[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

                               __________

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        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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