    [Senate Hearing 113-63]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 113-63

                      NOMINATION OF HON. SYLVIA M. BURWELL

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

                                    HEARING

                                   before the

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

     NOMINATION OF HON. SYLVIA M. BURWELL, TO BE DIRECTOR OF THE OFFICE OF
                             MANAGEMENT AND BUDGET

                                 ARPIL 9, 2013

                                   __________

            Available via the World Wide Web: http://www.fdsys.gov/

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    20402-0001

            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                      THOMAS R. CARPER, Delaware Chairman
    CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
    MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
    MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
    CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
    JON TESTER, Montana                  RAND PAUL, Kentucky
    MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
    TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
    HEIDI HEITKAMP, North Dakota

                       Richard J. Kessler, Staff Director
           Lawrence B. Novey, Chief Counsel for Governmental Affairs
             Troy H. Cribb, Chief Counsel for Governmental Affairs
                   Kristine V. Lam, Professional Staff Member
                Deirdre G. Armstrong, Professional Staff Member
                   Keith B. Ashdown, Minority Staff Director
                   Andrew C. Dockham, Minority Chief Counsel
                         Trina D. Shiffman, Chief Clerk
                        Laura W. Kilbride, Hearing Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Carper...............................................     1
        Senator Coburn...............................................     4
        Senator McCain...............................................     8
        Senator Johnson..............................................    11
        Senator Heitkamp.............................................    14
        Senator Portman..............................................    16
        Senator Ayotte...............................................    19
        Senator Baldwin..............................................    22
        Senator Levin................................................    25
        Senator Pryor................................................    27
    Prepared statements:
        Senator Carper...............................................    43
        Senator Coburn...............................................    46

                                   WITNESSES
                             Tuesday, April 9, 2013

    Hon. John D. Rockefeller IV, a U.S. Senator from the State of
      West Virginia
        Testimony....................................................     1
        Prepared statement...........................................    47
    Hon. Sylvia M. Burwell, to be Director, Office of Management and
      Budget
        Testimony....................................................     9
        Prepared statement...........................................    49
        Letter from the Office of Government Ethics..................    51
        Responses to pre-hearing questions...........................    55
        Biographical and financial information.......................    80
        Responses to post-hearing questions..........................   101
    Statement of support from Senator Joe Manchin III................   116

                      NOMINATION OF HON. SYLVIA M. BURWELL

                                  ----------

                             TUESDAY, APRIL 9, 2013

                                         U.S. Senate,
                               Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:33 p.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Thomas R.
    Carper, Chairman of the Committee, presiding.
        Present: Senators Carper, Levin, Pryor, Baldwin, Heitkamp,
    Coburn, McCain, Johnson, Portman, and Ayotte.

                  OPENING STATEMENT OF CHAIRMAN CARPER

        Chairman Carper. The hearing will come to order.
        What I would like to do is go out of order and welcome all
    of you here today.
        Senator Rockefeller and Senator Coburn I believe have
    simultaneous hearings going on in the Intelligence Committee.
    They need to be in two places at once. Even as good as they
    are, they have not figured out how to do it. So I am going to
    ask Senator Rockefeller, if he would, to introduce our nominee,
    and then yield to Senator Coburn for any comments he wants to
    make, and then we will just take it from there, returning to
    regular order after that.
        Senator Rockefeller, welcome.

      TESTIMONY OF HON. JOHN D. ROCKEFELLER IV,\1\ A U.S. SENATOR
                    FROM THE STATE OF WEST VIRGINIA

        Senator Rockefeller. I will so do, Mr. Chairman, if you
    promise to tell us all the times that you have been to Hinton,
    West Virginia, because you have.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Rockefeller appears in the
    Appendix on page 47.
    ---------------------------------------------------------------------------
        Chairman Carper. I actually lived there, Jay, when I was a
    little boy.
        Senator Rockefeller. Well, I want to know more about it,
    but not just now.
        Chairman Carper. Fished on the New River, Bluestone Dam.
        Senator Rockefeller. I know.
        Mr. Chairman, 15 years ago, I was honored to introduce
    somebody named Sylvia Mathews during her nomination hearing to
    become Deputy Director of the Office of Management and Budget
    (OMB). And today, obviously, we are moving up. There is a lot
    that happened in her life, all of it good, but to be head of
    the Office of Management and Budget at this particular time in
    our Nation's history is an extraordinary position.
        We are going to be debating the best course for our
    country's future. It is going to take a wise hand. We need
    smart, strong leadership. We need the Federal budget office to
    be good.
        Sylvia Mathews, now Burwell, is absolutely the person for
    this job. And I do not say that because she comes from West
    Virginia. I say that because I know her really well, and she is
    one of the most extraordinary people I have ever seen going
    through my various decades of life. I urge this Committee to
    swiftly consider her, pass her, and crown her.
        I have written down here that I know Sylvia, I have known
    her most of her life--I say actually her entire life, but that
    would be a lie. I met her when she was 8, and I have known her
    parents for years. Cleo and Bill set an incredible example for
    their two daughters, Sylvia and Stephanie. I have attended
    church with them. I have been with them at many major
    milestones, including the wedding reception for Sylvia and her
    husband, Stephen, who sits behind me. And, Sylvia, you have to
    do all the introducing, all right? Because I will be heading
    out.
        I can tell you that Sylvia is brilliant. It is such a
    cliche, almost embarrassing to say, but she is absolutely
    brilliant. She will never tell you that because she is modest,
    but I can tell you that because I am right. People like her
    come very rarely. She graduated from Harvard and was a Rhodes
    Scholar, but she has never forgotten her West Virginia roots,
    which is key to everything that I feel about her, and I think
    it is key to all of her success. Always grounded, always
    thinking of people in what she does.
        She is humble, she is hard-working, and she has integrity.
    She remains devoted to helping our Nation's hard-working
    families, and she has just proven that through everything she
    has done. Her grandparents were Greek immigrants. They came to
    this country--that whole evocation of the emotions of that, the
    work of that, the toil of that is very much in my mind.
        Sylvia is a proud native of Hinton, West Virginia. It is
    not the largest city in America, but the 3,000 who live there
    would argue that it has a distinguished railroad history. It is
    nestled in the mountains of Appalachia. It is really hard to
    get to. And her friend Terri Giles right behind me knows that
    very well. Deep in the hills of Appalachia.
        She could have made a fortune at any or all points in her
    life just by switching signals and going off to what she was
    trained to do. She has spent the majority of her life in public
    service or working at organizations that are helping people--
    foundations. There is no doubt that she is--well, let me be
    more specific.
        Sylvia previously served in the Clinton Administration as
    Staff Director for the National Economic Council, Chief of
    Staff to Treasury Secretary Robert Rubin, Deputy Chief of Staff
    to the President, and Deputy Director of the Office of
    Management and Budget.
        She was central to crafting the Clinton budget in the late
    1990s, which brought us a whole lot of surpluses and something
    called ``prosperity'' and ``growth.''
        There is no doubt, there can be no doubt that she is the
    person to tackle the challenges of today. Debts and deficits
    are staggering. The Tax Code is riddled with complexity. And it
    needs her. It needs her guidance, her wisdom, and her calmness.
        Our country needs somebody with the experience and the
    intellect of Sylvia Mathews Burwell at the center of the great
    debates that are going to be with us over the next 4 years at
    the very least. The thought of rewriting the Tax Code, to those
    of us on the Finance Committee, is a staggering thought. Having
    Sylvia Mathews Burwell around will help.
        After her time in the Clinton Administration, she turned to
    philanthropic work, which was a natural thing for her, as
    President of the Gates Foundation's Global Development Program,
    which put her all over the world, and she headed that. And as
    you know, that is one of the largest foundations in the world.
    It makes the Rockefeller Foundation look like a small piece of
    dust being blown down some street somewhere. And then recently
    she has worked for the Walmart Foundation.
        But she wants back in public service. Not only does she
    understand budget issues, but she wants to put that knowledge
    to good use and put it to good use to balance and to reduce
    deficits, all the right things, but mostly to help people and
    help communities. That is Sylvia Mathews Burwell. It just is,
    and that is why I am so proud to introduce her.
        I am furious that I cannot introduce her tomorrow. Joe
    Manchin is going to, and he better not speak as well as I am.
    But, anyway, he has a statement he wants to put in the record,
    Mr. Chairman, for this hearing.
        Chairman Carper. Without objection, his statement will
    appear in the record.\1\
    ---------------------------------------------------------------------------
        \1\ The statement for the record from Senator Joe Manchin appears
    in the Appendix on page 116.
    ---------------------------------------------------------------------------
        Before I yield to Dr. Coburn, let me just acknowledge, as
    my colleagues know, we have a lot of Members who come, usually
    Senate but sometimes House as well, to be present and to
    introduce a witness. Almost never do we find someone who has
    known the witness since the age of 8, knows her family,
    worshipped in church with them. It is an amazing recommendation
    and introduction.
        Senator Rockefeller. Mr. Chairman, it is interesting. The
    act of introducing her, presenting to a Committee a candidate
    for a position, there is almost a cliche protocol about it. But
    in my mind, this is an act of public service on my part. I just
    do not even think of what we all have seen so much of, you say
    your three words and get out. I am talking longer than I
    should, and I do not care--unless you do.
        She has traveled the world; she knows the world. The people
    of West Virginia are so incredibly proud of her, always have
    been. She has always been that person looming out on top of the
    rest of us who has a sort of--not a superiority, but a depth,
    an honesty, and an integrity which our State sorely needs. I
    present her to you with pride, and I thank you.
        Chairman Carper. We are happy to receive your
    recommendation and to hear her testify and to take her
    questions. That was a remarkable, extraordinary introduction,
    and we thank you for it.
        In all the years I spent as a little boy learning to fish
    on the New River, which flows right by Hinton, West Virginia, I
    never saw anybody walk across the New River. But if anybody
    could, with an introduction like that, maybe Sylvia would be
    that person. But thank you.
        Senator Rockefeller. But we do not want to take that
    chance.
        Chairman Carper. Probably not.
        Let me yield to Dr. Coburn, please.

