[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





                  REFORMING THE WORKERS' COMPENSATION
                     PROGRAM FOR FEDERAL EMPLOYEES

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

              HEARING HELD IN WASHINGTON, DC, MAY 20, 2015


                           Serial No. 114-16

                               __________

  Printed for the use of the Committee on Education and the Workforce



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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia,
Duncan Hunter, California              Ranking Member
David P. Roe, Tennessee              Ruben Hinojosa, Texas
Glenn Thompson, Pennsylvania         Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Matt Salmon, Arizona                 Joe Courtney, Connecticut
Brett Guthrie, Kentucky              Marcia L. Fudge, Ohio
Todd Rokita, Indiana                 Jared Polis, Colorado
Lou Barletta, Pennsylvania           Gregorio Kilili Camacho Sablan,
Joseph J. Heck, Nevada                 Northern Mariana Islands
Luke Messer, Indiana                 Frederica S. Wilson, Florida
Bradley Byrne, Alabama               Suzanne Bonamici, Oregon
David Brat, Virginia                 Mark Pocan, Wisconsin
Buddy Carter, Georgia                Mark Takano, California
Michael D. Bishop, Michigan          Hakeem S. Jeffries, New York
Glenn Grothman, Wisconsin            Katherine M. Clark, Massachusetts
Steve Russell, Oklahoma              Alma S. Adams, North Carolina
Carlos Curbelo, Florida              Mark Desaulnier, California
Elise Stefanik, New York
Rick Allen, Georgia

                    Juliane Sullivan, Staff Director
                 Denise Forte, Minority Staff Director
                                 ------                                

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                    TIM WALBERG, Michigan, Chairman
Duncan Hunter, California            Frederica S. Wilson, Florida,
Glenn Thompson, Pennsylvania           Ranking Member
Todd Rokita, Indiana                 Mark Pocan, Wisconsin
Dave Brat, Virginia                  Katherine M. Clark, Massachusetts
Michael D. Bishop, Michigan          Alma S. Adams, North Carolina
Steve Russell, Oklahoma              Mark DeSaulnier, California
Elise Stefanik, New York             Marcia L. Fudge, Ohio
































                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 20, 2015.....................................     1
Statement of Members:
    Walberg, Hon. Tim, Chairman, Subcommittee on Workforce 
      Protections................................................     2
        Prepared statement of....................................     3
    Wilson, Hon. Frederica S., Ranking Member, Subcommittee on 
      Workforce Protections......................................     5
        Prepared statement of....................................     7
Statement of Witnesses:
    Howie, Mr. Leonard III, Director, Office of Workers 
      Compensation Programs, U.S. Department of Labor, 
      Washington, D.C............................................    10
        Prepared statement of....................................    12
    Watson, Mr. Ron, Director of Retired Members, National 
      Association of Letter Carriers, Washington, D.C............    22
        Prepared statement of....................................    24
    Sherrill, Dr. Andrew, Director of Education, Workforce, and 
      Income Security, U.S. Government Accountability Office, 
      Washington, D.C............................................    31
        Prepared statement of....................................    33
    Dahl, Hon. Scott, Inspector General, U.S. Department of 
      Labor, Washington, D.C.....................................    67
        Prepared statement of....................................    69
Additional Submissions:
    Scott, Hon. Robert C. ``Bobby'', Ranking Member, Committee on 
      Education and the Workforce:
        Prepared statement of Carney, Ms. Susan M., Director, 
          Human Relations Department, American Postal Workers, 
          Union, AFL-CIO.........................................   121
        Letter dated May 26, 2015, from Brown and Goodkin........   135
    Ms. Wilson:
        Prepared statement of Alder, Mr. Jon, National President, 
          Federal Law Enforcement Officers Association...........    94
        Prepared statement of Andujar, Mrs. Helen................    86
        Prepared statement of Cox, Mr. J. David Sr., National 
          President, American Federation of Government Employees, 
          AFL-CIO................................................    99
        Prepared statement of Kelley, Ms. Colleen M., National 
          President, the National Treasury Employees Union.......    80
        Prepared statement of Thissen, Mr. Richard G., President, 
          National Active and Retired Federal Employees 
          Association............................................    88
    Chairman Walberg:
        Questions submitted for the record.......................   140
    Mr. Howie:...................................................
        Response to questions submitted for the record...........   143
 
                  REFORMING THE WORKERS' COMPENSATION
                     PROGRAM FOR FEDERAL EMPLOYEES

                              ----------                              


                        Wednesday, May 20, 2015

                     U.S. House of Representatives,

                 Subcommittee on Workforce Protections,

               Committee on Education and the Workforce,

                            Washington, D.C.

                              ----------                              

    The subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Tim Walberg 
(Chairman of the subcommittee) presiding.
    Present: Representatives Walberg, Rokita, Brat, Bishop, 
Stefanik, Wilson, Pocan, DeSaulnier, and Fudge.
    Also present: Representatives Kline, Scott, and Bonamici.
    Staff present: Lauren Aronson, Press Secretary; Janelle 
Belland, Coalitions and Members Services Coordinator; Ed 
Gilroy, Director of Workforce Policy; Callie Harman, Staff 
Assistant; Christie Herman, Professional Staff Member; Tyler 
Hernandez, Press Secretary; Nancy Locke, Chief Clerk; John 
Martin, Professional Staff Member; Zachary McHenry, Legislative 
Assistant; Daniel Murner, Deputy Press Secretary; Brian Newell, 
Communications Director; Krisann Pearce, General Counsel; Molly 
McLaughlin Salmi, Deputy Director of Workforce Policy; Alissa 
Strawcutter, Deputy Clerk; Alexa Turner, Legislative Assistant; 
Joseph Wheeler, Professional Staff Member; Tylease Alli, 
Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, 
Minority Staff Assistant; Denise Forte, Minority Staff 
Director; Carolyn Hughes, Minority Senior Labor Policy Advisor; 
Eunice Ikene, Minority Labor Policy Associate; Kendra Isaacson, 
Minority Labor Detailee; Brian Kennedy, Minority General 
Counsel; Richard Miller, Minority Senior Labor Policy Advisor; 
Amy Peake, Minority Labor Policy Advisor; Veronique Pluviose, 
Minority Civil Rights Counsel; Rayna Reid, Minority Labor 
Policy Counsel; and Theresa Tilling-Thompson, Minority Special 
Projects Assistant.
    Chairman Walberg. Well, a quorum being present, the 
subcommittee will come to order.
    Good morning. And welcome to all of our guests, as well as 
the Committee members.
    We have a distinguished panel of witnesses here today, and 
we thank you all for joining us this morning.
    Since 1916 the Federal Employees' Compensation Act has been 
a critical resource for federal employees who have suffered an 
injury or illness because of a work-related activity. Today the 
program covers approximately three million workers and last 
year alone paid out nearly $3 billion in benefits.
    Despite the significance of the FECA program, it has been 
nearly 40 years since the law was meaningfully updated. That 
goes back a ways.
    When you are talking about a program of this size and cost, 
making sure that it is operating as efficiently and as 
effectively as possible is imperative. We are dealing with 
lives. Concerns have been raised that FECA benefits are too 
generous and can discourage an employee's return to work.
    So we are here today to explore how Congress can modernize 
the FECA program, to ensure taxpayer dollars are being used in 
a smart and responsible way, and to make certain this program 
is serving federal employees as intended.
    Fortunately, we are not starting from scratch. Reforming 
the FECA program is something members in Congress and those in 
the administration have been working on in recent years. During 
the 112th Congress, Chairman Kline and I, along with our former 
Democratic colleagues George Miller and my former Ranking 
Member Lynn Woolsey, introduced the Federal Workers' 
Compensation Modernization and Improvement Act in a bipartisan 
way to begin addressing reforms proposed by the administration. 
The bill passed the House by a voice vote in 2011 and was 
accompanied by a request to GAO to examine the potential 
impacts of certain reforms.
    Unfortunately, the bill was never considered in the Senate. 
But since then, we have continued to examine reforms the 
Department of Labor has put forward.
    Strengthening the law remains a priority for this 
Committee, and today we will hear from the Department, GAO, and 
others to see what the path to reform looks like now and how 
the administration's proposals would affect the program and its 
beneficiaries. By fully understanding the options and impacts 
related to reform, we will be better positioned to modernize 
the FECA program, improve its integrity, and enhance its 
efficiency.
    As with any reform process, updating the FECA program will 
require some tough choices, but I think we can agree that 
something needs to be done. Our challenge will be reforming the 
program in a way that will use taxpayer dollars more wisely 
while ensuring the programs continue to support those it was 
set up to assist.
    Throughout this process it is important that we keep in 
mind both our responsibility to taxpayers and our commitment to 
the men and women who make up our federal workforce. Striking a 
balance between the two is not easy, but I believe it can be 
done.
    I am hopeful that the insights and analysis of those here 
today will help us better understand the Department's proposal 
and continue to build on past bipartisan efforts to better meet 
the needs of a twenty-first century workforce and more 
effectively use taxpayer dollars.
    With that, I now recognize the senior Democratic member of 
the subcommittee, my Ranking Member, Representative Frederica 
Wilson, for her opening remarks.
    [The statement of Chairman Walberg follows:]
    
