEFAP, CSFP, the Emergency Food and Shelter Program, and 
sustained support for SNAP and other programs in the nutrition safety 
net that we can make real strides in the fight against hunger. These 
programs have historically enjoyed broad bipartisan support and have 
been protected in previous deficit reduction agreements. While we 
understand the need to address the deficit, we urge the Congress not to 
let sequester go into effect and to find a balanced approach to ensure 
that struggling low-income families are protected.
                                 ______
                                 
                  Prepared Statement of the Zuni Tribe
    The Zuni Tribe is presenting its testimonial statement to bring to 
the committee's attention the already prevailing disparities in health, 
education, public safety, and socioeconomic development endeavors (in 
comparison to the rest of the Nation) that exists and will continue to 
escalate with the March 1, 2013 sequestration. Vast disparities 
continue to exist in a wide variety of socioeconomic areas; the Zuni 
people rank well below the national average in measures of healthcare, 
education, income, housing, and public safety. Furthermore, basic 
infrastructure, including clean drinking water, safe roads, and 
telecommunications are woefully inadequate or sorely missing. These 
disparities create serious barriers and inhibit or prevent meaningful 
economic development on the Zuni Indian Reservation.
    The Zuni Tribe understands the United States' fiscal difficulties 
and challenges at this time and acknowledges that the administration 
and the Congress is focused on reducing the deficit; however, the Zuni 
Tribe is requesting they keep their promise to Indian tribes by 
protecting and hold harmless funds that need to be appropriated to the 
Native American Indian tribes--particularly the Zuni Tribe. Protecting 
the tribes from the devastating actions will allow Zuni Tribe to be 
full partners toward a better and sound fiscal path as they continue 
efforts toward socioeconomic recoveries.
    As the March 1, 2013 budget sequestration unfolds, The Zuni Tribe 
believes it is important that the committee be mindful and be guided by 
the fact that the United States owes a unique legal obligation and 
trust responsibility to the Zuni Tribe based on services by the Federal 
Government. As stated, this solemn obligation is carried out through 
the many Federal programs operated throughout the Federal Government, 
which, when not properly funded, results in a diminution of the Federal 
trust responsibility.
    Estimated fund reductions slated for the Zuni Tribe range from 5 to 
9 percent of the fiscal year 2012 base funding. This action will have a 
devastating impact on the Zuni Tribe. Injurious impacts include a rise 
in a prevailing depressed unemployment in the community. Furthermore, 
fund reductions at the various Federal agencies that have direct 
Government-to-government relationship with the Zuni Tribe will also 
continue to have rippling and crippling impact on the Zuni Tribe's 
effort toward self-sufficiency. The relationships range from providing 
a variety of programs and services, be it through contracting with the 
Federal Government through the authorities of Public Law 93-638 or 
direct services by the Federal Government.
    Self-Determination.--Pre Public Law 93-638, Indian Self 
Determination and Education Assistance Act, the Zuni Tribe, Pueblo of 
Zuni, acting on a commitment for success, contracted with the Bureau of 
Indian Affairs (BIA) within the Department of the Interior and Indian 
Health Service (IHS) within the Department of Health and Human Services 
(HHS) to perform functions previously carried out by the Federal 
Government. Namely these functions/programs with the BIA are:
  --Housing improvement;
  --Law enforcement;
  --Detention center;
  --Tribal courts;
  --Higher education--scholarship; and
  --Road maintenance and social services/welfare assistance.
    Performances of these functions by the tribe were initially 
authorized under the authorities of the 1934 Indian Reorganization Act 
with the promise of self-determination to operate programs fitting 
tribal needs. However, since the 1970s the Zuni Tribe has experienced 
drastic fund reductions in these contracted and other programs still 
administered/operated by the BIA.
    With the IHS programs the Zuni Tribe has contractual relationships 
in administering the following programs:
  --Audiology;
  --Otitis media;
  --Client services;
  --Safety and injury prevention program;
  --Optical;
  --Community health representatives;
  --Public health nurse for the detention center;
  --Alcohol/substance abuse prevention/intervention center; and
  --Wellness center.
    These programs, along with the IHS Service Unit work with the Zuni 
tribal community in addressing healthcare needs of the community. Like 
the BIA funding, the IHS programs have experienced drastic reductions 
in the programs. These reductions do not allow the tribe to adequately 
address the spiraling diabetes, kidney, heart, and cancer problems of 
the community. Furthermore, when hospitals and health centers fund 
reductions are made and inadequate funds are not available to staff 
specialized medical services, patients have to be transported to other 
facilities that would take care of the specialized needs. These actions 
increase healthcare cost in contract healthcare service areas.
    There are other HHS programs such Head Start, the Women, Infant and 
Children's program and the healthy lifestyle programs for the community 
and the schools, however with the limited-woeful funds provided the 
devastating effect of prevalent health problems are not adequately 
addressed. Any further reductions to the above named programs when the 
sequester is applied would only enhance and escalate the problems of 
the Zuni tribal community. By no means would the Zuni Tribe be on the 
healing path to healthy lifestyles, economic self-determination, self-
sufficiency, and prosperity.