                  OPENING STATEMENT OF SENATOR COBURN

        Senator Coburn. Well, let me welcome you here, and your
    family and friends. We had a great conversation in my office.
    You are nominated to be the Director of the Office of
    Management and Budget.
        Congress has failed to do its job, and oftentimes OMB has
    failed to do its job, and I have a lot of confidence that you
    can actually make a very big difference for our country in how
    that office executes strategies to actually help us solve some
    of our problems.
        I have a statement for the record, Mr. Chairman, which I
    would like to put in.\1\ And due to the Intelligence Committee
    meeting that I think is really a priority, Senator Rockefeller
    and I will not be here. I will submit some questions for the
    record so that we have them on record and so I can call you
    later and say here is what you said.
    ---------------------------------------------------------------------------
        \1\ The statement for the record from Senator Coburn appears in the
    Appendix on page 46.
    ---------------------------------------------------------------------------
        Anyhow, we welcome you to the Committee. I appreciate the
    fact that you would come back and serve. We do not have enough
    people willing to do that right now, and there is no question
    you are highly qualified for the position.
        Thank you.
        Chairman Carper. Thank you very much.
        Senator Rockefeller, again, thanks so much for joining us,
    and Dr. Coburn, if you can come back you are more than welcome
    to.
        I think before we do anything else, I am going to ask our
    nominee if there is anyone in the room that she would like to
    introduce to us. You are welcome to do so at this time.
        Ms. Burwell. Thank you, Mr. Chairman. I would love to
    introduce my husband, Stephen Burwell, and my brother-in-law,
    Joe O'Keefe; one of my college friends, Linda Lurie; and one of
    my best friends since I was 4, Terri Giles, from Hinton, West
    Virginia.
        Chairman Carper. All right. That is great. We are delighted
    that you are all here. I was kidding Stephen before we started
    off about his middle name being ``Lucky,'' and I think his wife
    believes that her middle name is ``Lucky.'' And I think they
    are both very fortunate--we are fortunate, Stephen, that you
    would be willing to share your wife. I know you have a young
    family, so it is an extraordinary gift that both of you give to
    our country at this time.
        Today, as Senator Rockefeller said, we meet to consider the
    nomination of Sylvia Mathews Burwell, President Obama's choice
    to serve as Director of the Office of Management and Budget,
    with a big underline under the word ``management.'' This is a
    critical nomination, as we know, that comes at a critical time
    in our Nation's history, as OMB has lacked a Senate-confirmed
    leader since January of last year, more than a year, when then
    Director Jack Lew left to become Chief of Staff at the White
    House.
        Folks who know me know that I am a big believer in the
    power of leadership. Throughout my life and career, I have seen
    the impact of dedicated and talented leaders firsthand and
    learned how good leaders can be critical in turning around
    struggling organizations and providing essential guidance
    during challenging times. This is one of those challenging
    times. Leadership is an important, and often undervalued, asset
    that can determine whether or not an organization of any size
    or scale can effectively accomplish its mission or missions.
        That is why I have long been concerned about a problem that
    has plagued the executive branch through both Democratic and
    Republican Administrations: numerous and longstanding vacancies
    in senior positions throughout the Federal Government. This
    problem has become so pervasive that I have started referring
    to it as ``executive branch Swiss cheese.'' At any given
    moment, we are lacking critical leadership in numerous
    positions in the executive branch in just about every agency,
    undermining the effectiveness and accountability of our
    government. While Congress and the Administration have taken
    steps to address this problem, the fact remains that we still
    have more work to do to ensure that we have talented people in
    place to make these critical decisions and to hold accountable.
    That is one of the reasons why today's confirmation hearing is
    so important and why I am pleased that President Obama has put
    forward a nominee who I believe has the skills necessary to
    step in and be effective not in a week or two or a year or so,
    but right now.
        Ms. Burwell's prior experience in government has prepared
    her well to lead during this challenging period for our Nation,
    a time when we can no longer afford to avoid making the tough
    decisions that are necessary to put our Nation on a responsible
    and sustainable long-term fiscal path.
        She served, as Senator Rockefeller mentioned, as Deputy
    Director of the Office of Management and Budget and Deputy
    Chief of Staff during the Clinton Administration--a time when
    our government got its deficit under control and achieved four
    balanced budgets in a row. She is someone who knows firsthand
    how challenging budget negotiations can be. But she is also
    someone who knows that it is not only possible but imperative
    for the Congress and the President to reach a bipartisan
    agreement on a comprehensive, long-term budget plan.
        Ms. Burwell also brings valuable leadership skills from the
    private sector, where she helped run two of our Nation's
    largest philanthropic foundations, the Bill and Melinda Gates
    Foundation and the Walmart Foundation. If I am not mistaken, I
    think she spent some time at McKinsey as well, as a management
    consultant. In all of the jobs she has held over the years, Ms.
    Burwell has shown a great work ethic and intellect and a strong
    business perspective. She also is a warm and gracious person
    and someone who can build consensus across party lines at a
    time when members of both political parties need to set aside
    partisan considerations for the sake of our country. These
    qualities, in my opinion, can be attributed in large part to
    the fact that she hails, as has been mentioned here today, from
    Hinton, West Virginia--a wonderful little town of wonderful
    people where I was once privileged to live as a young boy.
        These qualities have made Ms. Burwell an effective leader
    since the day she arrived in Washington as a young member of
    President Clinton's economic team. Her wisdom from both the
    public and private sectors will now be put to use in addressing
    fiscal challenges that are much more severe than the daunting
    challenges she helped address in the 1990s. For some
    perspective on the serious nature of our Nation's debt and
    deficit crisis, I will just note that in fiscal year 1993, the
    deficit was $255 billion. The Congressional Budget Office (CBO)
    now projects the deficit for this fiscal year to be $845
    billion, and that will be the first time in 5 years that the
    deficit actually dipped below $1 trillion. In 1993, debt as a
    percentage of gross domestic product (GDP) was 49 percent.
    Today, it is approaching 76 percent.
        The grand budget compromise that I believe we need to
    address this fiscal crisis must have, I think, three essential
    elements. It must address both spending and revenues in a
    balanced approach. It must rein in the costs of our entitlement
    programs in a way that does not savage the poor or elderly. And
    it must demand better management of our Government programs,
    something that Senator Coburn has already referred to. We must
    deliver better services to the American people at a lower cost
    in almost everything that we do.
        This Committee is an important partner with the Office of
    Management and Budget in all of these areas, but especially in
    ensuring that our government achieves better results for less
    taxpayer money. Both Congress and the executive branch bear
    equal responsibility in rooting out waste, fraud, and abuse in
    Government programs, and just plain inefficiency. Both the
    legislative and executive branches bear responsibility in
    ensuring that we measure the performance of programs and alter
    or end those programs that do not work or have outlived their
    usefulness. Both bear responsibility for providing transparency
    to the public on how their tax dollars are spent.
        Dr. Coburn and I have worked closely together over the
    years to identify sensible, achievable savings that could be
    accomplished simply through better management. I will mention
    just a couple.
        We know that we can save billions of dollars by shedding
    some of the thousands of pieces of Federal property that we no
    longer use or that we underuse.
        We know that we can save billions of dollars every year by
    further reducing the amount of improper payments that our
    government makes--still over $100 billion per year.
        We know that we can save billions in Federal contracting
    every year through efforts such as so-called strategic sourcing
    initiatives, which involve buying more in bulk.
        We can save billions of dollars through better management
    of our Government's information technology (IT) infrastructure,
    including, for example, by continuing the effort to consolidate
    Federal data centers.
        And we can bring in billions of dollars in revenues by
    doing a better job of collecting taxes that are owed but not
    being paid. And here I am not just talking about new taxes, but
    I am talking about doing a better job of collecting the taxes
    that are already owed, some of which have been outlined and
    pointed out by our own Permanent Subcommittee on
    Investigations, which is led by Senator Levin.
        And I know from my conversations with Ms. Burwell that she
    is fully committed to all of these efforts, and more. She is
    also committed to helping improve ways to measure the
    performance of Government programs and to ensure that we have
    sound financial management practices across the government,
    including at the Department of Defense (DOD), which in its
    whole history has never been able to conduct a full audit of
    its finances, much less obtain a clean audit.
        Ms. Burwell, as you sit here 20 years after you first came
    to Washington, I do think it is instructive to look back and
    reflect on the budget debate of those days when, like now, we
    faced deficits and long-term debt problems that on many days
    seemed insurmountable.
        And just over 20 years ago, in January 1993, President
    Clinton's nominee to be Director of the Office of Management
    and Budget, then Congressman--my colleague at the time--Leon
    Panetta, appeared before this Committee. And he talked about
    how the American people did not trust the government anymore.
    He spoke of the importance of making the budget process work so
    that our government could start to restore that credibility.
    This is what he told this Committee 20 years ago. Leon said,
    ``We need to make government more efficient, more creative,
    make it an instrument of long-term economic growth, not an
    impediment, and make it a source of investment in our future,
    not a robber of our children's birthright.''
        All of those words ring, I think, even more true today. The
    American people will not--and should not--tolerate Congress and
    the White House kicking the can down the road any longer on
    making tough budget decisions. Nor will they tolerate our
    failure to make significant progress in addressing some of the
    tough management challenges faced by agencies across
    government. My strong recommendation to my colleagues today is
    that we confirm this nomination of Ms. Burwell promptly so that
    she can apply her considerable skills and intellect to the work
    that the American people sent us here to do.
        I called Erskine Bowles when the President submitted the
    name of Sylvia Burwell to be the OMB Director. I knew they
    worked together in the Clinton Administration. I said,
    ``Erskine, tell me what you know about Sylvia Burwell.'' And he
    took me back in time to the late 1990s--I think you were at the
    time maybe Chief of Staff to Bob Rubin, as I recall. And he
    said that he was in a meeting in the Oval Office with Bob
    Rubin, the President, and you. And I think the President was
    grilling Bob Rubin on a particular issue, and he was maybe
    struggling just a little bit to respond. And you
    surreptitiously handed a note to Bob Rubin. He read it and gave
    the President a brilliant answer. And as the President was ooh-
    ing and ahh-ing over the brilliance of the answer, Erskine
    interrupted and said, ``Mr. President, I think I have broken a
    code here. Rubin is not that smart. It is Sylvia. She just
    handed him this note that enabled him to address the issue you
    have raised.'' That is high praise from a guy that I respect
    enormously.
        Again, we are just grateful that you are here. Our best
    really to the folks who raised you, your Mom and Dad, for doing
    a terrific job with you, and I suspect--you have one sister?
        Ms. Burwell. One sister.
        Chairman Carper. One sister. And you turned out well, and I
    know Hinton, West Virginia, and West Virginia are proud of you,
    and so am I.
        And with that having been said, I think we turn next to
    Senator McCain.

                  OPENING STATEMENT OF SENATOR MCCAIN

        Senator McCain. Thank you, Mr. Chairman, and I apologize
    that I have to go to another hearing. I just wanted to say this
    is an incredibly well-qualified nominee who is well known to
    many of us in her previous incarnations. There must be some
    character flaw that she wants the job, but other than that, I
    think that she is very well qualified, and the witness can see
    how controversial her nomination is by this packed Committee.
    But this is an excellent choice, and I wish her well. And maybe
    before she leaves she could get us some discounts at Walmart.
    [Laughter.]
        I congratulate her on her nomination.
        I thank you, Mr. Chairman, for allowing me to say a few
    words.
        Chairman Carper. Thanks so much for being here and for your
    comments.
        I am going to go through some brief introductions, very
    brief, and ask a couple of questions, and then we will turn it
    over to you and then to my colleagues.
        Sylvia Burwell has filed responses to biographical and
    financial questionnaires, answered pre-hearing questions
    submitted by our Committee, and had her financial statements
    reviewed by the Office of Government Ethics. Without objection,
    this information will be made part of the hearing record, with
    the exception of the financial data, which are on file and
    available for public inspection in the Committee offices.
        Our Committee rules require that all witnesses at
    nomination hearings give their testimony under oath, and I am
    going to ask you, if you would, to stand and to raise your
    right hand and respond to these questions.
        Do you swear that the testimony you are about to give to
    the Committee will be the truth, the whole truth, and nothing
    but the truth, so help you, God?
        Ms. Burwell. I do.
        Chairman Carper. Please be seated. Please go ahead at this
    time and make your statement, and then I am going to come back
    and ask you four perfunctory questions. Thank you. Welcome.

     TESTIMONY OF HON. SYLVIA M. BURWELL\1\ TO BE DIRECTOR, OFFICE
                        OF MANAGEMENT AND BUDGET

        Ms. Burwell. Thank you, Chairman Carper, and thank you,
    Ranking Member Coburn, and the entire Committee for welcoming
    me today. It is a privilege to be considered by this Committee
    as the President's nominee for the Office of Management and
    Budget.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Burwell appears in the Appendix
    on page 49.
    ---------------------------------------------------------------------------
        I want to begin by thanking Senator Rockefeller for that
    kind introduction, and I will just say, I do not know that he
    actually remembers it. He, for me, embodies the values of my
    small town in West Virginia. And it was many years ago that the
    Senator visited Hinton, and at that time, he gave his first
    interview to a group of young reporters. We were actually in
    the sixth grade and had started our own newspaper. And it was
    just a reflection of his caring and commitment to the youth of
    our State. And his willingness to engage with the young people
    of the State of West Virginia is just reflective of what an
    incredible role model he has been in terms of public service
    for me and for so many others, and I thank him for that and the
    tireless work that he has done in the State of West Virginia
    and for the Nation.
        I am pleased that my husband, my brother-in-law, and
    friends could join me. Our 5-year-old Helene and our 3-year-old
    Matthew chose a park over hearing their Mommy answer questions,
    so they are not with us today.
        I understand the sacrifices entailed by public service, and
    I recognize that one of the biggest burdens often falls on
    one's family. And so I deeply appreciate the support that my
    family is giving me as I take on this new challenge.
        I am also grateful to President Obama for nominating me to
    serve as the next Director of the Office of Management and
    Budget. It is an honor to be considered for this position at
    this important time.
        And, finally, I want to thank the Members of the Committee
    and their staffs for the meetings that have occurred over the
    past weeks as I have come to prepare for this hearing. I
    appreciate everyone's time. For those who I have not had the
    opportunity to meet with, I look forward to doing that. And
    what I hope is that those meetings are the beginning of a
    conversation that, if confirmed, we can continue.
        I believe in the greatness of our Nation. As a second-
    generation Greek American, my family and I have benefited
    greatly by the opportunities this country has offered.
        Our Nation has made important progress over the last 4
    years. We have pulled out of a deep economic downturn. Our
    financial markets have stabilized. Businesses are hiring again.
    And we began the long journey to put our fiscal house in order.
        The President and the Congress together have made progress
    on the deficit, but there is much more to do. And we need to
    focus on making the economy work for middle-class families and
    American business, in both the short and the long term--
    harkening back to some of the phrases and words of Leon
    Panetta.
        If I am confirmed, my primary focus will be to contribute
    to achieving balanced deficit reduction, increased efficiency
    and effectiveness in how our government works, and targeted
    investments that help this economy grow and create jobs.
        The President is actively engaged with Members of Congress
    on this subject. And if I am confirmed, I will do everything in
    my power to keep this dialogue going and to continue to build
    on the relationships between the Administration and Members on
    both sides of the aisle.
        From my experience in the Clinton Administration--at OMB,
    the White House, and the Treasury Department--I learned the
    importance of working together in a bipartisan fashion to get
    things done. I saw firsthand how we had to come together to get
    deficit reduction agreements in the late 1990s. I know that we
    all come to the table with firm convictions and the belief that
    we know the right answer. But I also know that we all come with
    the same conviction to serve the American people, which I hope
    is what will drive us to find common ground to move the country
    forward.
        There is no question that the road ahead will be difficult.
    The challenges we face are sobering. But I am confident we can
    come together on a comprehensive plan.
        I am pleased with the prospect of returning to OMB. I have
    tremendous respect for the institution and the incredibly
    talented men and women who work there. I am hopeful that, if I
    am confirmed, I can contribute to ensuring OMB is a place where
    talented people want to go and that the institution is strong
    for other administrations. Although OMB is most well known for
    its work on the Federal budget, the management side of OMB is
    critical.
        In the current fiscal environment, it is more important
    than ever that we are operating the government in the most
    efficient and effective way possible.
        I want to credit this Committee and Acting Director Zients
    for their strong leadership in these areas. And if I am
    confirmed, I want to build on these efforts and continue to
    increase the efficiency and effectiveness of taxpayer dollars.
    By governing smartly and being good stewards, we can reduce the
    deficit and increase the value of what is delivered.
        As someone who has been out of government now for 12 years,
    I am hopeful that I can bring a fresh perspective to the fiscal
    debates underway. From my positions at the Walmart Foundation
    and the Bill and Melinda Gates Foundation, I have seen the
    important role that both the government and private sector play
    in the lives of the American people.
        If I am confirmed, it would be an honor to dedicate myself
    to using the tools of OMB to ensuring that our government
    delivers for the American people.
        Again, I want to thank the President for giving me this
    opportunity and the Committee for considering my nomination. I
    look forward to answering the questions that you may have.
        Thank you, Mr. Chairman.
        Chairman Carper. Thank you so much for that statement, and
    to our guests for joining us as well.
        I am going to ask four questions. I am going to yield then
    to Senator Johnson for whatever questions he might like to ask,
    and then Senator Heitkamp, Senator Portman, and then I will ask
    some questions of my own. I think you may have heard these
    questions before.
        First, is there anything you are aware of in your
    background that might present a conflict of interest with the
    duties of the office to which you have been nominated?
        Ms. Burwell. No, I am not.
        Chairman Carper. Do you know of anything, personal or
    otherwise, that would in any way prevent you from fully and
    honorably discharging the responsibilities of the office to
    which you have been nominated?
        Ms. Burwell. I do not.
        Chairman Carper. And do you agree without reservation to
    respond to any reasonable summons to appear and testify before
    any duly constituted Committee of Congress if you are
    confirmed?
        Ms. Burwell. Yes, sir, I do.
        Chairman Carper. All right. So far, so good.
        Senator Johnson, please.