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    Ms. Wilson. Thank you so much, Chairman Walberg. And thank 
you for calling this hearing today to discuss the Federal 
Employees' Compensation Act.
    And I would like to thank the panelists for being here this 
morning and all of the members of the audience, some who have 
been specifically invited for testimony.
    Chairman Walberg, I hope that we can work together. I know 
that you have been working on this issue for many years, and 
you just spoke of passing legislation that was bogged down in 
the Senate, and hopefully we can move forward with that piece 
of legislation. I was very interested in that.
    Since 1916, FECA has been the governing statute providing 
benefits for federal civilian workers injured or killed on the 
job. The law provides compensation for lost wages, medical 
care, and vocational rehabilitation.
    As we discuss reform, we must remind ourselves of the key 
principle behind the federal workers' compensation system: 
Workers and their families should be no worse off or better off 
financially than if the injury or death had not occurred.
    As we discuss FECA reform, we must also remind ourselves of 
the bipartisan work this Committee has done on this issue: four 
years ago this Committee worked to pass the Federal Workers' 
Compensation Modernization and Improvement Act through the 
House.
    The bill improved program integrity, modernized two 
benefits that had not been updated since 1949, expanded the 
availability of medical providers, and provided better benefits 
for civilian federal workers injured in a zone of armed 
conflict. This bipartisan bill strengthened the FECA system 
while providing savings to taxpayers.
    Well, as I said before, I hope that this bill can serve as 
the basis for reform efforts going forward, Mr. Chairman.
    Today's hearing will review the Department of Labor's FECA 
reform proposal, which makes three controversial cuts to 
benefits.
    First, the proposal cuts benefits for the families who are 
left behind after the death of a worker. These cuts would 
greatly affect widows, like Helen Andujar, who has joined us 
here today. Two years ago her husband, Osvaldo Albarati, a 
former corrections officer, was brutally gunned down while 
returning home to his family.
    He was assassinated in retaliation for breaking up a cell 
phone smuggling ring at the Department of Justice Bureau of 
Prisons facility where he worked. He left behind three children 
and a wife, who depend on FECA benefits.
    I applaud the family's bravery in sharing their family's 
story with us. As we consider the proposed cuts to survivor 
benefits, let us remember Ms. Andujar and all the wives, 
husbands, and children she represents.
    Second, the proposal reduces benefits for permanently 
disabled workers once they hit retirement age. This proposed 
cut is based on the idea that injured workers are unmotivated 
to return to work.
    However, we know that injured workers want to go back to 
work. In fact, 98 percent of all disabled workers under FECA 
return to work within two years.
    Because FECA benefits are less than a full retirement, they 
have an incentive to return to their jobs and earn a 
retirement. These workers want to be useful. They want to 
contribute to their retirements. They want to work.
    No group is more representative of this spirit from our 
federal workers than the letter carriers and widow who have 
joined us here today. These postal workers were crushed between 
vehicles and suffered horrific injuries that left them with 
little or no use of their legs. Despite painful and disabling 
injuries that make it impossible to stand, many of them have 
insisted on returning to work, if only for two hours a day.
    As we consider the proposed cuts to the permanently 
disabled at retirement age, let us remember these workers when 
it is argued that injured workers are unmotivated to return to 
work.
    Third, the proposal reduces benefits for injured workers 
with families. Under current law, FECA provides a base benefit 
that is 66\2/3\ percent of the injured employee's average 
weekly wages. Individuals with dependents would receive an 
additional percentage.
    This current system recognizes that injured workers with 
families have additional financial responsibilities. Under 
DOL's proposal, there would be a single compensation rate for 
all, regardless of dependents.
    This is not a family-friendly policy. Let us remember this 
as we consider these proposed cuts.
    We must also be reminded of the GAO studies this Committee 
requested. In late 2012, GAO issued three reports that found 
FECA benefits for the median-income worker are on par with or 
less than the earnings of an employee who works 30 years and 
retires under the Federal Employees Retirement System. GAO also 
reported the proposal would leave the median disabled worker 
with 31 percent to 35 percent less than the retirement they 
would have earned if they had not been injured.
    These GAO reports, which use widely accepted methods, 
strongly suggest the proposed cuts are inappropriate and are 
not in line with the principle that workers should not be 
better off or worse off than if they had not been injured on 
the job. Let us remember this as we consider the proposed cuts.
    I want to thank the witnesses for their preparation.
    I also want to thank those who traveled a long distance to 
be with us at this hearing: the families who are affected by 
this rule and the families who will be affected by this 
hearing.
    I yield back the balance of my time.
    [The statement of Ms. Wilson follows:]
    
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    Chairman Walberg. I thank the gentlelady.
    Pursuant to Committee rule 7(c), all subcommittee members 
will be permitted to submit written statements to be included 
in the permanent hearing record. And without objection, the 
hearing record will remain open for 14 days to allow 
statements, questions for the record, and other extraneous 
material referenced during the hearing to be submitted in the 
official hearing record.
    It is now my pleasure to introduce today's witnesses.
    First, Mr. Leonard Howie is director of the Office of 
Workers' Compensation Programs at the U.S. Department of Labor 
here in Washington, D.C. Mr. Howie became director of OWCP in 
February 2015.
    Before joining OWCP, Mr. Howie served as secretary of 
Maryland Department of Labor, Licensing, and Regulation, a job 
previously held by Secretary of Labor Perez. Prior to his work 
with the state of Maryland, Mr. Howie was an attorney advisor 
with the Office of Civil Rights in the U.S. Department of 
Education.
    Welcome.
    Mr. Ron Watson is the director of retired members with the 
National Association of Letter Carriers here in Washington, 
D.C. In this role Mr. Watson oversees the compensation 
department at NALC. He represents and defends the rights of 
nearly 290,000 letter carriers employed by the USPS.
    Welcome.
    Dr. Andrew Sherrill is director of education, workforce, 
and income security with the U.S. Government Accountability 
Office here in Washington, D.C. In his 20 years at GAO, Dr. 
Sherrill has issued reports on a broad range of topics, 
including workforce development, unemployment insurance, 
workers' compensation programs, women in the labor force, 
welfare reform, and foreign labor programs.
    Welcome.
    Mr. Scott S. Dahl, the inspector general for the U.S. 
Department of Labor here in Washington, D.C. As IG, Mr. Dahl is 
responsible for overseeing the administration of a nationwide, 
independent program of audits and investigations involving 
DOL's programs and operations.
    Prior to his time at DOL, Mr. Dahl served as the IG at the 
Smithsonian Institute and has previously held senior IG 
positions at the Office of the Director of National 
Intelligence and the Department of Commerce.
    Welcome.
    I will now ask, as is our process here, our witnesses to 
stand and be sworn in, raising your right hand.
    [Witnesses sworn.]
    Let the record reflect the witnesses answered in the 
affirmative.
    And you may now take your seats.
    Before I recognize you to provide your testimony, let me 
briefly remind all of us here in the room of our lighting 
system. You will have five minutes to present your testimony. 
We hope that you can keep very close to that. Won't cut you off 
in mid-sentence or mid-thought, but please keep to it as 
closely as possible.
    The same would be true for our subcommittee members when we 
ask the questions, as well.
    The green light is on for the first four minutes of your 
five minutes. Yellow light comes on, you have another minute. 
And the red light calls you to close off your testimony before 
us.
    After all have testified, members will each have five 
minutes to ask questions.
    And so let me begin the testimony by recognizing Mr. Howie 
now for your five minutes of testimony. Thank you for being 
here.

   STATEMENT OF MR. LEONARD HOWIE, III, DIRECTOR, OFFICE OF 
   WORKERS' COMPENSATION PROGRAMS, U.S. DEPARTMENT OF LABOR, 
                        WASHINGTON, D.C.