    Furthermore, a critical component of the self-determination 
contracting policy is the United States' obligation to provide the full 
amount of funding to a tribe that the United States would have if it 
were to continue to operate the program, including the administrative 
costs associated with operating a Federal program. These administrative 
costs, known as ``Contract Support Costs'', include items such as 
auditing, accounting, and insurance. The Federal Government's 
obligation to fully fund Contract Support Costs has been confirmed in 
no less than three Supreme Court decisions. See, Cherokee v. Leavitt, 
543 U.S. 631 (2005); Salazar v. Ramah Navajo Chapter, 132 S. Ct. 2181 
(2012) and Arctic Slope Native Ass'n., Ltd. v. Sebelius, 133 S. Ct. 22 
(2012). The Zuni Tribe request the committee's support and provide full 
funding of contract support and indirect cost without eroding base 
funding for Public Law 93-638 contracted programs and other Federal 
agency programs that have a Government-to government relationship with 
the Zuni Tribe.
    Economic Development.--The Zuni Tribe continues to face challenges 
of high unemployment due to lack of economic development on the Zuni 
Reservation. The tribe is not a ``gaming'' tribe. Lack of 
infrastructure inhibits economic development and growth; these are 
adequate transportation systems, railroads, airports, and adequate 
quality water supply. These are basic and primary to attracting and 
developing either commercial development or entrepreneurial efforts on 
the Reservation. The tribe believes that sustainable economic 
development is the best pathway to healthy and vital tribal communities 
and will help them overcome many of the challenges the tribe faces.
    The Zuni Tribe request continued support for funding the BIA Loan 
Guaranty Program within the BIA and the Native American Community 
Development Financial Institutions program within the Departments of 
Agriculture and the Treasury on the relending programs. These programs 
are, in many cases, the only source of capital for tribal and 
individual Indian economic development projects.
    In addition, energy development on tribal lands offers significant 
opportunities to enhance and grow tribal economies. Accordingly, the 
tribe requests the committee to provide funds for programs within both 
the Departments of the Interior and Energy that will encourage and 
support tribal capacity and project development in the area of clean 
energy development, whether it's solar or wind energy funding.
    Tribal Public Safety and Justice Programs.--The United States has 
distinct legal obligations to provide public safety in Indian country. 
The Major Crimes Act codified the United States' responsibility to 
investigate and prosecute most crimes committed on Indian lands. See, 
18 U.S.C. 1152, 1152. Yet, the rates of serious crime within the Zuni 
community are close to exceeding that of major metropolitan 
communities.
    While lack of funding may not be the only cause of the current 
state of public safety on the Zuni Reservation; it is a significant 
contributing factor. It is impossible to have a safe community when 
there are only a few officers patrolling the 747 square mile 
reservation. This is another reason the Zuni Tribe has been requesting 
funding every year in the President's budget request to fund 
Conservation Law Enforcement Officer who would enforce law and order 
outside the immediate community covering the reservation-wide area 
where most of the illegal activities occur. Illegal activities include 
human trafficking, alcohol bootlegging, illicit drug trade, theft and 
destruction of sacred cultural artifacts at protected sites.
    The Zuni Tribe requests the committee support sufficient funding in 
both the BIA and the Department of Justice that will enhance public 
safety programs across Indian country-especially Zuni; including 
Detention Centers, along with the Violence Against Women Act programs--
the legislation which has been recently enacted.
    Furthermore, tribal court systems are an integral part of the 
justice system. The Zuni tribal court was one of the original contracts 
in the early 1960s with the BIA. Throughout the years as the incidents 
and crime rates rise on the Zuni Reservation, funding for the Zuni 
tribal courts have not kept up with the increased need to take care of 
offenders that are processed through the tribal court.
    Education and Other Programs.--While education is one of the key 
factors to socioeconomic development on the Zuni Indian Reservation; 
however, program funds provided by the BIA and Department of Labor for 
higher education scholarship and vocational and technical training have 
not been able to meet the demands. There is at least an 85-percent 
funding shortfall in this area for Zuni's educational needs. Students 
graduating from high schools do not have the funds available to pursue 
higher education; and, the 15 percent that are fortunate to attain 
higher education achievement do not return to the reservation due to 
unavailability of jobs due to depressed economies. This creates an 
intellectual and economic drainage to the Zuni Community. Adequate 
funding for these programs would assist the Zuni Tribe to minimize the 
ever-growing backlog in the need to fund students who are pursuing 
higher education.
    The foundation of the Zuni Tribe is the land and natural resources 
including real estate programs and water rights attorney programs--to 
protect the diminishing water rights and surface and subsurface water 
tables. The protection and enhancement of these resources are not only 
critical to the future of tribes; they are an obligation of the United 
States. Therefore, funds for these programs should be protected as 
well. Funding for tribal natural resources programs has declined 
significantly over the last two decades. Adequate funds for this 
investment will boost tribal economies, ensure greater food security, 
and protect and revitalize cultural practices throughout the community. 
This investment will lead to more productive resources and contribute 
to the overall economy of the Zuni Tribe.
    Housing and Infrastructure.--Finally, the Zuni Tribe is requesting 
your assistance in reauthorizing the Native American Housing and Self-
Determination Assistance Act (NAHASDA). The Zuni Tribe is in dire need 
of housing development and improvement throughout the reservation. Some 
homes are more than 75 years old and are in need of extensive 
renovation or replacement construction. Some homes lack complete 
plumbing facilities, adequate heating and cooling systems, along with 
adequate communication systems such as basic telephones.
    Consequently, the Zuni Tribe is requesting the committee's support 
in maintaining the current level of NAHASDA funding, as well as 
maintaining the funding within Department of Agriculture for rural 
housing development, and the BIA Housing Improvement Program. As part 
of this reauthorization there are improvements to the Act that will 
improve program management and efficiency in the delivery of housing 
services, which should achieve savings in this program.
    The Zuni Tribe fully supports efforts to improve tribal 
transportation programs such as roads maintenance under the BIA and the 
road construction program with the Department of Transportation.

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