                  OPENING STATEMENT OF SENATOR JOHNSON

        Senator Johnson. Thank you, Mr. Chairman.
        Ms. Burwell, welcome, and welcome to your family and
    friends. I also enjoyed our meeting earlier, and I appreciate
    your willingness to step forward and serve. It is a sacrifice,
    particularly with a young family. You know what you are getting
    into, so thank you for your willingness to do that.
        I will also have an opportunity to question you during the
    Budget Committee confirmation hearing as well, so let me
    concentrate on the management side--from my standpoint, the
    regulatory side.
        I was in Wisconsin the last 2 weeks and visited one
    company, which I do not want to name, but they were talking
    about the new Boiler Maximum Achievable Control Technology
    (MACT) rule. They have had an engineering study conducted on
    it. It will cost them about $5 million to hopefully be able to
    comply. That was the cost. The benefit--and this is an
    independent engineering study--they would be able to reduce the
    non-toxic particulate matter coming out of their operation by
    two dump truck loads full per year. That is it. To me, that
    certainly qualifies under the law of diminishing returns as
    something we really need to take a look at.
        So, in your position at OMB, what would be your response to
    that? How can we do a far more effective job at evaluating
    those types of regulations that have such a high cost at such a
    minimum benefit?
        Ms. Burwell. Senator, I am not familiar with that specific
    example, but in terms of overall philosophy and how we can work
    to make our regulatory system work in a more effective way, I
    think it is, starting with what the principles of what we are
    trying to do with the regulation and thinking through the
    issues of we do the regulations in order to promote health,
    safety, and the environment, at the same time, consider how
    those regulations impact the economy, economic growth,
    innovation, and jobs, and putting those things together through
    a process of which the Office of Information and Regulatory
    Affairs (OIRA) is an important part--an important part of
    making sure that things are appropriately considered; looking
    at the cost/benefit analysis, which agencies do; thinking
    through, have the appropriate parties had an opportunity to
    comment and be a part of the discussion, and whether that is
    inside the government or outside the government.
        And so if I am confirmed, I look forward to helping OIRA in
    terms of implementing that oversight role in regulation.
        Senator Johnson. You raise an important issue in terms of
    having people affected by regulations having input into the
    process. Between 1998 and 2010, the opportunities for public
    comment have really declined. In other words, the number of
    times regulations have been issued without opportunity for
    public comment has basically doubled from 18 percent of the
    time to 35 percent of the time. Is that something that troubles
    you? Is that something you would direct your attention toward
    solving?
        Ms. Burwell. I think there are two elements to that
    question of the public comment, and, one, I think you are
    referring to interim rules, the issuance of interim rules and
    the use of those as a tool. And if I am confirmed, I want to
    make sure that any use of interim rules is both lawful and
    appropriate.
        At the same time, in the broader category of regulation,
    one of the things that I think has changed since the time when
    I was previously at the Office of Management and Budget is the
    opportunity that people can actually comment using technology.
    So that expands the ability for people to discuss and comment
    in the rulemaking process because I think as we think about
    public comment and transparency, we want to think about it over
    the entirety. But with regard to the specific issue you are
    raising, interim rules, that is something that I want to
    understand how and why those rules, when they are interim, what
    are the decisions and how they are made.
        Senator Johnson. One of the macro pieces of information
    that was pretty eye-popping to me when I came here was a study
    commissioned by the Small Business Administration (SBA) of this
    Administration that tried to put a figure on how much it costs
    to comply with Federal regulations each year, and their result
    was $1.75 trillion per year. To put that into perspective, that
    is a number that is larger than all but eight economies in the
    world.
        I know some people dispute that figure. I have no idea how
    particularly accurate it is other than we know the regulatory
    burden is huge.
        Is that something you acknowledge? Do you dispute the
    figure? Or, again, do you just acknowledge the harm that the
    regulatory burden is causing to economic growth and job
    creation?
        Ms. Burwell. Senator, with regard to the issue of small
    business, my father was a small businessman, and so I
    understand and appreciate that he was an optometrist. And when
    I think about that at OMB, I think it actually cuts across a
    number of areas that are important. And one is in the
    regulatory space, and I think that is an important role that
    OMB has in making sure that SBA and small business has a voice.
    And I think that is part of the oversight role.
        I think throughout a number of other different areas in
    small business, whether it is in the area of strategic
    sourcing--the Strategic Sourcing Leadership Council has seven
    of the largest contracting members and small business, so that
    voice is at the table. Or as we think about questions of
    insourcing and those types of topics, making sure that we
    consider small business.
        So I think across the board, the issues of how different
    actions of government affect small business are important. And
    one of the most important things we can do is make sure the
    right voices are at the table.
        Senator Johnson. What proposals have you heard potentially
    coming out of Congress that would help reduce our regulatory
    burden?
        Ms. Burwell. That is one of the things that I hope, if
    confirmed, that I can get deeper into, where are the places
    where people think things are not working. For instance, the
    lookback that has occurred--and, again, something related to
    small business in terms of the lookback and thinking things,
    regulations we no longer need, that is a process that is
    ongoing. There were 500 things identified. How is that process
    going? And should we build on that process, change that
    process? What are the specifics? Because one of the things that
    I think is important in thinking through the tools that OMB has
    or does not have is, what is the outcome we are trying to get
    and what is not working right now? Are there places where we do
    have best practices that are working that we need to build on?
    Or are there places where things are not working and we need to
    stop?
        And so, if confirmed, what I would like to do is understand
    what that list looks like, working with this Committee to
    understand that, so we can get at the ones that are the largest
    and the most important to change.
        Senator Johnson. Just a quick suggestion. We held a pretty
    interesting hearing chaired by Senator Mark Warner about the
    British one-in/one-out rule. So for every new regulation, you
    have to find one of equal or greater compliance cost to get rid
    of. I would go more one-in/ten-out, but that is an editorial
    comment.
        One last quick question. I believe this Committee has been
    very well served by the efforts of the Government
    Accountability Office (GAO). It is really one of the areas of
    government where we have actually cut their budget, and as a
    fiscal conservative, it would be one of those areas I would
    probably be willing to increase their budget.
        I want to get your quick assessment on that and your level
    of support for the GAO.
        Ms. Burwell. I think the GAO is actually an important
    partner for all of us as we try to move to more effective and
    efficient government, and the report that came out today, I
    think, is something that we need to take a close look at and
    work on. I think the Administration has in some cases worked on
    those issues. I know that the Congress has as well.
        But I think GAO is an important partner to have these
    conversations, looking for those opportunities to make
    government more effective and efficient, and I welcome that
    opportunity, if confirmed.
        Senator Johnson. Well, thank you. I look forward to seeing
    you tomorrow to talk about the budget.
        Thank you, Mr. Chairman.
        Ms. Burwell. Thank you, Senator.
        Chairman Carper. Senator Heitkamp.

                 OPENING STATEMENT OF SENATOR HEITKAMP

        Senator Heitkamp. Ms. Burwell, I greatly enjoyed also our
    discussion as you came to my office and our free-flowing
    exchange of ideas. And I am here today, kind of ironically, in
    a room that is not very packed with people, realizing that this
    is probably, in my opinion, one of the most important
    confirmation hearings that I will attend in the next 4 years.
        Why do I say that? Because if you ask any American today,
    they are deeply concerned about the fiscal condition of our
    country, not just because they hear it on the news, but because
    intuitively they know that in many ways we are mortgaging our
    children's future. And if we do not get a handle on it, we will
    not be successful into the future.
        And so I applaud you for stepping up at a very trying time.
    I want to make sure that you know that, at least from my
    standpoint on this Committee, I intend to be a great friend and
    a great adviser to you in the many circumstances that you will
    confront.
        I just want to followup on a couple points. One is
    leadership. I read your resume, and I know that you have been
    one of the folks who have been in the back passing notes
    forward. And I want to make sure that you know that our
    expectation is that you are going to be sitting at the table, a
    full partner with the President and with the Cabinet in solving
    our fiscal crisis, and that you feel that is, in fact, the
    authority that you have been granted by the President.
        Ms. Burwell. Yes, Senator, I do feel that. I feel very
    comfortable and confident that I will be a part of the
    President's economic team and be a part of those conversations
    in a very real way and an important way. And it has been my
    experience probably from folks like Bill Gates to Mike Duke,
    the CEO of Walmart, that I am not a shrinking violet in the
    room. [Laughter.]
        Senator Heitkamp. Somehow I had that sense when you and I
    had that visit.
        I also want to piggyback a little bit on the discussion
    that Senator Johnson just had about regulatory reform. This is
    not make-believe. This is real all across all the corners of
    America. People believe in clean water. They believe in clean
    air. They believe in safety regulations. But they see things
    that are happening in their businesses that make no sense. In
    fact, I joke a little bit that I am going to write a book, and
    it is going to be titled, ``That Makes No Sense,'' and it is
    going to be a thousand-plus pages because every day I hear
    things that make no sense. And we have all been--at least, I
    have been in, my life--a regulator, and I know how people who
    write regulations think. And I know how much leadership it
    requires to ratchet that zealous, ``I want to make things
    perfect in the world'' behavior, when that may not be the best
    way to manage it.
        I think from my standpoint, the best way to understand
    regulation, the best way to understand what Senator Johnson has
    been talking about and what I have been talking about, is
    actually reaching out to those who are regulated, not just the
    agencies who are zealous, but reaching out to the people, in my
    case, at the grain elevator who are sweeping their floor
    constantly with very little risk to anyone because no one is
    ever on the ground there--but yet that is a regulation that
    they are required to comply with--or our small community banks
    who are struggling under the regulations and basically forced
    to no longer do mortgages.
        So I want to know what you are going to do to bypass what
    we call ``the beltway mentality'' and to actually visit with
    North Dakota and American businesses and with those folks who
    work every day struggling to meet compliance burdens.
        Ms. Burwell. I think as Senator Rockefeller mentioned,
    during my lifetime, my North Star is being from a small
    community and a small town and knowing and thinking about the
    issues from that perspective, and I will hope that during
    this--it has never been anything but my North Star and will
    continue to do that.
        With the specifics of how to do that, I think your point
    that you struck on about leadership actually is an important
    point in terms of making sure that there is a culture and a
    thought process and an approach. I think it is a signal that in
    the answer I mentioned small businesses three different ways in
    terms of how they interact with OMB. The signals that I send as
    a leader, I think, are actually a very important part of the
    application of the processes that exist in ways that get to the
    outcome that you are talking about.
        So I understand that it is my responsibility as part of
    leadership and to use those processes that exist and then
    answer the question that Senator Johnson posed, which is, if
    there are not enough tools and we do not think we can get it
    done, what tools do we need? And so that is, if confirmed, what
    I would like to try to do.
        Senator Heitkamp. We would just like to believe that at the
    table there are not just the bureaucrats who are driven to make
    the world perfect, but that there are people who are
    experiencing real-life conditions and conclusions as a result
    of these regulations. And, there is legitimate fear out there,
    and you have seen it and I have seen it in almost daily visits
    with people in my communities in my home State, and I am sure
    many communities in States across this country.
        I want to also talk a little bit about the interaction
    between OMB and, let us say, the Bureau of Reclamation. I have
    a particular concern about a record of decision, and this is
    not even about the merits of the case. You and I can debate the
    merits of the case. But my concern about this is that there is
    a lack of decisionmaking, which absolutely frustrates people in
    the real world when they know they have to make decisions in a
    timely basis. And I would like to hear if you are willing to
    make a commitment to really look at those things that have been
    hanging fire for a long time at OMB and do not seem to get
    resolved with the agencies, or they get tucked away into a
    corner without any real attention to resolving the controversy.
        Ms. Burwell. Senator, you have my commitment that, if I am
    confirmed, what I want to do is have a relationship where we
    can have those conversations, where, when you pick up the
    phone, let me know what the concerns are, and that I have the
    ability to have a dialogue and look into it, understand it, and
    have a conversation about it. And so that is what I am
    committed to do and believe is a very important part of
    relationship building, is a dialogue, an ability to hear,
    listen, and then actually communicate back and be all right
    with saying here is what my understanding of the situation is
    and be able to do that.
        Ms. Heitkamp. Just one final comment. I am thrilled that
    you are going to be at OMB. I am thrilled that you are willing
    to step up and take on this challenge, because I think you are
    probably the right woman for the job, probably the person who
    is going to really begin to bring some faith of the American
    public back into this fiscal process. And I want you to know
    that, speaking just on my behalf--but I am sure for this
    Committee--anything that we can do that helps you address the
    needs of this country and move this country forward, we look
    forward to working with you.
        Ms. Burwell. Thank you, and I think you probably get a
    sense that I will probably pick up the phone and call.
        Chairman Carper. Thank you, Senator Heitkamp.
        Senator Portman, please. Welcome.