    Mr. Howie. Thank you, Mr. Chairman.
    Chairman Walberg, Ranking Member Wilson, Chairman Kline, 
Ranking Member Scott, I appreciate the--and members of the 
Committee, I appreciate the opportunity to discuss the Federal 
Employees' Compensation Act with you today. This is the third 
time in recent years that OWCP programs have been before this 
subcommittee to discuss FECA reform, but it is the first time 
since I arrived at OWCP in February that I have had the 
pleasure to come before this subcommittee.
    And thank you again, Mr. Chairman and Ranking Member 
Wilson, for meeting with me earlier to discuss these important 
issues.
    I would like to share a set of balanced proposals that 
would enhance our ability to assist FECA beneficiaries 
returning to work, providing a more equitable array of 
benefits, and to generally update the program. But first I 
would like to share a brief overview of program highlights 
since--and developments since we last appeared before this 
subcommittee.
    Almost 100 years ago, Congress enacted FECA to provide 
workers' compensation coverage to all federal employees and 
their survivors for disability and death due to a work-related 
injury. The Office of Workers' Compensation Programs works hard 
to administer this non-adversarial program fairly, objectively, 
and efficiently. We seek to continuously improve quality and 
service delivery to our customers, enhance internal and 
external communications, and to reduce cost to the taxpayers.
    Over the past five years, an average of 119,000 new injury 
and illness claims were filed annually and processed by OWCP 
staff. Due in part to our quality case management initiative 
and other efforts to return injured employees to work, less 
than 2 percent of all new injury cases remain on the long-term 
compensation rolls for two years after the date of injury.
    OWCP continually employs a variety of strategies available 
within the confines of FECA to strengthen the program. In 
fiscal year 2014 we established a FECA program integrity unit. 
Elder Research, a respected consulting company in data-mining 
and predictive analytics, is helping OWCP establish a data-
driven approach to our program integrity work.
    Now to the matter at hand. To further improve FECA, we have 
made a comprehensive set of recommendations to Congress, which 
will include some statutory changes that I will now highlight.
    To help injured employees return to work, we request 
authority to start vocational rehabilitation activities without 
waiting until the injury is deemed impermanent--deemed to be 
permanent, as well as a mandate to develop return-to-work plan 
with claimants early in the rehabilitation process wherever 
feasible.
    We also suggest changes to the benefit structure. For 
example, the payment of schedule awards for the loss or loss of 
use of a limb, one's sight, or hearing, is often very 
complicated and thus often delayed. We think that these awards 
should be paid concurrently with wage loss compensation and to 
be fair, should be calculated at a uniform rate for all 
employees.
    We also propose to increase the woefully outdated benefits 
of funeral expenses and facial disfigurement. We recommend 
setting a uniform level for all new claimants of 70 percent. 
This compensation adjustment would address challenges in 
returning claimants to work and to reduce the level of improper 
payments.
    To provide equity with other federal employees, we also 
recommend establishing a conversion rate for beneficiaries who 
are beyond Social Security retirement age which would more 
closely mirror OPM retirement rates. We recommend that these 
changes be prospective in nature so that no injured worker 
currently receiving benefits is impacted by these changes.
    My written testimony outlines other important provisions 
that would streamline and improve the program--for example, 
expanding our assistant reemployment subsidy to include federal 
agencies.
    In summary, while FECA is the model workers' compensation 
program, it does have limitations that need to be addressed. 
The reforms that we are suggesting here today are not new. They 
are careful, they are balanced, and they are based on DOL's 
experience as well as on the recommendations and comments of 
GAO and the OIG, and at a bottom line, they reflect good 
government.
    And as you said, Mr. Chairman, when OWCP appeared before 
your subcommittee in 2011, any opportunity to better serve 
workers in need of assistance and spend taxpayer dollars more 
efficiently should be encouraged. We couldn't agree more, and I 
look forward to working with the subcommittee in advancing this 
shared goal.
    Thank you again for the opportunity to meet with you today, 
and I will be pleased to answer any questions that you and 
other members have.
    [The statement of Mr. Howie follows:]
    
    
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    Chairman Walberg. Mr. Howie, thank you. This is your first 
time before us. You have already set the standard high, 
finishing before five minutes were completed. Thank you.
    Mr. Watson.

   STATEMENT OF MR. RON WATSON, DIRECTOR OF RETIRED MEMBERS, 
   NATIONAL ASSOCIATION OF LETTER CARRIERS, WASHINGTON, D.C.

    Mr. Watson. Thank you, Chairman Walberg, Ranking Member 
Wilson, and members of the subcommittee, for inviting me to 
testify. I am pleased to be here on behalf of the nearly 
290,000 members of the National Association of Letter Carriers, 
including some who are here with me today. I would like to 
introduce them.
    They are letter carriers, and a surviving spouse, who have 
suffered catastrophic on-the-job injuries when they were 
crushed between their postal vehicles and out-of-control 
oncoming vehicles: Shirley Rondeno, widow of letter carrier Roy 
Rondeno, of Metairie, Louisiana; Dan Hohenstein, of Arvada, 
Colorado; Doug Poole, of Columbus, Ohio; Keith Wagner, of 
Seattle, Washington; Joel Cabrera, of San Gabriel, California; 
and Dave Betts, of Exeter, New Hampshire.
    I am the director of retired members of the NALC. I have 
represented injured letter carriers with their OWCP claims for 
35 years.
    The NALC welcomes the prospect of reform to the FECA, 
provided it does not result in unfair harm to the injured 
workers it was designed to protect. Any such reform should be 
consistent with the basic principle that workers should be no 
better off, but no worse off, as a result of suffering an on-
the-job injury.
    In the 112th Congress, the House passed bipartisan FECA 
reform legislation, H.R. 2465. The NALC supported that bill 
because its provisions met that fairness test and at the same 
time saved money. The NALC strongly encourages the Committee to 
pass a similar bill.
    But other proposals do not pass the fairness test, 
including DOL's reductions of wage-loss compensation for 
injured workers with dependents, widows and orphans, and 
further reductions when workers reach retirement age. The NALC 
is concerned that DOL proposals to reduce the 75 percent wage-
loss compensation rate for families are not evidence-based. 
Department of Labor has no studies or independent analysis to 
support these proposed cuts.
    Our analysis of that 75 percent rate fails to support the 
argument that it is a disincentive to return to work.
    First, many injured workers do not receive that full 75 
percent or the full 66\2/3\ percent rate. They receive a pro-
rated percentage of the applicable rate based on OWCP's 
determination of their wage-earning capacity.
    Every one of the injured letter carriers here today with me 
is potentially subject to reductions in wage-loss compensation 
upon decisions by OWCP regarding permanency of their conditions 
and their wage-earning capacity. Reduction of the 75 percent 
rate would further reduce the rate--the income of partially 
disabled workers whose wage-loss compensation has already been 
proportionally reduced by OWCP.
    And second, workers receiving wage-loss compensation lose 
significant benefits. They lose Thrift Savings Plan matching 
funds, the benefit of sheltering income in the TSP, credit 
towards their Social Security benefits, overtime opportunities, 
promotion prospects, and other pay-increase opportunities. All 
of the injured letter carriers here today have suffered loss of 
these benefits.
    The NALC is also concerned that DOL proposals to reduce 
wage-loss compensation at retirement age are not evidence-
based. Department of Labor has no studies or independent 
analysis to support these proposed cuts.
    DOL's arguments fail in the light of GAO reports showing 
the extent of FERS benefits when compared with FECA benefits. 
Contrary to DOL testimony, benefits under FECA do not exceed 
that provided for FERS recipients who work a full 30-year 
career.
    Ninety-two percent of all current federal and postal 
employees are covered by FERS. Any comparison with CSRS is not 
relevant.
    In closing, too many letter carriers, including some here 
today, have suffered catastrophic injuries when they were 
crushed between incoming vehicles and their mail trucks. What 
message will be sent to workers who already lose so much from 
work-related injuries?
    There is no evidence that FECA benefits need to be reduced, 
unless DOL is simply following the practice of some states and 
arbitrarily cutting workers' compensation benefits without 
regard to consequences.
    Thank you for the opportunity to testify.
    [The statement of Mr. Watson follows:]
    
    
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    Chairman Walberg. Mr. Watson, thank you, as well. And thank 
you for also putting face to this issue, with bringing people 
who have been impacted. And I can see the emotion that still is 
carried with them on this issue.
    So appreciate your willingness to work with us. This is a 
process that none of us up and down this rostrum will take 
lightly.
    Dr. Sherrill, thank you for being here. I recognize you for 
your five minutes.

   STATEMENT OF DR. ANDREW SHERRILL, DIRECTOR OF EDUCATION, 
WORKFORCE, AND INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY 
                    OFFICE, WASHINGTON, D.C.

    Dr. Sherrill. Chairman Walberg, Ranking Member Wilson, and 
members of the subcommittee, I am pleased to be here today to 
discuss the findings from three reports that GAO issued in 
fiscal year 2013 on the potential effects of proposed changes 
to benefit levels in the FECA program.
    My testimony today summarizes our findings in three areas: 
first, the potential effects of proposals to compensate total 
disability FECA beneficiaries at a single rate of either 70 
percent or 66.67 percent of gross wages at time of injury; 
second, potential effects of the proposal to reduce FECA 
benefits to 50 percent of applicable wages at full Social 
Security retirement age for total disability beneficiaries; and 
third, how partial disability beneficiaries might fare under 
the proposed changes.
    Our analyses focused on individuals covered under the 
Federal Employees' Retirement System, FERS, which covered about 
90 percent of the federal workforce in 2013. We conducted 
simulations comparing FECA benefits to the income--either take-
home pay or retirement benefits--a total disability beneficiary 
would have had absent an injury.
    Our methodology matched FECA beneficiaries to uninjured 
federal workers using a computer algorithm to select the 
closest worker for each FECA beneficiary on key 
characteristics. We used actual data on the uninsured worker--
on the uninjured worker's earnings and retirement benefits. In 
addition, we conducted seven case studies of partial disability 
beneficiaries.
    Our simulations found that under the current FECA program, 
in 2010 the median wage replacement rates--that is, the 
percentages of take-home pay replaced by FECA--were 88 percent 
for postal service beneficiaries and 80 percent for non-postal 
beneficiaries. Proposals to set the initial FECA benefits at a 
single compensation rate regardless of the presence of 
dependents would reduce these wage replacement rates by several 
percentage points.
    We also found that wage replacement rates under the current 
FECA program--under the current program are slightly higher for 
beneficiaries with dependents, but that under a single 
compensation rate proposal they would be higher for 
beneficiaries without dependents and the differences would be 
greater.
    Our simulations comparing FECA and FERS found that under 
the current FECA program, the median FECA benefit package for 
total disability beneficiaries was 32 percent greater than the 
median FERS--2010 FERS retirement package for non-postal 
beneficiaries and 37 percent greater for postal beneficiaries. 
Under the proposed FECA reduction at retirement age, the 2010 
packages would be roughly equal.
    However, FERS is not a mature retirement system, so those 
simulations understated the future FERS benefit levels. For 
example, the FERS annuitants we analyzed had a median federal 
career of 16 to 18 years. So we then simulated a mature FERS 
system intended to reflect the benefits of workers with 30-year 
careers and found that the median FECA benefit package under 
the proposed change would be from 22 to 35 percent less than 
the median FERS retirement package.
    The results from our seven case studies of partial 
disability beneficiaries are not generalizable, but they do 
show how they might fare under the proposed FECA changes and 
that that can vary considerably based on their individual 
circumstances, such as their earning capacity and their actual 
levels of earnings. Partial disability beneficiaries differ 
fundamentally from total disability beneficiaries, as they 
receive reduced FECA benefits based on a determination of their 
earning capacity.
    For example, beneficiaries with high earning capacities 
based on actual earnings might elect to retire under FERS if 
their potential retirement benefits were higher than their 
current or reduced FECA benefit levels. Thus, they would not be 
affected by the proposed FECA reduction proposal.
    In contrast, beneficiaries with low earning capacities who 
might remain on FECA past retirement age would have their 
benefits reduced under the proposed change.
    In conclusion, FECA continues to play a vital role in 
providing compensation to federal employees who are unable to 
work because of injuries sustained while performing their 
federal duties. Our simulations incorporated the kind of 
approaches used in the literature on assessing benefit adequacy 
for workers' compensation programs, such as taking account of 
missed career growth.
    We assessed the proposed changes by simulating the level of 
take-home pay or retirement benefits FECA beneficiaries would 
have received if they had not been injured, which provides a 
realistic basis for assessing how beneficiaries may be 
affected.
    However, we did not recommend any particular level of 
benefit adequacy. As policymakers assess proposed changes to 
FECA benefit levels, they will be implicitly making decisions 
about what constitutes an adequate level of benefits for FECA 
beneficiaries both before and after they reach retirement age.
    Finally, apart from proposed changes to FECA benefit 
levels, the administration has also proposed changes to 
strengthen FECA program integrity. As our prior work has 
recommended, Congress should consider granting the Department 
of Labor authority to access wage data to help verify 
claimants' reported income and help ensure the proper payment 
of benefits.
    That concludes my prepared statement. I would be happy to 
respond to any questions.
    [The statement of Dr. Sherrill follows:]
    
    
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    Chairman Walberg. Thank you.
    Inspector General Dahl.

     STATEMENT OF HON. SCOTT DAHL, INSPECTOR GENERAL, U.S. 
             DEPARTMENT OF LABOR, WASHINGTON, D.C.

    Mr. Dahl. Thank you, Chairman Walberg, Ranking Member 
Wilson, and members of the subcommittee.
    For more than three years a nurse who was supposedly 
injured and unable to work earned and collected--earned $98,000 
in benefits she wasn't entitled to and failed to disclose that 
to the FECA program. Likewise, a food inspector collected FECA 
benefits for more than five years while working another job. We 
were able to stop these fraudulent activities, but these cases 
could have been detected sooner if timely wage information was 
available to OWCP and to the OIG.
    For almost two decades, the OIG has made three 
recommendations to strengthen the FECA program: one, give the 
Department access to Social Security earnings records and the 
National Directory of New Hires data; two, move the three-day 
waiting period; three, reassess the level of benefit payments 
once an individual reaches retirement age.
    Granting this statutory access to Social Security earnings 
information, and especially to the National Directory of New 
Hires, would provide valuable information for improving program 
integrity and detecting fraud. This would enable OWCP to make 
informed claim determinations and identify individuals who are 
working but continuing to receive FECA disability benefits. 
This would also enable the OIG to better investigate fraudulent 
claims.
    The Department can access this Social Security earnings 
information only if the claimant gives the Department 
permission. Obviously, claimants intending to defraud the FECA 
program are very unlikely to give the Department the authority 
to access their earnings data.
    Congressional action would be required for the Department 
to have this direct access to Social Security data and to the 
New Hire Directory.
    Another longstanding recommendation that OIG has made 
involves the three-day waiting period. FECA allows employees to 
receive a continuation of pay for up to 45 days to eliminate 
interruption of income while OWCP is processing that claim.
    The three-day waiting period is intended to deter frivolous 
claims. But currently, this three-day waiting period is placed 
at the end of the 45-day period--continuation-of-pay period. In 
2006, Congress changed this period for postal workers by 
placing it at the beginning of the 45-day period, and we 
recommend that this change be made for federal workers--other 
federal employees.
    At present, more than 40,000 claimants receive FECA 
benefits for long-term disability, many into retirement age and 
beyond. The OIG has recommended that the Department reassess 
the benefit rate structure for FECA to determine what an 
appropriate benefit should be for those beneficiaries who 
remain on the FECA rolls into retirement.
    As Dr. Sherrill has testified, GAO has done significant 
work on this issue that will help inform Congress and 
policymakers to make appropriate decisions on this rate.
    In our current oversight work, we issued a report several 
days ago containing several recommendations to the Department 
to improve its estimation methodology in order to capture the 
full extent of improper FECA payments.
    For our investigative work, we have focused more recently 
on identifying and investigating medical provider fraud because 
of the magnitude of dollars that are involved in that kind of 
fraud. For instance, a recent investigation resulted in the 
conviction of a psychologist who received almost $2 million in 
payments for services that he never rendered.
    And we have been doing even more to prevent fraud. In an 
effort to identify key indicators of both medical provider and 
claimant fraud, the OIG is strengthening its data analytics 
capabilities to better enable us to review FECA data. This 
approach will provide us and the Department with greater 
insight into the overall extent of the fraud of the FECA 
program.
    Mr. Chairman, thank you for the opportunity to testify. I 
would ask that my full statement be entered into the record, 
and I would be pleased to answer any questions that you or the 
other members have.
    [The statement of Mr. Dahl follows:]
    