                  OPENING STATEMENT OF SENATOR PORTMAN

        Senator Portman. Thank you, Mr. Chairman, and thank you,
    Ms. Burwell, for being here, and thanks for your willingness to
    sit down and walk through a lot of these issues in advance. You
    and I talked more about the job than we did about the issues I
    am going to raise today, but having had the honor of having
    that job, I agree with what you said earlier, which is OMB as
    the place where talented people want to go ought to be your
    goal. And you are fortunate because you are inheriting some
    really talented people. Of the roughly 500 people who were
    there when I was there, I owe them a lot. They were some of the
    best and brightest in public service, and they are drawn there
    for a reason: they care about government efficiency, they care
    about budgeting, they like balanced budgets. And so I know you
    will use them as great resources, and having been there before,
    you understand the importance of the people in the job.
        It is a tough job, and it is the only job in the Cabinet
    where you can measure your success not by how popular you are
    but how unpopular you are among your fellow Cabinet Members.
    And when they start to like you too much, you are not doing
    your job. So that will be a good measure for you.
        Tomorrow I will be in the Budget Committee, so we will talk
    more about the fiscal challenges we face, and hopefully the
    President's budget will offer some hope tomorrow, so there will
    be lots to talk about. You are going to end up being there
    during an interesting time.
        But today let us talk about the M in OMB, which is, as you
    say, a really critical part of the job and sometimes
    overlooked, and it probably was the most fun part of the job
    for me, and I think will be for you.
        Senator Heitkamp and Senator Johnson have both raised some
    great ideas on the regulatory front. You said you are looking
    for ideas, ways to improve the regulatory environment. Let me
    give you three really quickly and get your responses.
        One is about having a regulatory agenda. For nearly three
    decades, Presidents of both parties have published their plans
    on new regulations twice a year. It is required by an Executive
    Order (EO) that was issued under President Clinton. You may
    have been there. It is also required by statute, the Regulatory
    Flexibility Act. The publication in the spring and the fall is
    by statute. It is very important because it helps the public
    and it helps regulated parties to better understand these new
    rules that are in the pipeline, and helps on potential
    compliance costs, particularly for small businesses.
        The spring regulatory agenda, as the title would suggest,
    is supposed to be published in the spring, and again, it is
    under statute--April or May. Last year, the spring agenda never
    showed up despite the fact that Cass Sunstein, who was the
    Administrator of OIRA, set April 13th as a firm deadline for
    agencies to submit their spring regulatory plans to OMB.
        I think it is the first time it had not been released in
    decades, at least to my recollection. I wrote the President
    twice to ask where it was because we are very interested here
    in this Committee to look at that regulatory agenda. I received
    no reply. Instead, and, again, without any explanation, OMB
    simply ignored it and then released a single regulatory agenda
    on Friday, December 22, 2012--after the election, incidentally.
        So in your briefing for this hearing, have you learned why
    the Administration chose not to issue a regulatory agenda in
    the spring or, for that matter, in the fall? And will you
    commit to us today, since this Committee is interested in this
    information, that you will produce these regulatory agendas on
    time as required by law and Executive Order?
        Ms. Burwell. Senator, I think at the root of your question
    there are sort of two parts. One is responsiveness in terms of
    some of your interactions with OMB, and I look forward to, if I
    am confirmed, being responsive in terms of getting back to you,
    as I said, in terms of answering questions in the form of a
    dialogue, in terms of----
        Senator Portman. Yes, my letter was to the President, not
    to the OMB Director. But I did not hear back from the
    President. But do you commit to send us those regulatory
    agendas on time under statute?
        Ms. Burwell. What I commit to is understanding--I do not
    know what the reasons were. As a private citizen, one of the
    things that is different than the last time that I was here for
    confirmation for a position at OMB is I was in the government.
    And so as a private citizen, I have not had the opportunity to
    be briefed on deliberations within the government.
        Senator Portman. OK. I would suggest a simple ``yes.'' I
    mean, this is something that has always been done. Ms. Burwell,
    when you were there, it was done. Are you saying that you
    cannot commit that you will give this Committee and the
    American people the regulatory agenda that is required by law?
        Ms. Burwell. Senator, because I do not know the reason that
    it was not done, what I can commit to do is do my best to get
    it here. Because I do not know the facts behind what happened,
    that is why I am not comfortable making a commitment when I do
    not know the facts around the issue.
        Senator Portman. Really? OK.
        Ms. Burwell. So my commitment is----
        Senator Portman. Let us talk about something else, then.
    Cost/benefit analysis. As you know, for 30 years Presidents of
    both parties have required executive agencies to go through
    this cost/benefit analysis. It is a bipartisan project
    initiated in the Carter Administration, formalized by President
    Reagan, again updated by President Clinton when you were there,
    I believe, reaffirmed by President Obama in January 2011; and a
    central element of that is to look at significant rules, at
    their cost/benefits, look at reasonable alternatives, and
    tailor new rules to limit unnecessary burdens.
        What are your views on the importance and impact of the
    OIRA review? Do you think it has improved the quality and cost-
    effectiveness of major regulations?
        Ms. Burwell. I do think that the cost/benefit analysis is
    an important part of getting to some of the issues that were
    part of the earlier questions and ensuring that we understand
    how we think through that balance of providing safety, public
    health, and protecting our environment while at the same time
    balancing economic growth and job creation and innovation in
    our economy.
        Senator Portman. Great. There is one major gap, as you
    know, and you and I talked about it. It does not apply to
    independent agencies, and the President has talked about that,
    even though those agencies are now responsible for about a
    quarter of all major rules and have authority over critical
    sectors of our economy, from telecom to agriculture to
    financial services. They are exempt from 12866, as you know.
    And the economic analyses have suffered as a result.
        Here is a letter that in December was sent to this
    Committee by a bipartisan group of former OIRA Administrators.
    They said that the legal advisers to both Presidents Reagan and
    Clinton concluded the President has legal power to extend this
    requirement to independent agencies, but both Presidents chose
    not to do so out of deference to Congress. Many of us across
    the political spectrum have urged reconsideration of this
    decision. Our concern is that independent agencies typically do
    not engage in the economic analysis that we have come to expect
    from executive agencies. In 2003, Cass Sunstein actually wrote
    a law review article saying that the commitment to cost/benefit
    analysis has been far too narrow and should be widened to
    include independent agencies.
        So my question to you today is--we have legislation--as you
    know, Senator Mark Warner and I have introduced, along with
    Susan Collins, and other Members of this Committee have
    supported it--to close that gap, to give the President the
    authority to do what he says he wants to do. Do you think the
    independent agencies would benefit from that kind of analysis?
        Ms. Burwell. Senator, what I would like to understand is
    why do we think the independent agencies are not doing the
    appropriate cost/benefit analysis and what is the best way to
    get that done, because I think that is the question, if I am
    confirmed, that I would want to understand and understand what
    is the best way, because I think at the core of the issue is we
    want the independent agencies to be pursuing cost/benefit
    analysis in an appropriate way.
        There is a question about whether or not that is being
    done, and then the question I would have is: What is the best
    way to get there, at the same time that we consider and respect
    the Congress' decision to make those agencies independent at
    various times, and all that comes with that, whether that is
    the budget process or the regulatory process.
        Senator Portman. Well, we would like to work with you on
    that. They are not doing it because, for the most part, they
    are not required to do so unless there is a specific
    authorizing statute that does require them, and so this would
    be a requirement for them to follow this same rigorous
    discipline that other agencies are subject to. And, again, the
    President has spoken favorably of it, so I hope you will work
    with us to give you all the statutory authority that you need.
        I have some other questions on permitting reform and other
    ways to help on the regulatory process side, the Federal
    property that I am working with the Chairman on. I look forward
    to doing some followup questions with you on those. And, again,
    I look forward to seeing you at the Budget Committee tomorrow
    and, I believe you will be our next OMB Director, and this
    Committee looks forward to working closely with you.
        Ms. Burwell. Senator, thank you, and thank you for your
    advice and counsel in our meeting.
        Chairman Carper. I would just have one question of my
    colleague? Which seat did you prefer sitting in--the one that
    she sits in today or the one that you sit in today?
        Senator Portman. It is much more fun being on this side.
    [Laughter.]
        The seat that she will have is the one I prefer. Honestly,
    it is a great opportunity, and as I said, you will be
    surrounded by some incredible public servants and have the
    opportunity to do, as you and I talked about, some truly
    important things for the country right now.
        Ms. Burwell. Thank you.
        Chairman Carper. Thanks for those questions.
        We have been joined by Senator Ayotte and by Senator
    Baldwin. I am going to recognize Senator Ayotte first, and then
    Senator Baldwin. Welcome. Glad you are here.