    
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    Chairman Walberg. Thank you, Mr. Dahl. And your statement 
is fully entered into the record.
    I now recognize myself for five minutes of questioning. And 
before we lose the train of thought, and I want to go to 
Director Howie, but let me go first to Inspector General Dahl.
    One important longstanding recommendation that you pointed 
out very clearly in several ways from the Office of Inspector 
General is that OWCP should have access to Social Security wage 
information to document whether a claimant has unreported or 
failed to report outside income. Could you elaborate a little 
bit further on how access to this information would result in 
measurable savings, and improvements along with that, to the 
program?
    Mr. Dahl. Certainly. On the front end, for OWCP to have 
access to this data they would be able to verify wage 
information for claims when needed. In particular, the 
Directory of New Hires, as I mentioned, is even a more valuable 
resource because it provides more timely information about when 
an employee has returned to work. An employer has to report 
that generally within 20 days of the new hire.
    On the back end, for the OIG, access to these databases 
would help us to pursue our criminal investigations in a more 
efficient and effective manner by targeting certain claimants 
and using the data to cross-match, and also provide the 
oversight of OWCP.
    Chairman Walberg. Okay. Thank you.
    Mr. Howie, an important purpose of FECA, and workers' 
compensation systems in general, is to ensure that injured and 
ill workers return to gainful work as quickly as possible--if 
possible. How does OWCP currently assist injured or ill workers 
in returning to work? And secondly, how would Department of 
Labor's reform proposals improve upon or revamp the return-to-
work process?
    Mr. Howie. Mr. Chairman, that is a correct statement of 
what one of our core programs is, and that is to get the 
injured worker back to work as soon as possible. We have a very 
active disability management program where we have registered 
nurses who assist in the identification of occupational or just 
other physical issues that the employee has, get them into 
rehabilitation as quickly as possible so that they can see 
improvement in their medical condition.
    Chairman Walberg. Are these clearly offered to them?
    Mr. Howie. These are offered to----
    Chairman Walberg. They are not having to search that out?
    Mr. Howie. They do not have to search for that. So this is 
part of our core mission, to provide that particular service.
    We have an active vocational rehabilitation effort so that 
if--in those cases where we have injured workers who are unable 
to return to the jobs that they had, perhaps for years, we work 
with them to identify other things that they can do within 
either their current organization or another placement. So we 
do try to provide those services that the employees need to 
identify their physical issues and new limitations and to get 
them on a pathway that will see that medical improvement, and 
then help them to find opportunities for continued employment.
    Chairman Walberg. You also noted in your prepared testimony 
that components of the administration's FECA reform proposal 
fall within three categories: return to work and 
rehabilitation, updating benefit structures, and thirdly, 
modernizing and improving FECA. Can you discuss the process 
undertaken by the administration in proposing these reforms to 
the FECA program?
    Mr. Howie. Absolutely, Mr. Chairman. As you noted in your 
opening comments, there is nobody on the dais up there who is 
going to--sorry, there is nobody up there who is taking this 
effort lightly. This is a very serious endeavor.
    And in doing so, there are a couple underlying principles 
that we have applied to this. First of all, just want to kind 
of state what this is not.
    This is not a reform proposal that is not well thought out. 
It is something that we put a lot of energy into, and actually 
that this administration and prior administrations have 
actually owned, so I own this, Secretary Perez owns it, and we 
do believe that it is good government.
    Chairman Walberg. What other stakeholders along that point 
are involved in this process?
    Mr. Howie. What stakeholders? We have worked with GAO, we 
have worked with the IG, we have worked with all of the 
servicing agencies that have employees that we provide services 
to.
    Now, as you can imagine, not everybody is on the--in full 
agreement with everything that we are proposing, but these are 
concepts that have been shared and talked through throughout 
the years.
    Chairman Walberg. Okay.
    Well, I see my time is expired, and so I now recognize the 
Ranking Member, gentlelady from Florida, Ms. Wilson.
    Ms. Wilson. Thank you, Mr. Chair.
    Mr. Chair, we have statements from groups that represent 
the federal employees that would be harmed by proposed cuts to 
FECA. I ask that the following statements be entered into the 
record under unanimous consent: statement from the National 
Treasury Employees Union; statement from Helen Andujar, widow 
of Osvaldo Albarati; statements from National Active and 
Retired Federal Employees Association; statement from the 
Federal Law Enforcement Officers Association; and a statement 
from the American Federation of Government Employees, the AFL-
CIO.
    [The information follows:]
    
    
    
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    Chairman Walberg. Without objection, and hearing none, they 
will be recorded.
    Ms. Wilson. Thank you, Mr. Chair.
    Mr. Howie, today we heard about a federal prison guard, and 
we saw his picture. He was murdered. And we also heard about a 
mail carrier who died because he was crushed between vehicles.
    DOL's legislative proposal calls for reducing benefits for 
the surviving widows and orphans of these types of workers 
killed during federal service. Can you explain why the 
Department wants to cut benefits from the families who have 
just lost a loved one like this?
    Mr. Howie. Absolutely. First of all, I would just like to 
reiterate that this proposal is prospective, so no one who is 
in the program right now is going to receive any cuts at all.
    And what this allows to have happen is that as the date of 
injury occurs for federal employees who are injured in the 
future, people are able to plan accordingly. So the rate is 
lower, but our analysis shows that that 70 percent rate still 
provides a level of income replacement that keeps them roughly 
equivalent with where they were had they not been injured.
    Now, it has been mentioned previously that there is a harm 
that is placed on the dependents and the strain that is placed 
on family. When you look at our law, our law is clear. We are 
to provide replacement wages for injuries.
    There is no other program in OWCP where we actually pay 
additional money for the number of dependents that an employee 
has. And what our proposal does--and again, we use the word 
``balanced'' repeatedly. What our proposal does is that for 
those, just as you would have employees with dependents whose 
rates are going to come down, but they come down to a level 
that even GAO notes is still only in the 3 to 4 percent range, 
so it is still relatively--roughly equivalent, you have those 
injured workers without dependents who have been at that 66.67 
rate, and this actually brings them back up to a rate.
    Because one of the main principles that we are trying to 
attain here is that in addition to no employee should have a 
reduction in their overall benefit level because of their 
injury, we really believe that two federal employees similarly 
situated, working the same jobs at the same pay rate, should 
not be compensated differently just because there are 
dependents at issue. So we know these are extremely difficult 
issues to talk about, but that is really at the core policy 
determination that we are making in proposing the 70 percent 
rate.
    Ms. Wilson. Mr. Howie, you state in your testimony that one 
reason to cut benefits is that FECA is more generous than most 
states. Of course you realize that many states, including my 
home state of Florida, are taking the deplorable position of 
slashing benefits on the workers.
    We are the worst. We are the worst on the workers' 
compensation in a race to the bottom. Can you explain why the 
Federal Government would want to follow this state trend 
instead of maintaining benefit levels and being a strong 
standard-bearer for workers' compensation?
    Mr. Howie. Absolutely. Absolutely.
    First of all, I had the benefit of attending and 
participating in a conference in Orlando last week hosted by 
the National Council on Compensation Insurance, and my opening 
remarks really extolled the benefits, the virtues, if you will, 
of our federal employees' compensation program, of which they 
don't know that much about because they obviously do not have 
federal employees that they are concerned with.
    But the panel that followed me, the issue that was--the 
question that was presented to them was that very question 
about racing to the bottom. And there are a number of states 
who are proudly taking on the task of reducing benefits.
    Our proposal is not even in that same ballpark. When you 
look at state programs, they have elements within their 
programs that we hope to never have and we do not have right 
now.
    They have caps on the amount of compensation that can be 
provided. They have limits on the duration that benefits are 
paid. They have the ability to enter into settlements, which 
experience shows is not always the best outcome for employees.
    So we don't do any of those things. We don't propose to do 
any of those things.
    We desire to continue to remain at that level of being that 
shining light for states to follow, because our programs do not 
have a duration limit on them. They do not have a dollar amount 
on them.
    So we continue to be a standard. And I would just 
respectfully submit that we do not put ourselves into that 
position of equating what we are doing with what many of the 
states are doing.
    Chairman Walberg. The gentlelady's time is expired. I 
appreciate the questioning.
    And now I recognize the gentleman from pure Michigan, Mr. 
Bishop.
    Mr. Bishop. Thank you, Mr. Chairman.
    I want to thank the panel for their testimony today.
    I also would like to thank the interested parties who are 
here participating in a very important discussion on public 
policy. Thank you very much for your input.
    Dr. Sherrill, wonder if you might be able to help me out 
here. I know that according to the Internal Revenue Code, FECA 
benefits are not subject to federal income tax. Can you explain 
to me the rationale for excluding the benefits from income tax?
    Dr. Sherrill. Well, all I can say is that--I don't know the 
rationale, but they are not considered earnings under the 
Social Security Act nor the Internal Revenue Code, so FECA 
beneficiaries generally can't contribute to Social Security or 
a Thrift Savings Plan, although on the back end, FECA 
beneficiaries can receive withdrawals from prior TSP 
contributions, but not make contributions once they are 
receiving FECA.
    Mr. Bishop. So when it comes to receiving FECA benefits 
during retirement years, in terms of tax implications, how does 
the FECA compensation compare to the typical retirement 
earnings?
    Dr. Sherrill. Well, one of the things to keep in mind is 
that when we did our analysis comparing the FECA package 
compared to the FERS retirement package that their uninjured 
counterpart would have, which includes the FERS annuity, the 
TSP, and the Social Security, we did an analysis to make a 
comparison to the taxable versions. It is all of the retirement 
income is taxable that we did that analysis there, compared to 
the FECA benefit, which is untaxable.
    And so what we found in the first sort of line of analysis 
is that under the current system, FECA benefits are higher than 
what they would have gotten if they had been uninjured, as a 
FECA--as a FERS retirement package. But then we looked at what 
would the effect of the compensation proposal to change the 
compensation to 50 percent at retirement, and at that level it 
would be roughly equal. The FECA beneficiary's package would be 
roughly equal or on a par with what they would have gotten in 
retirement.
    But then there is a further consideration there. The FERS 
system is immature, so the more years you have benefits under 
FERS, the more those grow. And so when we did that final 
simulation, then, in terms of the median benefit, the FERS 
package was higher than the FECA packages.
    Mr. Bishop. Good. Thank you very much.
    Mr. Inspector General, just following up on a question that 
was asked to you by our good Chairman, wondered if you might 
elaborate for me on the subject you were discussing with regard 
to access to Social Security, and wondered if you might share 
with me any risks that are associated with allowing DOL to--
direct access to Social Security.
    Mr. Dahl. There are risks that OWCP would--could make a 
unilateral decision and reduce or terminate benefits. To 
mitigate those risks, there would need to be sufficient 
controls in place to ensure that that data that they are 
relying on is accurate and that the claimant have an 
opportunity to respond. And so, you know, while there is a 
risk, there could be controls in place to mitigate those.
    Mr. Bishop. And would the access to information help DOL 
improve program integrity and the process of detecting fraud?
    Mr. Dahl. Absolutely. In a more timely fashion they can do 
the cross-matching I mentioned before, both on the earnings 
information from Social Security and on the new hires, with the 
New Hire Database--the New Hire Directory. And that would 
enable them to detect at an earlier point in time and better 
target their program integrity activities.
    Mr. Bishop. Thank you, sir.
    Mr. Chairman. I yield back.
    Chairman Walberg. Thank the gentleman.
    And I recognize the Ranking Member of the Education and 
Workforce Committee, the gentleman from Virginia, Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman, and thank you for 
holding the hearing today.
    The Department of Labor claims its proposal to cut benefits 
and make program adjustments will save between $360 million and 
$550 million over 10 years, and as I understand it, these cuts 
are possible candidates for budget reconciliation. I would ask 
Mr. Howie if this proposal is designed to save money or to 
improve the program.
    Mr. Howie. The proposal is designed to improve the program, 
first and foremost. What happens is that when you do adopt that 
new rate, savings do happen.
    Now, the savings in this case, that was not our primary 
objective in----
    Mr. Scott. But you could have done it in a budget-neutral 
way without having to inflict cuts. Is that right?
    Mr. Howie. Well, what we recognize, sir, is that the two 
largest areas where savings could actually be achieved are in 
the percentage rate of compensation and in the retirement 
benefit. The others would not produce, for those looking for 
savings, would not produce that level of----
    Mr. Scott. So savings is a--you could have done this 
without inflicting benefit cuts, but you were trying to achieve 
savings. Is that right?
    Mr. Howie. That was not our primary objective, and we could 
have----
    Mr. Scott. Well, you could have--then why did you cut the 
benefits?
    Mr. Howie. Well, again, these benefits are prospective, so 
we are not cutting anybody's benefits. What----
    Mr. Scott. Yes. You are protecting present beneficiaries 
from the harm inflicted by this proposal. It is still harmful 
to the future employees because they would have gotten more.
    And my question is if you weren't trying to save money, why 
did you want to cut benefits?
    Mr. Howie. It goes----
    Mr. Scott. You were trying to save money.
    Mr. Howie. It goes back to our guiding principle of--one of 
our guiding principles of making sure that the employees who 
are injured are compensated at a level that does not exceed 
those who are not. And even what GAO's reports show is that 
that was actually happening.
    So we wanted to make sure that that----
    Mr. Scott. Wait a minute. I heard GAO say that the benefits 
were better if you would continue to work than if you had been 
injured and gotten compensated.
    Mr. Howie. In that point on the data, looking at that final 
simulation of that 30-year employee, that is the one example 
that was pointed out where that--where the FECA benefit 
reduction would be materially different. But all of the rest of 
the bands, that is where the payments were roughly equivalent.
    Mr. Scott. Well, did you do a study under FERS?
    Mr. Howie. I am sorry, please repeat----
    Mr. Scott. Did you do a study under FERS?
    Mr. Howie. In looking at the retirement benefits, and even 
looking at----
    Mr. Scott. Which retirement plan did you study?
    Mr. Howie. We relied on a lot of the work that GAO did and 
looking at what the impact of the reductions would be to 
employees who are operating under FERS. And for the most part, 
there was no----
    Mr. Scott. Did you produce a study that showed your numbers 
under FERS, as opposed to the GAO study that studied--I 
understand you were looking at the old retirement plan and not 
the new retirement plan. That is not right?
    Mr. Howie. No. We looked at the new retirement plan also in 
the context of the work of the three reports that GAO prepared.
    Mr. Scott. Okay.
    Well, let me--Dr. Sherrill, can you remind me of what your 
conclusion was?
    Dr. Sherrill. Well, the bottom line conclusion from our 
simulations are that if you are focusing and interested on sort 
of what is likely to happen in the future, then projecting 30-
year federal careers for workers would result in the FERS 
retirement package being higher, on an order, I think, of 20-
something or 30-something percent, than the typical FECA 
benefit package under the revised FECA amount.
    Mr. Scott. Did you calculate the money contributed to 
Social Security and the effect that it would have on your 
Social Security benefits?
    Dr. Sherrill. Yes. We had actual earnings data on the 
uninjured federal counterparts for their actual TSP, actual 
Social Security, and actual FERS annuity amounts.
    Mr. Scott. And when the dust settled, the person who 
continued to work was significantly better off than the person 
who you are trying to compensate at the same level.
    Dr. Sherrill. Yes, for the median person.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Walberg. Will the gentleman yield?
    Mr. Scott. I will yield.
    Chairman Walberg. Just picking up a little bit of time 