                  OPENING STATEMENT OF SENATOR AYOTTE

        Senator Ayotte. Thank you.
        I want to congratulate you on your nomination, I appreciate
    the very important position that you have been nominated for.
    And I wanted to ask you about--there was a third annual GAO
    report on duplication issued today, and it identified 31 areas
    where agencies may be able to achieve greater efficiency or
    effectiveness. Have you had a chance to review that report?
        Ms. Burwell. I have not had a chance to review the report,
    but we discussed it briefly in Senator Johnson's questioning in
    terms of the relationship with GAO, and I mentioned it
    specifically proactively, because I think GAO is an important
    part of the partnership between the Executive Branch and the
    Legislative Branch on increasing efficiency and effectiveness
    in government.
        Senator Ayotte. I appreciate that, because in the report,
    it does identify particularly an area that OMB would have some
    oversight over and a role in going back to recommendations that
    GAO made in 2011 and 2012 in the appendix, updating where
    things are on those recommendations. And their specific issue
    is the OMB guidance calls for agencies to analyze whether their
    information technology investments are continuing to meet
    business and customer needs and are contributing to the
    agency's strategic goals. And that is something that the GAO
    has recommended that OMB take action on to prevent agencies
    from making duplicative investments in that area. And as you
    know from your prior experience, I am sure, those technology
    investments can really be very expensive. So making sure no
    duplicative investments are made across agencies in electronic
    case management, adjudication systems, and yet apparently OMB
    has not followed through on the GAO recommendations.
        So I know you have not seen the report, but I guess I would
    ask you to commit to addressing these recommendations if you
    are confirmed as Director.
        Ms. Burwell. Senator, the Chief Information Officer (CIO)
    role is something that actually has changed since I was last at
    OMB, and I think it is actually a very important and exciting
    change that has occurred in terms of the responsibility that
    OMB has to work across government on a number of things that I
    think you are mentioning, that I think are extremely important.
    I think we need to move from the hundreds of data centers that
    we have already gotten rid of to hundreds more.
        I think we need to think about the IT part of the role of
    OMB in a couple of different ways. One is about increasing
    effectiveness and efficiency, and I think that gets to the core
    of what you are talking about with the GAO report--and I think
    there are many places--and whether using the cloud is cheaper
    operationally. There are a number of things that can be done in
    that space that I think are important.
        The second thing is transparency and transparency in terms
    of technology I think has a number of different elements to it.
    It has elements that are related to how we serve the American
    people and let them know what is being spent, but also within
    government, when you can use information technology, one
    department can know what another department is spending on
    things and so we can move toward that efficiency and
    effectiveness through transparency.
        And the last area that I think is very important is
    innovation, because I actually think there is great opportunity
    when the Federal Government has had the opportunity to move
    data, whether that is what we all use in GPS or weather. Those
    are opportunities for innovation in the government.
        So I expanded a bit on what you mentioned because I think
    it is beyond efficiency and effectiveness as we think about
    that position and that role and what can be done.
        One of the important things I think we need to do though,
    is to make sure when we are moving toward transparency or
    thinking about those things, that we carefully target, so that
    we can do the cost/benefit analysis to achieve whatever it is
    we are trying to achieve.
        When we think about USASpending.gov, which there are issues
    with, what is the target audience that we are talking about? Is
    it actually people who are seeking funds or the American
    people? Because how you would design that site and how you
    would invest money in doing that I think will differ.
        Senator Ayotte. Well, I think that certainly we need to be
    in a position where the American people can understand clearly,
    so as you look at that site going forward, I would err on the
    side of making sure the American people can understand how
    their taxpayer dollars are being spent. And I appreciate your
    taking an interest on this case management issue, because I
    think that there is cost savings we could achieve there, and
    that is obviously important in light of our fiscal climate.
        The one issue I wanted to ask you about that I know has
    already been touched upon is the important role you have with
    the Office of Information and Regulatory Affairs, as Senator
    Portman asked and you are responsible for reviewing agencies'
    regulatory actions to ensure that the agency has adequately
    addressed all the information, risks, costs, and benefits.
        The reason I ask you about that is--how do you view your
    role-to-be in that regard? Because I have had numerous
    examples, one of them that I will raise to your attention is a
    potential rule that the Department of Labor (DOL) is issuing
    changing the definition of ``fiduciary'' under the Employee
    Retirement Income Security Act (ERISA) that will have a very
    dramatic impact on employee stock ownership programs across
    this country and many small companies that have this. And I use
    this as an example because it seems to me that the role of OMB
    in the factors that have to be reviewed, this happens to be a
    rule DOL issued, has withdrawn because of concerns that people
    have raised from the ground, and will be reissuing in July. But
    it seems to me that in your proposed new role that you have a
    very important position that you can raise these types of
    concerns up front so that we are not in this position and
    companies are not put in this position or, average Americans
    put in this position that are part of these plans.
        So can you let me know, first of all, how you view your
    role in that and how you will review these types of regulations
    to make sure you are fulfilling this function that we are not
    issuing regulations that are more harmful than helpful?
        Ms. Burwell. Senator, the issue of how OIRA--that process
    of when things come into OIRA, which would be the process that
    I would oversee if I am confirmed as Director, is something I
    would take seriously in terms of the application of how do we
    make sure we have the appropriate voices there.
        I think the other thing that OIRA does attempt to do is to
    at least have conversations with the departments as the process
    is going forward, so when we know about concerns or that sort
    of thing, we can have those conversations as we go.
        One of the most important things I think I can do in terms
    of that OIRA process working is to make sure that I have strong
    relationships with the Cabinet Secretaries so that the
    conversations--first of all, it is me setting an example for
    how I hope that the rest of the department would work, but also
    having those relationships where we can each pick up the phone
    and call. And so that will be an important part of my
    leadership.
        I think the other thing that will be important is strong
    management of an OIRA team.
        Senator Ayotte. Thank you very much, and I also am on the
    Budget Committee, so I might see you tomorrow as well. Thank
    you.
        Ms. Burwell. And I would just add on the issue, TechStat
    and PortfolioStat, two places where we are reviewing those IT
    projects, because I agree with you about the importance of
    those costs. And when I was in government before, I saw the
    incredible costs, and I have seen it in the private sector when
    people are trying to do IT changes. It can become incredibly
    costly.
        And so TechStat to review specific IT projects I think is a
    process that is going to catch some of those things early. And
    PortfolioStat is a means by which we look at the different
    pieces to make sure they interact well, are things that I think
    are very important to implement strongly and well.
        Senator Ayotte. I appreciate it. I know my time is up, but
    I think all of us having worked in government have had an
    experience where there is a substantial investment in a case
    management program, and then it does not do what it was
    purported to do. And so that is what we want to avoid across
    agencies in the Federal Government. So I appreciate your
    answers on that. Thank you.
        Ms. Burwell. Thank you.
        Chairman Carper. All right. Senator Baldwin, thank you.
    Welcome.

                  OPENING STATEMENT OF SENATOR BALDWIN

        Senator Baldwin. Thank you, Chairman Carper, and thank you,
    Ms. Burwell, for appearing before the Committee. Welcome to the
    Committee. I join a couple of my other colleagues on this
    Committee both sitting on the Budget Committee and this
    Committee, and as somebody who also on the House side sat on
    the Budget Committee, I am very familiar with the importance of
    the role of the OMB Director on the budget side of things. But
    I was really pleased to see in your testimony your emphasis on
    what you called the M side, the management side of OMB, because
    even with the best intentions in the budget process, if we do
    not have efficiencies and if we do not have an effective
    Federal Government, our budget work can be for naught.
        You are nominated for this role at a very exciting time, at
    a tremendously challenging time for our Nation. And I think
    about--daily, as a Senator, I think about the enormous
    challenges that we face in this country. I regard them as dual
    or twin challenges of stabilizing our debt and deficit without
    shortchanging our future, but also continuing in every manner
    that we can to move our economic recovery forward, grow our
    middle class again.
        Now, under President Clinton, we showed that these two
    goals can be accomplished, and I am encouraged that you were
    part of a team that helped preside over 3 years of budget
    surpluses. My first term in the House of Representatives was
    spent on the Budget Committee, and I remember--in fact, we
    talked about this--people worrying aloud about the dangers of
    running surpluses. And I would really like to see our country
    get back to having that as one of our primary worries.
        But that said, I wonder if you could just start by talking
    big picture and telling all of us what your priorities are for
    leading the Office of Management and Budget. What is your
    vision?
        Ms. Burwell. Thank you, Senator. As I think about the
    priorities, the first thing I should probably say is my
    experience always is you can think a lot about them; once you
    get into the job, one will be informed by what you find when
    you get in the job.
        But with regard to the particulars, where I would start, I
    would start at the first level, No. 1, with regard to what I
    would refer to as regular order and relationship, and I think
    those two things are very interrelated. And regular order comes
    to some of the issues Senator Portman raised and others have
    raised about timeliness from the executive branch,
    responsiveness, and then flowing through to however I can
    support the processes of the Budget Committee, the
    Appropriations Committee, to returning to that order in terms
    of the processes.
        I think relationships are an important part of that and
    that is something that I think you have heard as a theme
    throughout the conversation this afternoon. I think that is a
    very important part of how we get there.
        The second priority, if I am confirmed, would be to use
    both the M and the B of OMB to make sure that we are doing our
    best to deliver for the American people an economy that is
    healthy in both the short and the long term. And priority one
    under that is, I believe, a comprehensive approach to deficit
    reduction, moving through that, how we do that, and making sure
    that we can meet the commitments that we have made over time.
    And a part of that we have discussed is on the M side that
    efficiency and effectiveness.
        The third priority--and we touched upon it with Senator
    Portman a bit--is the institution. I believe that because I
    have the opportunity to go back to OMB, a place where I
    understand a little bit more about the institution, gives me
    the opportunity to commit to do my best to continue to build
    that organization.
        Senator Baldwin. Well, thank you. I wanted to just dovetail
    on a question that was asked a little bit ago--well, it was
    Senator Ayotte. In terms of transparency with regard to OMB's
    review of rules, timeliness and transparency, I mean, OMB has
    90 days to review most rules, 120 if the head of OMB and the
    head of the relevant agency agree to an extension. We know that
    some rules have been sitting at OMB for much longer periods of
    time with little information on where or why the process seems
    to have ground to a halt. So how would you approach this
    challenge of transparency and the need for the public to know?
        Ms. Burwell. I think that there are a number of different
    pieces to that, and one of them is understanding why the rules
    are there, the ones that have been there for an extended period
    of time. Is it related to complexity or is it related to other
    issues? What are the critical path things that you can do to
    break those loose if you can?
        There is the overall: what is the timetable for rules as
    they come in and how should we think about signaling, perhaps,
    when rules come in that are of great complexity while also
    making sure, to your point about transparency, that we are
    actually communicating, that the expectation is that because of
    the complexity of the rule, that is what we are doing.
        And so I think it is--a little bit of this is about getting
    to communicating clearly where there are issues and what those
    issues are.
        I think with regard to transparency and the American
    people, I think there are some tools that we are using with
    regard to the ability for people to comment. I think that is a
    part of transparency, using technology as a tool there. And
    what we need to understand is what is not working about that.
    Is it who can access? Where are the parts? And so if I am
    confirmed, I hope to, one, look closely at the examples that
    you are giving, understand why that is happening, and then as a
    general point, think through how we can communicate more
    quickly and often where we see these things happening.
        Senator Baldwin. Thank you.
        Mr. Chairman, I want to get a last question in the record.
    Feel free to followup as my time will elapse before you may
    have the chance to fully respond. But in your testimony, you
    stated how important it is that we are operating the government
    in the most efficient and effective manner possible. And I
    agree, and I believe that one mechanism to do this is the use
    of something called Energy Savings Performance Contracts
    (ESPCs). These contracts allow Federal facilities to improve
    their energy efficiency using private sector investments with a
    guarantee of energy savings. This contracting vehicle has been
    supported and encouraged by the last four Administrations, but
    is consistently challenged because it is not a typical or
    traditional contracting vehicle.
        So I would like to hear, either now or in the days to
    follow, your position on the Energy Savings Performance
    Contracts, and will they be encouraged by the OMB under your
    leadership?
        Senator Carper. Ms. Burwell, feel free to go ahead and
    respond at this time.
        Ms. Burwell. Thank you. With regard to the issue of the
    energy saving contracts, having been in the private sector and
    seen some of the opportunities that exist with regard to the
    type of investment and the return on that investment that you
    can achieve over a period of time, the concept of having means
    by which we as a government can get those investments made, get
    the savings, which I think is about efficient and effective
    government, and also a contribution to the environment, I think
    those are very important concepts. And how one thinks about
    application of those, I think at OMB that is the one thing that
    I would want to make sure I understand.
        I am enthusiastic and excited about energy savings, how one
    determines that return on investment over a period of time, and
    ensuring that those investments in the way the contracts are
    done really do focus on the energy element.
        So those are the kinds of things that I would like to be
    able to consider, if I am confirmed, in looking at this.
        Senator Baldwin. Thank you.
        Chairman Carper. Thanks.
        Senator Levin has joined us, and I am going to recognize
    him next.