here, let me go back to Mr. Howie, and further explain for us--
because I think that was a great approach and questioning. Can 
you please explain the savings associated with the proposed 
reforms in more detail?
    And you said it wasn't done necessarily for savings, but it 
was to set a standard to make sure that equity was in place. 
Touch on that a little bit more.
    Mr. Howie. In the years of administering the program, part 
of the assertions that have been out there in the public sphere 
is that the FECA program is too generous. We started from the 
presumption of really exploring whether that was the case.
    So we can use information like was obtained in the GAO 
study to show that yes, FECA recipients do receive income--or 
do receive compensation at higher levels than employees who are 
not injured. That is one data point.
    And we also have--when you look at--on the retirement 
issue, you can look at the measure of--or how employees feel, 
where they stand on the--I guess the--how rich their benefits 
are going to be when you compare it from FECA to the retirement 
system. Of the 41,000 claimants that we have on the periodic 
rolls, about 17,000 are at the retirement age and they are 
still drawing FECA benefits.
    So just the fact that we have employees who are at 
retirement age who are still on the FECA system instead of the 
retirement system is about as strong an indication as we can 
have that those benefits are more generous, and----
    Chairman Walberg. I thank the gentleman for yielding.
    Mr. Scott. Mr. Chairman, on that point, they would be more 
generous and that is the point, because your retirement 
benefits are so much lower because you didn't work, you didn't 
contribute to the retirement system, the TSP, you didn't get 
your matching, your Social Security is less, and you would be 
better off with FERS. But your comparable employee--your 
colleague would be making a lot more on retirement than you are 
struggling with FERS. That is the point that Dr. Sherrill was 
making.
    Chairman Walberg. The gentleman's time is expired, and we 
probably could go on. And I appreciate you yielding, and it is 
an issue we need to look more closely at, so thank you.
    I now recognize the Chairman of the full Education and 
Workforce Committee, the gentleman from Minnesota, Mr. Kline.
    Mr. Kline. Thank you. Thank you, Mr. Chairman.
    Thanks to the panelists for being here.
    I guess we are going to keep--this is what this hearing is 
all about, so we are going to keep rolling around about the 
retirement issue and how does that work with FECA benefits, and 
so forth.
    So let me back up, Mr. Howie. You said that you were 
protecting or not going to affect those employees currently 
retired or receiving benefits and it was going to be 
prospective.
    At what point would their--your new system step in? As a 
brand new hire? At the date of retirement? The date of injury? 
When would it come into effect?
    Mr. Howie. It is the date of--well, once the approval is 
given and the statute is enacted, it is the date of injury. So 
anybody who was--who has a date of injury after this becomes 
effective, they are under the new system.
    Mr. Kline. Okay. So they could be an employee for 20 years 
but you would still--if you had an injury then you would come 
under the new system, assuming all this was enacted.
    Okay. We were just a little bit confused. I guess I could 
have read it a little bit more carefully and had the answer, 
but thank you for that.
    So there is the discussion about why you are doing this, 
and Mr. Scott was talking about that. Could you again, one more 
time, tell us what the policy rationale is--the policy 
rationale--behind treating benefits differently at retirement 
age is?
    Mr. Howie. The policy rationale is that it is--in order to 
maintain equitable payments and equitable situation for 
employees who are similarly situated, the injured employee 
should receive a level of compensation that is roughly 
equivalent to that non-injured employee.
    So in this case, we actually did run this issue also by 
OPM, and they too concurred that the 50 percent rate would make 
it relatively equivalent to the compensation that an employee 
would get under FERS.
    Mr. Kline. Okay. There was a discussion about--I think, Mr. 
Howie, you talked about being more efficient and effective, and 
Mr. Scott was talking about was this to save money or to make 
the program better, and so forth.
    And so I want to go to Inspector General Dahl. In your 
testimony you testified to the need to adjust benefits when a 
claimant reaches retirement age. Presumably you looked at GAO's 
work in this area. I see you are nodding your head, so that 
would be an affirmative.
    So let me ask the question this way: Would altering 
benefits for workers at retirement age make the program more 
efficient and effective overall?
    Mr. Dahl. Chairman Kline, it is--for us it is not so much a 
question of making it more efficient and effective, because we 
haven't studied that, but it is more of a policy issue that we 
defer to the policymakers to decide on. Chairman Walberg and, 
actually, Ranking Member Wilson both said striking that balance 
between being good stewards of taxpayer money and providing a 
fair compensation to injured workers.
    And so that is why we are recommending that the retirement 
age issue be reassessed as a policy question, to strike that 
balance and consider some of the factors that GAO analyzed in 
its study, the algorithms and the simulations that Dr. Sherrill 
referred to.
    Mr. Kline. Okay.
    Thank you. I yield back, Mr. Chairman.
    Chairman Walberg. Thank the gentleman.
    I recognize the gentleman from Wisconsin, Mr. Pocan.
    Mr. Pocan. Thank you, Mr. Chairman.
    And thank you, to our guests here today.
    So let me focus on a couple of things. One, first of all, 
this just seems like the idea is still--I don't want to call 
it--it is not fully baked. I am not saying it is half-baked, 
but it is not fully baked in that we seem to be tending 
towards--rather than focusing on the inspector general, who 
just had a number of ideas to deal with the fraud that is out 
there, but when you have got 98 percent of people going back 
within two years, you have got a system where fundamentally 
people are going back to work.
    And if you are trying to deal with some savings--and I know 
you say there is a policy process to this, as well--it just 
seems that we are going a little too far, I think, in some of 
the changes. And let me just bring up a couple things that were 
said that I don't know if were completely accurate, which is 
part of why I say this is not fully baked.
    I know one of the things--and while we are--we should be 
somewhat assured that it is a prospective policy, I think, you 
know, people here still realize it is going to be someone else 
who is going to be in the exact same situation they are in in 
the future that are going to be affected. So while it may not 
affect the people sitting directly behind you, it is still 
going to affect people who are working in the same jobs as 
those people, so it doesn't provide a great reassurance.
    I think one of the things, Mr. Howie, that you said was no 
other program in the Federal Government allows for additional 
money for additional benefits, but I know at least the Black 
Lung Program, for example, does. So there are some programs, 
and I would like to know, you know, where else that might 
occur.
    I think one of the things, also, that you said was that 
states are capping this. If I understand right, about 14 
states. Thirty-six don't, including my state of Wisconsin, 
although sometimes I think we are in the same race to the 
bottom that Frederica was talking about.
    I hate to see the Federal Government get in front of the 
line to race to the bottom when it comes to this, because 36 
states aren't capping this, so we really would be running to 
the front to do that.
    And I think one of the other things that was said was that 
50 percent figure was the roughly equivalent, based on the OPM 
report, but that was based on the CSRS, not on FERS, so it is 
another difference when it relates directly to some of the 
people that are here.
    So just the fact that in a few minutes in this, you know, 
hour we have had so far, we have got some inconsistencies, 
perhaps, to what is out there tells me I don't know if we are 
100 percent there.
    One of the things that I do think really stands out is in 
the GAO report, when specifically they are looking at benefits 
for missed career growth as part of the formula that we do, and 
I don't believe that is part of this proposal.
    So I was hoping that Dr. Sherrill, first, if you could talk 
a little bit about it, and then maybe Mr. Howie respond to why 
it is not included, would be very helpful.
    Dr. Sherrill. Your question is the reasons for taking 
account of missed career growth?
    Mr. Pocan. Yes.
    Dr. Sherrill. Yes. Several reasons. First, it provides a 
more realistic basis for assessing the adequacy of benefits. 
Second, the National Academy of Social Insurance in 2004 had a 
study panel on benefit adequacy in which they talked about the 
technique of matching injured workers to comparable uninjured 
workers as the current, quote: ``state of the art'' in doing 
benefit adequacy studies.
    OPM's own briefing slides on FECA recipients transitioning 
to retirement talked about the standard at--of retirement 
should be comparable to the amount the FECA beneficiary would 
have received had they completed their career and not been 
injured, i.e., assuming that you take account of missed career 
growth.
    So those were all the reasons we took that into account in 
our analysis.
    Mr. Pocan. And that is a factor.
    And then, Mr. Howie, just why it is not in what you are 
looking at?
    Mr. Howie. Well, it is not in our proposal because it is 
not part of the current law. We do not take into account missed 
career growth.
    Our FECA program, it is not a surrogate for the career 
growth issue and it is not a replacement for the federal 
retirement system. It is to provide compensation for lost 
wages.
    So this is the appropriate conversation to have, whether 
there is a change in law that is needed, but currently that is 
just not our law.
    Mr. Pocan. So this kind of piggybacks on what Ranking 
Member Scott was asking specifically about--what if someone who 
is younger gets injured, they are not only not going to have 
the career growth potential, but also the lack of paying in is 
going to show a reduced benefit. How do you address that 
concern, since the time ran out when he was asking that 
question?
    Mr. Howie. I am sorry, can you----
    Mr. Pocan. When Ranking Member Scott was asking 
specifically about if a younger, you know, person who gets 
injured, they are not going to continue paying into the system. 
That is going to have a depressed--what they are going to be 
receiving at retirement anyway. Again, not considered in the 
report that you have.
    Mr. Howie. Well, keeping with the basic principles and what 
we are doing here, that 70 percent payment is not at a level 
that is dramatically different from what is being received. It 
is roughly equivalent to the payments that are out there.
    So again, we are not joining that----
    Mr. Pocan. If I can just reclaim my time, I just want to 
end with this. I am reading the example of Roy Rondeno, who 
spent his entire life working for the Postal Service and went 
in on a day off. And you look at the story, and I am sure you 
are familiar with the story: injured, went through surgeries, 
wanted to get back to work, and died on the operating table.
    If that had happened to someone 20 years earlier in their 
career, they will be disadvantaged under the proposal that is 
on the table. And I think that we have to keep things like that 
specifically in mind because it affects very real people.
    And even though it is prospective, there are going to be 
future Roy Rondenos, and I just hope that we would have a plan 
that would take that into consideration.
    Chairman Walberg. I thank the gentleman. His time is 
expired.
    And now I recognize the gentleman from California, Mr. 
DeSaulnier.
    Mr. DeSaulnier. Thank you, Mr. Chairman. And I really do 
think this is a good hearing, I must admit a little frustrating 
as being a freshman who, as the Ranking Member said, when I was 
in state government I--mostly because most of my colleagues in 
both parties didn't want to get them involved in workers' 
compensation reform, I wasn't bright enough to avoid that. So 
it is a little frustrating to sit here because it seems to me 
that this should be less emotive and more driven by evidence 
base, as Mr. Watson said.
    So I have a question for you, Mr. Watson, but--in that 
regard, and also for Mr. Howie.
    So it should be about prevention, and then it should be 
about the 98 percent that we get back to work so quickly in two 
years. So you--it seems to me--maybe this is a little 
sophomoric--but you should consider the total compensation, and 
if it needs a change in statute then that should be one of the 
recommendations.
    So, Mr. Watson, you said that there was a lack of evidence 
base in the proposal and the decision-making process by the 
Department. Would you like to add to that?
    Mr. Watson. Yes. I would like to add to that.