                   OPENING STATEMENT OF SENATOR LEVIN

        Senator Levin. Thank you very much, Mr. Chairman, and
    welcome to our nominee. I know you have talked about the
    deficit and how to go about addressing it and how you would
    recommend that we proceed with deficit reduction, whether we do
    it just by looking at the spending side or whether we also look
    at the revenue side as well.
        Can you give us your general view as to whether or not
    there ought to be either an exclusive focus on spending, which
    is what the House is proposing to do, or whether we have a more
    balanced approach, which would include both additional revenues
    and targeted spending reductions?
        Ms. Burwell. Senator, it is my belief that in an effort to
    get to the levels of deficit reduction that I believe we need
    over the long term, we need to have a combination of spending
    reductions as well as revenue to get to the numbers that I
    think we are trying to do, because I think the most important
    thing is that we continue on that path of reduction of the
    debt-to-gross domestic product ratio. We have started on that
    path. We need to continue on that path and think about how we
    do that in a way that connects to the American people.
        Each of these numbers and things that we talk about are not
    ends in and of themselves. They are related to people, their
    lives and their jobs, and things like our Nation's national
    security.
        Senator Levin. You talked about GDP. The percentage of our
    GDP that comes to the Federal Government in the form of
    revenues, we have been told, is at a historic low, something
    like 14 or 15 percent. Typically it is about 18 percent or 19
    percent of GDP. Are you familiar with those numbers and that
    approach to looking at revenues as a percentage of GDP?
        Ms. Burwell. Yes, sir, I am familiar with the different
    numbers at different points in time.
        Senator Levin. And is it true that we are at a very low
    point in terms of revenues when you look at revenues as a
    percentage of our economy, of our gross domestic product?
        Ms. Burwell. Yes, sir. The numbers when I was in the
    Clinton Administration, on average in the 3 years that we
    balanced the budget, it was 20 percent.
        Senator Levin. And do you know what they are now?
        Ms. Burwell. They are in a much lower range, in the teens,
    around, as you stated----
        Senator Levin. Is it about 15 percent?
        Ms. Burwell. Around 15 percent.
        Senator Levin. Something like that.
        Now, in terms of the corporate contribution, corporate tax
    payments as a contribution to the total revenues, corporate
    profits are now at an all-time high. Corporate taxes now
    account for a historically low percentage of all Federal
    revenues. Something like 9 percent, I believe, somewhere
    between 9 and 10 percent of total revenues coming into Uncle
    Sam come from the Corporate world.
        Do you believe that additional corporate revenues need to
    be part of the revenue picture, which in turn needs to be part
    of deficit reduction?
        Ms. Burwell. Senator, while I would certainly defer to my
    colleagues at the Treasury Department, having served at the
    Treasury Department on matters of tax, the broad issue of
    corporate tax issues, I think that I would--what I believe is
    that we can broaden the base and that we can work to change
    loopholes in the corporate area.
        Senator Levin. And if we do go after corporate loopholes,
    particularly the ones which are, in my judgment, egregious,
    indefensible, even if there were no deficit--I am talking about
    the way in which revenue to corporations here has been
    transferred to offshore tax havens, for instance, to avoid
    paying taxes altogether, and there are a number of other
    loopholes which I think are egregious and are bad and
    unjustifiable and serve no economic purpose, even if there were
    no deficit. But assuming there are such loopholes, assuming for
    the purpose of discussion that there are loopholes which should
    be closed, not just in order to broaden the base or not just
    for simplicity, but because they are unjustified, OK, on that
    assumption do you believe it is appropriate to look at the
    closing of those loopholes as a revenue raiser to reduce the
    deficit?
        Ms. Burwell. Senator, the question of overall revenues and
    how one thinks about the corporate piece as well as the
    individual piece I think needs to be thought of in the context
    of a broader package.
        Senator Levin. OK. Let me ask you about the independent
    agencies--first of all, do you support the concept of
    independent agencies, meaning agencies that by statute have a
    measure of independence from the President?
        Ms. Burwell. Yes, sir, I do.
        Senator Levin. And would you agree that independent
    agencies, including those involved in financial regulation and
    enforcement and consumer product safety need to have that
    degree of independence?
        Ms. Burwell. The Congress has spoken to that matter, and
    that is something that, if I were confirmed, would want to
    support the implementation of.
        Senator Levin. And is it your understanding that
    independent agencies now have cost/benefit analyses that are
    adequate?
        Ms. Burwell. Senator, that is a point we have had the
    opportunity to discuss earlier today, and that I think is a
    point of question in terms of the quality of that cost/benefit
    analysis.
        Senator Levin. So you have not reached a conclusion as to
    whether the current cost/benefit analyses that independent
    agencies use are adequate or inadequate?
        Ms. Burwell. No, sir, I have not. I have not had the
    opportunity to be exposed to, I think, some of the information
    that would be important to make that determination.
        Senator Levin. I hope when you look at that you will
    remember the answers that you gave relative to their
    independence. Will you?
        Ms. Burwell. Yes, sir. I think the question of independent
    agencies and cost/benefit analysis and the question of how and
    who determines that cost/benefit analysis is--I will repeat
    what I said earlier. I apologize for repeating. But I think
    what is important is to understand, I think what everyone wants
    is cost/benefit analysis that is appropriate and rulemaking
    that is appropriate and of high quality in the financial area
    and in this area of the independent agencies. And the question
    that I have is: What is the best way to get there? And it was
    raised that there are legislative approaches, as one way, and
    what I would love to do is understand what is not happening and
    what do we think is the best way to achieve that.
        Senator Levin. I have been a strong supporter of cost/
    benefit analyses since I came here, and as a matter of fact,
    believe it or not, part of my campaign to get here related to
    the question, that question. My wife never thought I could turn
    that into a campaign issue, but I did--and got here anyway 34
    years ago. But my point here is that I hope that--this is going
    to be a big issue in front of this Committee. It was last year,
    and I think it probably will come up again. And I think before
    we take that up, Mr. Chairman, I would hope that we would get
    our new OMB Director's opinion as to whether or not the cost/
    benefit analyses that are currently being used--and some people
    forget that--by independent agencies are adequate or not. So I
    hope she will get into that issue promptly upon her
    confirmation, which I think all of us or most of us look
    forward to, and we commend you and congratulate you on your
    nomination.
        Thank you, Mr. Chairman.
        Chairman Carper. Thank you. I have just a quick question.
    When were you first elected to the Senate? What year was that?
        Senator Levin. Before you were born. [Laughter.]
        Chairman Carper. Senator Levin was recalling how he was
    back in Michigan during the break, as he knows, and he was
    gracious enough to host me and take me up along the northern
    border of our country with Canada, which I think has about
    almost 1,000 miles of water border. I learned a lot from him,
    and it was an interesting and enjoyable experience. Thirty-four
    years ago when he was elected to the Senate for the first time,
    the hotel that I stayed in was the hotel where they had their
    election night celebration. It was closed later on for like
    maybe 20 years, and has since been refurbished and reopened. I
    think it was a Westin hotel. His last, most recent election
    night celebration was back at that same hotel some 30 years
    later.
        Senator Levin. Proof of the comeback of Detroit, by the
    way. You do not read much about the positive side of the
    comeback.
        By the way, I was elected--I better quickly look over at
    Senator Pryor here. When I was elected, there was another Pryor
    who had just been elected to the U.S. Senate, a Pryor who we
    love and whose wife, Barbara, we love as well. All the Pryors
    we love.
        Chairman Carper. Yes, that is for sure.
        Senator Levin. The prior Pryors and the current Pryors.
    [Laughter.]
        Chairman Carper. Thank you, Senator.
        Ms. Burwell. Thank you, Senator.
        Chairman Carper. All right. Senator Pryor welcome aboard.

                   OPENING STATEMENT OF SENATOR PRYOR

        Senator Pryor. Thank you. And speaking of war stories, I
    know you are a Senator Byrd fan, and welcome to the Committee,
    and we appreciate you being here, and West Virginia roots, and
    maybe my favorite Senator Byrd story is the story that Senator
    Carper told me several years ago. He is from West Virginia. He
    was born in West Virginia. And he was driving through West
    Virginia and seeing some of his family. And he gets on his cell
    phone, and he calls Senator Byrd and says, ``Senator Byrd, you
    will never guess where I am.'' He says, ``I am in West Virginia
    on the Robert Byrd Highway.'' And Senator Byrd said, ``Which
    one? ''
        Ms. Burwell. ``Which one? '' [Laughter.]
        Senator Pryor. Which I always thought was very fitting for
    Senator Byrd. I love that.
        Listen, let me talk to you, if I can, about kind of a well-
    worn phrase that we hear in Washington that people love to talk
    about but we do not ever seem to do enough about, and that is
    the phrase of ``waste, fraud, and abuse.'' We hear that phrase
    all the time. We all talk about it from time to time. Everybody
    loves to talk about waste, fraud, and abuse, but it just seems
    to me that we as a government, as a Congress, as an
    Administration, we do not do enough about it. And I feel like
    OMB is a place where things can be done about that.
        One thing I am curious about is when you see CBO or GAO or
    some think tank or somebody, whoever it is, that comes out with
    these studies and these analyses of how we are wasting money,
    how we can be more efficient, how we can do things better, and
    that really kind of covers the waterfront.
        Does OMB take those and sort of take those to heart and try
    to allow those to shape their policy and their priorities and
    their reform efforts? Or does OMB just defer to Congress and
    say, well, Congress needs to fix that, that is not our
    headache?
        Ms. Burwell. The GAO report that came out today will be an
    important contribution to how OMB thinks about those
    priorities, and I think the prioritization comes through both
    conversations and reports. Certainly this Committee and
    actually the Chairman and the Ranking Member have both focused
    on these issues of waste, and those are lists that OMB does
    think about and consider, and whether that is how some of the
    progress has been made on improper payments, while it is not
    enough, improper payments have gone from 5.4 to 4.35 percent. A
    hundred billion is still too much. We understand that.
        But with regard to that question of prioritization, there
    are a number of inputs that are about how we look at finding
    good opportunities that are both good at cost saving,
    increasing the value for the taxpayers' money, and achievable,
    which I think is an important consideration about how one
    thinks about prioritizing. I think we all want to get rid of
    waste, fraud, and abuse, but how you go about thinking about
    what we can achieve, because I think what is important is
    points on the board. And so that is how I think about that
    prioritization, and I think OMB uses a number of these tools to
    do that.
        Senator Pryor. I appreciate you saying that. I know
    earlier, Mr. Chairman, I missed the questioning by Senator
    Johnson and Senator Heitkamp as well about OIRA, and one of the
    things that I am concerned about with OIRA is that their
    staffing level is at an all-time low, and, it seems to me that
    an agency is really not going to be fully effective if they are
    not fully staffed. It is one thing to have a vacancy here or
    there, and that can be hard enough, but really, it seems like
    that agency, that office, cannot function anywhere close to
    where it needs to.
        So what can you do, what can we do to try to make sure they
    are fully staffed and fully equipped to do their important
    tasks?
        Ms. Burwell. Senator, if confirmed, one of the first things
    that I would want to do is think about the team. When I enter
    into organizations, one of the things I think is most important
    is the team and what you have and what you do not have. And if
    confirmed, that is something very quickly--the team across OMB,
    I think there are a number of positions in places and how does
    one think about that to make sure we put a strong team in place
    across the board at OMB. And so that would be a priority.
        With regard to the second part of your question, which is,
    what can we do, one of the things that I hope is that we can
    have a dialogue and I can have an opportunity to call Members
    of this Committee for support and help. And as long as I am
    articulate about what the needs are and what those needs would
    produce in terms of some of the results that we have been
    talking about. So there is a part of this that I own and then a
    part of it that I would look forward to working with the
    Committee to make sure we get the reality of good people doing
    good work.
        Senator Pryor. Right. To change gears on you, one of the
    things that you know better than most people--is that if you
    look at all of our Federal spending, roughly about two-thirds
    is mandatory spending or entitlement spending. And here in the
    Congress, we have tightened up on our discretionary spending
    quite a bit with the Budget Control Act of 2011. But we have
    found it difficult to really pursue the rigorous reforms we
    need and sensible reforms we need in our entitlement programs.
    And I would hope that would be a priority for the
    Administration, and I hope that we would do that in a
    bipartisan way. I think that is the only way you get it done.
        But let me, if I may, Mr. Chairman, just close with
    something that we talked about yesterday in my office, and that
    is, I have been here for 10 years, going on 11, and for 9 of
    those 10 years, we basically have not followed the Budget Act.
    Either we did not get a budget done and/or we did not get our
    appropriation bills done; or we did an omnibus or a continuing
    resolution (CR) or a mini-bus, or some combination. I think 9
    out of the 10 years basically we have had to do that. And that
    is evidence to me that the system--the law we have on the books
    right now is just not working. And, my guess, it is probably
    the politics more than anything that is preventing it from
    working.
        But I would hope that the Congress and the Administration
    would work together to possibly, if we need to, go in and
    rewrite the Budget Act. Apparently Senator Byrd wrote it back
    in the early 1970s, after a couple years of false starts and
    trying to get it done. And that is one thing we talked about
    yesterday. And I am not asking for a commitment out of you or
    the Administration on this, but I would hope that you all would
    consider making budgeting--and that includes not just the
    dollars but the process of priority, so that we can have a
    better way to budget, to account, and to check on the
    effectiveness of government spending.
        I know that we are going to be in a period of budget
    tightening over the next 10 years, and, I think if we have a
    budget process that works better, that makes the whole thing
    work easier.
        I do not know if you had any comments on that.
        Ms. Burwell. Well, Senator, I probably should have been
    studying a little more last night for my hearing today, I have
    to say your question stimulated--I spent quite a bit of time
    last night just starting to think about the point. And the
    thing that I was trying to focus on--and I think that is
    something that would be very important to have conversations
    and dialogue with the Congress, is why is it not--what are the
    elements that are not working? Because the question is: What
    can process solve and what can process not solve? Because I
    think that is what you were getting to, is the question of is
    it the structure and the process that is wrong, or what?
        And so that was something that I did start to at least
    reflect and think upon, and since I have not been here, it is
    something, though, that I will look forward to learning more
    about why people think that the process is not working and what
    are the critical things, and then how do you think about
    changes to process that would help that or support the things
    that are not currently happening.
        Senator Pryor. Mr. Chairman, that is all I have. Thank you.
        Chairman Carper. Thank you Senator Pryor.
        I have not asked any questions yet, and I am going to do
    that at this time. While Senator Pryor is still here, he
    raises, again, the issues of waste, fraud, and abuse and
    efficient spending. He said we do not do enough about it, we
    never seem to do enough about it. And this is a huge enterprise
    of our government. It is the largest, most successful Nation in
    the world, and we are spending all over the country and all
    over the world in different ways, and it is hard to get our
    arms and our heads around it.
        But as we seek to put our Nation back on a more fiscally
    responsible path, it is not just the responsibility of the OMB
    Director. It is not just the responsibility of the executive
    branch, as we know. It is not just the responsibility that
    falls in our laps as well. It is a shared responsibility.
        One of the great things about serving on this Committee
    with Senator Pryor, Senator Coburn, Senator McCain, and others
    is that we actually have the opportunity here--this is an
    oversight Committee. We deal with homeland security in a big
    way and have for about 10 years. But it is also--its history is
    as an oversight Committee. And we have an opportunity here to
    perform really effective oversight. Almost every time we have
    an agency that comes before us and testifies, whether it is
    Defense or Homeland Security, whether it is Health and Human
    Services (HHS), whomever it might be, I always ask them at the
    end of the hearing ``What do we need to do better to help make
    sure that we spend our taxpayer dollars more effectively? ''
    Almost without exception, they say, ``Do more oversight.''
        That is why we try to have four Subcommittees. They are
    basically oversight Subcommittees. The full Committee, it is
    largely an oversight Subcommittee that is appended to this huge
    Homeland Security and Governmental Affairs responsibility, too.
    But we have the ability to leverage the capability of one
    Committee, and we do it by working with GAO. Their high-risk
    list comes out every 2 years, high-risk ways of wasting money,
    and we almost use that as our to-do list. We have the
    opportunity to work with you, your predecessors, with your
    team. We have the opportunity to work with all the Inspectors
    General (IGs), and I might just say there are about six or
    seven departments that do not have an Inspector General. We
    have Acting Inspectors General. It is not a good situation. We
    need people that are confirmed. We need good people. And when
    the Administration nominates, we need to confirm them; or if
    not, if they are totally incapable, then we need to make that
    clear as well.
        We had the opportunity to not only coordinate and cooperate
    and collaborate with GAO, OMB, and the Inspector Generals, but
    also there is a bunch of nonprofit groups around the country
    that basically want to do what we want to do. They want us to
    stop wasting, and start effectively spending taxpayers' money.
        I think we have the opportunity here, Democrat and
    Republican--this is not a very partisan Committee, as you
    know--to set aside politics and just figure out how we can get
    a better result for less money in almost everything that we do.
        I am struck by the number of people who have said to me, in
    recent months, given my new responsibilities in this Committee,
    people have said, with regard to having to pay more taxes, even
    as we approach April 15th, people have said, ``I do not mind
    paying more taxes. I do not want you to waste my money.'' That
    is what they say. ``I do not mind paying more taxes. I just do
    not want you to waste our money.'' That is our challenge. And
    it is not just our responsibility. It is a shared
    responsibility. We look forward to working with you and your
    team.
        I want to followup on what Senator Pryor said. I want to go
    back in time about 15 years, and you were in the Clinton
    Administration. Bill Clinton was President. And I think, as I
    understand it, he asked Erskine Bowles to lead an effort with
    the Republican House and Senate to see if we could reduce the
    budget deficit and maybe even balance the budget. And Erskine
    was asked by the President to essentially lead an effort within
    the Administration to see if we could not find common ground to
    get us to a balanced budget or a more balanced budget.
        Would you just kind of go back in time, walk us back--I
    think you were in the White House at that time. Walk us back in
    time to the dynamic that existed. Why were we successful? We
    had a very strong economy. We do not now, but it is
    strengthening, I think. But what was the dynamic that enabled
    us to move from really substantial deficits, $200 to $300
    billion, to a balanced budget four--not one but four in a row?
    What was that dynamic? And how do we learn--what lessons are
    replicable or transferable from that experience to where we are
    today?
        Ms. Burwell. So one of the things that I think happened at
    that period in time is that when we saw that you actually could
    achieve--that it was within reach, you started understanding
    that when you saw the numbers that it was within reach, a
    balanced budget was in reach, and how one thought about what to
    do. And that conversation was put in terms of the long-term
    commitments that we had, thinking about the economy in the
    short and the long term. And it is probably a phrase that some
    may not remember, but there was something called the ``Social
    Security lockbox.'' And the reason that came about was the idea
    that what we wanted to do was to start paying down, because by
    starting to pay down, you were eliminating the debt at that
    time, what you were doing was creating the space and ability to
    make sure that we as a Nation can meet some of our long-term
    commitments and the commitments right now that we are very
    focused on in the entitlement space. I think that was an
    important part.
        But with regard to the negotiating and how we actually got
    there, which Erskine was the leader of the team at that point
    in time, there are a couple elements that I think I learned
    from. One was honesty and integrity in process, your best to be
    able to have a relationship where you could pick up the phone
    and call and say what you cannot do and what you can do and it
    be respected that it is a confidential matter that this is a
    part of what we can do to build the trust to get there.
        I think a second thing that was important is prioritization
    and using the processes to create that prioritization. When one
    reflects on the fact of what Senator Pryor said, that we have
    not used the budget process in its full over such an extended
    period of time, that is the means by which we as a Nation have
    to do the tradeoffs. Otherwise, things come on one-off. And
    when things come in their pieces one by one, it is much harder
    than when you put it in a package. Why does everyone suggest
    Base Closure and Realignment Commission (BRAC) processes for
    all kinds of decisionmaking? It is because when we bring it all
    together, that is when we have to act as a Nation, not as
    individuals. Of course, you need to represent your district and
    your State, but also that overlay of representing the Nation
    together. So prioritization was a second element.
        Then the third element in terms of what I learned was
    listening--listening and trying to really hear and understand,
    knowing what you need--and that was part of your own
    prioritization, but listening to understand others. So those
    are some of the lessons from that period in time.
        Chairman Carper. We have an interesting dialogue here in
    the Congress and the Senate. I think we are getting along
    better in the Senate than we have in a while. I think they
    still have their struggles in the House, but I am encouraged by
    the mood here in the Senate and our ability to find common
    ground, for example, on the spending plan for the balance of
    the year, the continuing resolution, and a robust debate, not a
    consensus, on a budget resolution for the next 10 years, but
    just a very good, spirited, and healthy debate nonetheless.
        When we say to our Republican friends, we need more
    revenue, we go back to those 4 years when we had balanced
    budgets, and if we look at revenues as a percentage of GDP, it
    was about 19.5 to 20.5 percent for each of the 4 years. Last
    year I think it was closer to 16 percent. Even with the fiscal
    cliff revenue package adopted, I think we will only be up to
    about 18 percent of Federal revenues as a percentage of GDP by
    the end of this 10-year period.
        We say to our Republican friends, well, we need more
    revenues if we are serious about really balancing a budget or
    coming close. They say, well, we need some entitlement reform.
    To his credit, the President has said what we need is
    entitlement reform. He said we need entitlement reform that
    saves money and that saves these programs for the long haul.
    And I will add these words, but I think they are certainly felt
    by him. As we do that, we need to look out for the least of
    these in our society. I totally agree with that.
        I spent some of the recess we have just concluded on the
    road. I mentioned earlier I was up along the Canadian border
    with Senator Levin and others. I also went over to Minnesota
    and went to a place called Rochester, and Rochester is where
    the Mayo Clinic is. One of the things I have done in the last
    couple of years as a member of the Finance Committee--with one
    of my other hats on, Medicare and Medicaid oversight--is to
    find out how do they get better health care results for less
    money at Mayo? How do they get better health care results for
    less money at the Cleveland Clinic, which covers most of
    northern Ohio? How do they get better health care results for
    less money at Geisinger, which covers a big part of central
    Pennsylvania? I have been out to California and spent time with
    folks at Kaiser Permanente asking the same kind of questions.
    And I spent some time at UnitedHealth while I was in Minnesota
    last week.
        If we do not do something real and substantial on figuring
    out how to get better health care results for less money or the
    same amount of money in Medicare, we are doomed.
        We had Alan Blinder who came and testified before the
    Senate Finance Committee over a year ago now, about a year and
    a half ago, and he and a panelist were before us. Alan Blinder
    is a former Vice Chairman of the Federal Reserve when Alan
    Greenspan was our Chairman. He is now back at Princeton
    teaching economics. I said to him, ``Dr. Blinder''--he
    mentioned in his statement, he said, ``The 800-pound gorilla in
    the room on deficit reduction is health care. Unless we do
    something about the cost of health care, reining that in, we
    are doomed.''
        And when there came a chance for us to ask questions, I
    said, ``Dr. Blinder, you just said in your statement the 800-
    pound gorilla in the room on deficit reduction is health care.
    What do you recommend we do? '' And he thought for a moment,
    and he said--I will never forget what he said. He said, ``I am
    not an expert on this stuff. I am not a health economist. But
    here is what my advice would be to you.'' He said, ``Find out
    what works and do more of that.''
        That is all he said. ``Find out what works and do more of
    that.'' I will never forget him saying that. And it applies not
    just to health care costs, Medicare and Medicaid. It really
    applies to pretty much everything we do in the Federal
    Government. Find out what works and do more of that. Find out
    what does not work and try to do less of that. In a resource-
    constrained world, we especially need to do those things.
    Others have raised with you the issue of duplication. You and I
    have talked a little bit about that. This is something Senator
    Coburn is especially passionate about.
        Sometimes it makes sense for us to have duplication, for
    example, in training programs, maybe we want to train veterans,
    maybe we want to train people that are disabled or we want to
    train people who are coming off of welfare. It is
    understandable how you would have different training programs
    that might cover different parts of our population. But we have
    to figure out which ones are working and do more of those. The
    ones that are not working as well, either end them or fix them.
    That is the way I look at it.
        With that having been said, this is kind of an open
    question for you, but just sort of reflect on those thoughts
    that I just shared with you, and anything that comes to mind
    for you to guide you in your efforts and, frankly, to guide us
    and help us to work together on this. We have to figure out a
    way to do this together. Tomorrow the President's budget will
    come out. We welcome that. I am encouraged to think that it may
    look a little bit like a grand compromise, which I am anxious
    to try to embrace and hopefully embrace with others, including
    Dr. Coburn. Please.
        Ms. Burwell. I would focus on the point you raised, which
    is the issue of mandatory spending as part of what is driving
    the major part of the issue, is one that deserves great focus
    because it is so much a part of the problem. And as we go to
    that health care point, one of the things that excites me most
    about what you said with regard to the examples at Mayo and
    Cleveland, some of which I have learned a little bit about, is
    that what you described actually as a part of what I believe is
    so important to the solution because it is not simply about
    government spending, it is about what is happening in the
    overall economy on health care spending.
        And so when I think about the issues, while there will be a
    spectrum and a continuum of things that need to be done so that
    we can make progress on the costs of Medicare over time as a
    Nation, the things that are the best because they put us on a
    positive cycle and not just the government but the private
    sector are those things that bend the cost curve. And what was
    exciting about what you said was you were focused on the things
    that they were doing that are actually bending the cost curve,
    changing the cost structure.
        And examples that I have experienced, I had the opportunity
    to be on a university health center board when I was in Seattle
    and saw the institution trying to implement information
    technology, so using it in the office. And so it was part of
    the transition in the costs and figuring out how to change
    behaviors, because it means changing behaviors in a doctor's
    office. And then now that I am in Arkansas, I have the
    opportunity as part of the hospital system I am in, the Mercy
    system, it is fully done.
        And so I am able to receive the results of my children's
    tests on my e-mail at night. There is not a nurse that has to
    call so that I will know if the child has X or Y and know what
    the followup steps. If it is appropriate, I get a call, but you
    think about the efficiencies that are created, and the quality.
    I have all that information in one place. If I want to log on
    right now, I can see all the tests. Also, in terms of the
    quality and cost savings, when I go in, whether I have been to
    any part of the Mercy system, they can pull up every test I
    have had. They know I had the flu. They know that information.
    And it just creates incredible efficiencies.
        So those are the types of things, as I think about, it is
    an incredibly important issue, like to focus on the things that
    can help both the private sector and government, because of the
    cost shifting and the bending of that cost curve. So that is
    how I start to think about those issues.
        Chairman Carper. Good. Sometimes I tell my colleagues that
    I wish--and others, I wish I had only one issue to focus on,
    and that is health care and to figure out how do we get better
    health care results for less money because it is so important
    for everything we do, in terms of a vibrant economy, being able
    to compete with other nations like Japan where they spend half
    as much, 8 percent of GDP for health care. We spend 16, to 17
    percent. They get better results. They cover everybody. How can
    they be that smart and we be that dumb?
        But what I have sought to do is to see where there is
    consensus--I mentioned a number of major health care providers
    that are doing really exciting and smart things with respect to
    the delivery of health care. We have also invited health
    economists and others to come in just to meet with my staff and
    me and some of our colleagues. When looking to find where these
    circles overlap, concentric circles overlap, and it seems like
    among the smart things that we hear about are, No. 1, figure
    out a way to get away from the stovepipe delivery. One of the
    ways to do it is electronic health records. We have something
    in addition to that called the Delaware Health Information
    Network in my State, which complements electronic health
    records, in order for providers to function not as isolated
    stovepipes but as a team.
        Second, prevention and wellness are key. Obesity is
    literally killing us, literally and figuratively. A third of
    our population. Most of them do not realize they are obese,
    that their families are obese, and what the consequences of
    being obese are. If you look at obesity and tobacco use, you
    look at end-of-life care, a tough issue, but one I think that
    we need to come to grips with in a compassionate kind of way,
    the opportunities are just enormous for us to provide better
    care and for less money.
        Even with respect to the issue of defensive medicine, out
    of the University of Michigan--they played a tough game last
    night against Louisville, who also have come up--I am an Ohio
    State graduate, so it pains me to say this, but they came up
    with a really good idea a number of years ago called ``Sorry
    Works,'' you may have heard of, at the University of Michigan,
    you are my doctor and I am your patient, you perform a
    procedure, screw it up, I know it, you know it, and before I
    can sue you, we have the opportunity to meet as two human
    beings. You can apologize, offer financial remuneration for my
    discomfort, pain and suffering, loss of wages and so forth.
    Nothing that you say can be used against you in a court of law.
    And I can accept or reject it, but that conversation takes
    place and it reduces dramatically the incidence of medical
    malpractice lawsuits. They also found out that it reduces the
    incidence of defensive medicine, and it leads to better health
    care outcomes. That is the University of Michigan, a
    demonstration, if you will, for a number of years, called
    ``Sorry Works.'' That idea has been taken and put on steroids,
    up in Illinois by a fellow named Tim McDonald, doctor, lawyer,
    and he has a project called ``Seven Pillars'' which really
    takes that idea of ``Sorry Works'' and puts it on a larger
    scale. We have 2 years of excellent data, and it demonstrates,
    conclusively that we can reduce the incidence of medical
    malpractice lawsuits, reduce the incidence of defensive
    medicine, and they demonstrate better health care results. I
    mean, it is the trifecta! And it is the kind of idea that we
    want to be able to spread across the country. The
    Administration supported our efforts. We support their efforts,
    too. Take ideas like that that work and spread them like
    wildfire throughout America. And take ideas like Seven Pillars,
    bring it to Delaware and other States. But those are all parts
    of the solution.
        As we focus on better results for less money or the same
    amount of money in health care is one that I think has great
    potential for us, and we need to particularly focus on that.
        In the past, you worked for a little bit, sometime in the
    1990s, I think, at McKinsey & Company, a management consulting
    firm with a great reputation. Any lessons learned from that
    experience for you that you bring to your current
    responsibilities, if you are confirmed?
        Ms. Burwell. In terms of my McKinsey experience, one of the
    most important things I think I learned was client service,
    which is a topic that has come up in a number of different ways
    in this conversation, and the idea of responsiveness and
    listening to the client.
        More broadly, I think McKinsey was the start of some
    lessons that I have had the opportunity to learn when in the
    private sector that are related to things like when thinking
    about how to use an organization to address a problem, think
    about strategy, structure, and people.
        A second lesson is clear and measurable goals for impact,
    and so that is a part of that first one, but really
    articulating what is it we are trying to achieve and really
    deeply focusing on impact. I think you heard a little bit of
    that when I was talking about what are the targets that we are
    trying to use, what is the impact we want to achieve as we
    think about transparency. Transparency in and of itself is a
    positive thing, but is it the outcome that we are looking for?
    So that measurement and focus on impact would be the second
    lesson that I think I have learned.
        And the third--and this is an extension for McKinsey
    through my current role--is the importance actually of culture
    and that leaders actually drive culture, and that often culture
    is as important a part of achieving the types of things we are
    talking about in terms of cost savings, efficiency and
    effectiveness, creating a culture and an institution of that.
    They are as important often as the rules, because sometimes
    they get you more, because if people are thinking about it and
    being a part of it, they consider it what they do, they take
    pride in making things the most efficient and effective. They
    take pride. It is part of what they do. And so this issue of
    culture I think is one that you cannot overestimate how
    important it can be to achieving whether it is a healthy,
    thriving OMB or the types of cost savings and efficiencies that
    we are talking about that we think are so important.
        Chairman Carper. It is ironic that you would mention that.
    When I was a kid growing up in West Virginia, in Beckley, in
    Hinton, later on in Danville, Virginia, my dad used to say to
    my sister and me--we would have chores to do in the house, in
    the yard, and in our garden. And he was always saying to us,
    when we did not do our chores very well, he would say, ``If a
    job is worth doing, it is worth doing well.''
        He said it often. He was an old chief petty officer in the
    Navy, tough as nails. He did not say it nicely. But he said it
    a lot, and one of the things, my takeaways from that experience
    was if a job is worth doing, it is worth doing well. And I like
    to say everything I do I know I can do better. If it is not
    perfect, make it better. And I talk a lot about culture.
    Believe it or not, in my role on this Committee, I talk a lot
    about culture. And we have in too many cases the culture of
    spendthrift in Federal Government, and we need to replace
    that--with culture of thrift. Everything we do, say, ``How do
    we do this better? Is there a way to do this better, provide
    better customer service, do it in a more cost-effective way?''
    So that when people say, ``I do not mind paying more taxes, but
    I just do not want you to waste my money,'' then they will say,
    ``Well, things are different. We have a new policewoman on the
    job at OMB and some new leadership on this Committee as well.
    Culture, I think you are right, it is just hugely important.
        I asked you about how your work at McKinsey has helped you,
    and you kind of morphed into, I think, responding how your time
    both at the Gates Foundation and Walmart has helped prepared
    you for this job. Is there anything you want to add in terms of
    your foundation work with Bill & Melinda Gates and Walmart as
    it helps prepare you for this work?
        Ms. Burwell. I think the other element that the time that I
    have spent at both the Bill & Melinda Gates Foundation and the
    Walmart Foundation has done in terms of preparation is my
    experience around grantmaking, and that has two elements to it
    that I think are helpful and important.
        One is that I spend much more of my day saying ``no'' than
    ``yes.'' There are many wonderful things that are happening in
    the world, and even a foundation as large as the Bill & Melinda
    Gates Foundation, the vast majority of requests are actually
    noes, and so that experience of how to respect that there are
    incredibly wonderful things going on that people are coming to
    you about, but saying no in a respectful way, respectful of
    their time, respectful of their ideas and their energy. And so
    I think that is an important part of the job.
        The second thing I would say is actually doing grantmaking,
    how one thinking about spending money for impact, and that
    experience is about what is the strategy, how does this
    spending connect to that strategy, how am I clearly focused on
    impact, what are the strengths and weaknesses of what I am
    looking at? And on grants, I would send back--if someone sent
    me a grant report or a proposal for a grant and it did not have
    weaknesses, it would go back, because if you cannot articulate
    the weaknesses--I do not believe that there is any thing that
    really does not have weaknesses. And that is part of that
    quality management for impact, not just recognizing the
    strengths but the weaknesses.
        And so I think the grantmaking experience is one that I
    think is relevant to the work that we do every day at OMB.
        Chairman Carper. All right. As you have been briefed by OMB
    staff, what has stood out as maybe some of the areas where you
    think or others think that our Federal Government has made some
    progress since you last served? Just mention a couple.
        Ms. Burwell. Since I was last here, I actually have seen
    good progress on some of the issues on the M side, certainly
    not enough but good progress. And I would mention something
    that I think is important to this Committee, which is the
    Government Performance and Results Act (GPRA) modernization.
    And so when I was here before, GPRA was a box-checking act to
    try and put in place that type of strategy so that governments
    commit to the strategic approach of their work and set clear
    goals that they work against. And I think that has advanced in
    terms of how the different departments are doing that, and that
    is a place where I have seen change.
        I mentioned earlier in the hearing the issue of the CIO and
    how we think about technology as a tool both that we can think
    about the opportunities with regard to efficiency and
    effectiveness, transparency, and not forgetting innovation,
    that it is an important part.
        So those are two specific changes that I think are
    important.
        Chairman Carper. It is funny you should mention the
    Government Performance Results Act. It is something that
    Senator Warner, Senator Akaka, and I worked on here in the
    Senate, and others did, I am sure, in the House, and passed it,
    the President signed it--with really no fanfare. It is like a
    time bomb in a good sense, and it is one that is starting to
    spread through the Federal Government. And as it metastasizes,
    instead of bad things happening, I think good things are going
    to happen. It has been a very helpful tool for the executive
    branch and I think for us as well and I think for the folks
    that are trying to get better results for less money. I am glad
    you mentioned it.
        I would ask you for some of the areas where you think we
    are making some progress, maybe a couple of areas that you
    think--and you have alluded to this already, but just maybe as
    we get ready to wrap up here, a couple of areas again you would
    like to just mention where you think we maybe have not made
    sufficient progress and we really need to.
        Ms. Burwell. Clearly, in the conversations that I have had,
    including in this hearing, the regulatory area and the
    functioning of OIRA, and it is from a number of different
    perspectives, and thinking about how the regulatory process is
    working. There have been a number of issues raised, and that is
    a place that I will want to understand. What are those issues,
    the priority of those issues? How does OMB, the institution,
    feel about those issues? And how do the Cabinet departments we
    work with--as well as the voice of people, which I think is
    hopefully represented by this Committee on a regular basis.
        And so that is a place where I think I will want to
    understand more deeply and has been brought up in both my
    meetings and this hearing.
        Chairman Carper. OK. Finally, would you just mention one or
    two management practices that you witnessed in the private
    sector that you thought were just especially effective that
    could be transferred to this realm? Just one or two.
        Ms. Burwell. I would go back to thinking about strategy,
    structure, people, and I think that is an important process and
    sort of just basic framework to help people move to a place
    where you get that kind of clarity of goal. That is part of
    what the strategy is. And so that would be one thing.
        I think another element that is important is actually
    thinking about people management. And I know we are all
    extremely busy in government, and it is very hard. But I
    actually think that performance management is another thing
    that I think you said I have learned that is actually very
    important. It is important to set goals with your direct
    reports. It is important to review those goals on a regular
    basis. It is important to use that as a tool by which you
    reserve people in terms of their performance.
        And so how we invest in our personnel in government is
    something across the board--executive branch, Legislative
    Branch, all of us--is something that I think is an important
    thing we can learn from the private sector, those disciplining
    tools and mechanisms, because we all get so busy, and it is one
    of the first things that I think goes.
        Chairman Carper. All right. Thank you.
        Jeff Zients has served as our Acting OMB Director, and he
    is not here, but just for those of you in the room that talk to
    him and if somebody is watching on the television over at OMB,
    I just want to express my thanks to him. I know the President
    and others feel that way as well. He has come in and he served
    in a variety of capacities at OMB, and we are grateful for his
    service.
        If you are confirmed--and I am encouraged that you will
    be--there are going to be a number of direct reports that are
    going to have to be confirmed to put your team in place. Would
    you just mention what those are likely to be?
        Ms. Burwell. Those are likely to be Brian Deese, who has
    been sent up to be the Deputy Director on the B side. I would
    add my thanks to Jeff Zients. If Jeff departs, there will be an
    opening the Deputy Director for Management. There will
    additionally be the position in OIRA in terms of Senate-
    confirmed positions that are open currently or will be open at
    OMB.
        Chairman Carper. Well, the Administration has an obligation
    to give us good names. They have given us in your case an
    excellent name, an excellent person, and we will look forward
    to getting to know the person they have nominated for the B
    side of OMB, and we are looking forward to meeting the new
    nominees for the other two.
        The Administration has an obligation to vet and nominate
    quality people. We have an obligation to get to know them and
    to vet them as well, have hearings promptly, and if there are
    no problems, to move those names promptly, especially in this
    instance.
        The other question, this is really kind of a personal
    question. I do not know that I will ever get to meet your
    parents, but I am struck they must really be--and Stephen is
    sitting right there behind you, your husband, over your right
    shoulder. They must be very remarkable people to have been
    raised in Hinton, West Virginia, a couple of gals that turned
    out as well as you and your sister obviously have turned out.
        What was it in the water there in Hinton, West Virginia,
    right along the New River, that enabled a gal who grew up there
    in a town that I once lived in as a kid, who has gone on to
    Harvard and was a Rhodes scholar and to work at the highest
    levels in business, foundations, the Clinton Administration,
    which has a remarkable record of success? What were some of the
    secrets that have enabled to--I do not know your sister, but I
    hear very good things about her. What are some of the secrets
    that have enabled you to turn out as well as you have. I know
    you are modest. You have no reason to be modest, but I admire
    the fact that you are. But what are the secrets?
        Ms. Burwell. I would credit my parents with a couple of
    very important things that they did, and one is they instilled
    in us the sense of the importance of service, and that is
    whether--my father belonged to many community organizations:
    the Lions Club, the Elks Club, the Jaycees, and the Rotary. My
    mother was with different organizations, business and
    professional women's groups. She was president of the Church
    Women for almost 25 years. And so this idea that is just part
    of everyday living. And so that is one thing.
        And then the other thing is I just think the simple idea of
    always do your best. And those two things I think are what have
    enabled me and my sister to do the things that we have had the
    chance to do.
        Chairman Carper. That is great. Whenever I go to schools--I
    go to schools a lot. I love to do that, all kinds of schools,
    elementary schools, high schools, colleges. I just like to talk
    about service, and I tell young people I meet with, in my life
    there are folks that I have met that are the least happy people
    are the people who do not really think about much outside of
    themselves, do not really look for ways to serve, and some of
    that is scripturally based, it is faith-based, and we have an
    obligation to serve other people. And to the extent that we do,
    then we are the lucky ones that were entitled to serve.
        You will be lucky, I think you will be lucky if you have
    this opportunity to serve, and my hope is that you will have
    that opportunity, and soon, and we will work with you to help
    put together a good team around you and then to really
    collaborate and see if we cannot somehow be a force multiplier
    for one another--we need to be--and create some synergies that
    are dramatically needed as this Administration begins its
    second 4 years.
        I have been handed a note by my staff, and it says: The
    hearing record will remain open until the close of business
    tomorrow, April 10, at 6 p.m., for the submission of statements
    and questions for the record.
        Before I close the hearing, the majority of people have
    come and gone during this hearing, but most of the Members,
    Democrat and Republican, on our Committee have come and asked
    questions, heard you, and I think that is a positive sign. It
    is actually sort of encouraging that we did not have a crush of
    people here in the room or sitting up here at the dais, because
    if they were, it would probably mean you are in trouble. I
    think you will have an opportunity to do this job. Then you
    will really be in trouble. But the rest of us will not be,
    because I think you bring us the kind of service and leadership
    that we need.
        Let me just ask my staff: Anything else for the good of the
    order? [No response.]
        All right. With that having been said, Stephen, great to
    see you again. I will finish up where I started. Thank you for
    your willingness to share your bride with all of us and for you
    to be able to share your life with the people of our country.
        With that, this hearing is adjourned.
        Ms. Burwell. Thank you, Mr. Chairman.
        Chairman Carper. Thank you.
        [Whereupon, at 4:35 p.m., the Committee was adjourned.]

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