    I read the GAO studies, both the old ones regarding CSRS, 
comparing CSRS retirement benefits to FECA benefits from many 
years ago, and the newer ones in 2012. There is also a 
Congressional Research Service study on FERS benefits.
    And I don't see anything in those reports that supports the 
idea that OWCP's 75 percent rate for an injured worker with a 
family somehow is a disincentive to return to work. I don't see 
it.
    And as I have listened to the numbers that I heard in 
testimony today, 119,000 injuries annually reported, only 2 
percent of those on long-term disability. And I might add, only 
employees who are totally disabled--and that is to say--that is 
an economic concept, not primarily a medical concept--only 
employees who are totally disabled, they are not able to do 
medically their date-of-injury job and they are not able to do 
any other job, they are the ones who get 75 percent.
    Partially disabled employees, those who are able--not able 
to do their date-of-injury job but are able to do some other 
work, they don't receive the full 75 percent. OWCP is required 
by the FECA to proportionally reduce that 75 percent that they 
get by what OWCP determines is their remaining wage-earning 
capacity.
    And so I don't know what percentage of these 41,000 on the 
rolls are partially disabled, but whatever percentage that is, 
those people are not receiving 75 percent of their date-of-
injury salary; they are receiving 75 percent of their date-of-
injury salary minus OWCP's determination of their remaining 
wage-earning capacity.
    Mr. DeSaulnier. Dr. Sherrill----
    Mr. Watson. And so----
    Mr. DeSaulnier. Can I ask Dr. Sherrill a question?
    So given what you have done, would it be your expectation 
that we would actually have long-term cost savings from the DOL 
report?
    Mr. Watson. I am sorry. Would you repeat the question?
    Mr. DeSaulnier. It is directed at Dr. Sherrill, Mr. Watson.
    Dr. Sherrill. I am sorry. Was the question about whether 
the proposal would have cost savings?
    Mr. DeSaulnier. In the long term, given what you--given the 
research that you have done.
    Dr. Sherrill. We did not look at the issue of cost savings. 
We just focused on sort of how people would likely fare, in 
terms of benefit levels, under the proposals.
    Mr. DeSaulnier. Well, not an extreme jump to suggest that 
if your--what your testimony is correct, that there might be 
cost savings, Mr. Howie, in the near term, but over the long 
term prospectively that would not be the case. Would you be 
concerned about that?
    Mr. Howie. We do project the savings because of the sheer 
number of the reduction in the rate.
    Mr. DeSaulnier. Would you expect that 98 percent would 
actually go down with this, so that people would be going back 
to work within two years faster?
    Mr. Howie. Well, it is our hope that everybody gets back to 
work as fast as they possibly can. That is why we are here. 
Those are the services that we provide.
    And as the numbers indicate, the lion's share of employees 
are eager to get back to work. And that is our mission to help 
them.
    Mr. DeSaulnier. Okay.
    I see my time is almost up. Thank you, Mr. Chairman.
    Chairman Walberg. I thank the gentleman.
    And now I recognize the gentlelady from Ohio, Ms. Fudge.
    Ms. Fudge. Thank you very much, Mr. Chairman.
    I thank you all for being here and for your testimony.
    I want to, of course, recognize our young people who are 
here today for foster care day. Thank you for being with us.
    I want to just say this is really kind of personal with me. 
My uncle was a letter carrier for 42 years. Today I have a 
first cousin who is a postmaster that worked her way up through 
the system. So I just want to put that out front for you right 
now.
    Director Howie, in your testimony you stated that the rate 
of compensation creates a ``direct disincentive''--your words--
to return to work. Are you aware that in this hearing room 
today there are letter carriers who have suffered significant 
traumatic injuries to their legs as they were crushed between 
vehicles performing their regular duties, yet they have managed 
to return to work? I don't think that that supports your 
proposition that they have a disincentive to return to work.
    On page five of your testimony you state that in fiscal 
year 2014 fewer than 13,000 claims involved a significant 
period of disability. You suggested 88 percent of those 
claimants return to work within the first year of the injury, 
and a full 91 percent return within the second year. In fact, 
you state that less than 2 percent of the 119,000 new injury 
cases remain on the long-term compensation rolls.
    So it does not appear to me that your statement would run 
in direct contradiction to your claims. It just doesn't make 
any sense.
    Mr. Watson, do you agree with the Department's assessment 
that injured workers are looking for a disincentive to return 
to work?
    Mr. Watson. I do not agree with that. My experience has 
been that the big problem letter carriers face is convincing 
the Postal Service to let them come back to work when they 
remain disabled from their letter carrier jobs. That is a huge 
problem for us. It is not my experience at all, what you said.
    Ms. Fudge. As well, could you tell us what role FECA has 
played in assisting the workers that accompanied you today and 
others like them? Mr. Watson?
    Mr. Watson. I am sorry. Would you repeat the----
    Ms. Fudge. Could you tell us how FECA has played a role in 
assisting the workers that you brought with you today?
    Mr. Watson. Yes. As the law exists right now, there are 
restoration rights to injured workers who partially recover, as 
well as fully recover, from their injuries.
    But Department of Labor does not exercise authority over 
those restoration rights. Instead, it is OPM who has authority 
over the restoration rights.
    So, for example, if Department of Labor issues an adverse 
decision regarding a claim, an employee can appeal within OWCP, 
within Department of Labor. But if an employee disagrees with 
an agency decision regarding restoration, they cannot appeal to 
OWCP; they have to appeal to the MSPB, the Merit Systems 
Protection Board.
    And so there is this separation between OWCP's authority 
and injured employees trying to get back to work 
unsuccessfully. I think that Congress could look at that 
discrepancy and consider doing something about it.
    Ms. Fudge. I mean, it is just so interesting to me that we 
have employees who want to go back to work and they won't let 
them come back. Very different from everything that we have 
been hearing in these reports.
    I just want to say to the letter carriers who are here, I 
appreciate what you do every day. You know, people talk about 
they want to privatize the Postal Service. There is no other 
group of people who are required to deliver to every house 
every day but you. So we appreciate what you do.
    I thank you, and I yield back, Mr. Chairman.
    Chairman Walberg. Forgive me for not listening to last 
yielding. I appreciate it.
    We have 42 seconds remaining. Could I ask the gentlelady to 
yield to me?
    Let me ask this question, because I think it goes to 
previous questions, of Mr. Howie. How does the Department plan 
to expand the assisted reemployment program, which allows OWCP 
to provide a subsidy to provide--to private employers, as I 
understand it, in an effort to encourage hiring of qualified 
rehabilitated workers?
    Mr. Howie. Well, currently the--we have authorization to 
provide assisted reemployment services for private sector 
employees, and that is a--it is an ongoing process. We have a 
customer base, as you will, that are--that have been injured 
and may have some significant limitations coming back to work, 
so the--more or less the advocacy that is required to convince 
our private sector partners out there to participate is an 
ongoing process.
    What we are asking in this case in this reform is to permit 
us to have that same relationship with the public sector, so 
with other federal agencies, because if there is one thing that 
we know is that if employees--if injured employees are 
permitted and have opportunities to remain within the Federal 
Government then they are more than willing to go back there 
because we know that the--their outcomes, their economic 
outcomes are better if they are back at work, and the Federal 
Government is a logical place to put forth a lot of that 
effort. So that is--we really want the authorization to 
strengthen those ties.
    Chairman Walberg. So there is an effort to do that; you 
just need the authorization. I just want to make that clear.
    Mr. Howie. There is an effort on the private sector side. 
But on the public sector side we need the----
    Chairman Walberg. We need the authorization. Okay. Well, 
thank you.
    I thank the gentlelady for yielding, and her time is 
expired so I will yield it back for her at this point.
    And now I recognize the gentlelady from Oregon, who is not 
a member of the subcommittee but is a member of our full 
Education Workforce Committee who has a strong interest in this 
area and has chosen to sit with us today. We are delighted for 
that, and so I recognize Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and thank 
you, Ranking Member, as well, for allowing me to participate in 
the subcommittee hearing.
    And thank you, to our panel of witnesses.
    I would especially like to thank Mr. Watson for traveling 
from Oregon to testify on behalf of the National Association of 
Letter Carriers. It is great to have an Oregonian contributing 
to our work here in Washington, D.C., and I greatly value your 
comments and your work advocating for letter carriers.
    Workers' compensation and FECA are an important part of the 
workforce safety net. My Oregon office has been working on a 
case for a constituent who was injured in an accidental 
shooting during a training exercise at the federal prison in 
Sheridan back in 2007.
    His wife had to leave her job to stay at home and help take 
care of him, and they struggle financially. They were once a 
two-income family and are now solely dependent on workers' 
compensation benefits to survive.
    So given this and many other cases like it, I am very 
concerned about proposals that would lower benefits for 
workers, especially with dependents.
    Mr. Watson, it is important that workers' compensation 
benefits and FECA benefits are based on the core principle that 
federal workers should be no better off and no worse off than 
if they had not been injured or made ill on the job. So what 
additional principles should guide this committee in evaluating 
the adequacy of benefits?
    Mr. Watson, what should we be looking at to evaluate the 
adequacy of benefits?
    Mr. Watson. If I may apologize to the Committee, I have 
hearing aids and one is malfunctioning, so I am having a really 
hard time hearing. I am so sorry.
    Ms. Bonamici. I could repeat the question. So it is 
important that workers' compensation benefits are based on the 
core principle that federal workers should be no better off, no 
worse off than if they had not been injured or made ill on the 
job.
    So are there additional principles? That is very important, 
but what else should guide this Committee in evaluating whether 
benefits are adequate?
    Mr. Watson. I am sorry. Are you asking are there additional 
principles to that ``no better off''?
    Ms. Bonamici. Yes.
    Mr. Watson. I think that is the fundamental principle. I 
think that is the idea. I think the idea of fairness is 
encompassed within that principle.
    Ms. Bonamici. Terrific. Thank you.
    And about 25 years ago in the face of high rates of 
workplace injury and high workers' compensation costs, Oregon 
brought management and labor to the table to enact 
comprehensive workers' compensation reforms, and Oregon now has 
very low costs and has managed to maintain the benefits 
available to workers even while many other states have reduced 
benefits. And most importantly, Oregon has seen a 50 percent 
reduction in workplace injury and illness over the last 25 
years.
    I know at least 33 states have reduced their benefits or 
made it more difficult to qualify, while Oregon, because of 
that work that has been done over the last couple decades, 
still has low rates and high benefits.
    So, Mr. Watson, are there lessons that we can learn here in 
Washington, D.C., in Congress from Oregon's experience that 
could help us reduce the number of workplace injuries and 
reduce costs while continuing to provide fair benefits to 
injured workers?
    Mr. Watson. I think so. I think so. I think we can learn 
from the Oregon lesson if the parties work together to make the 
system better.
    I know that we have agreed already to certain reforms that 
were encompassed in H.R. 2465 a couple years ago. I think those 
were sensible and common-sense reforms.
    Certainly we agree with the idea that it should be easier 
for Department of Labor to obtain Social Security information. 
Right now OWCP can require an employee to sign the agreement to 
provide Social Security information, but you could make that 
more efficient and easier. I think it is a good idea.
    Ms. Bonamici. We appreciate your input.
    The GAO testimony on page 22 shows that the Department of 
Labor's proposal--under that proposal, disabled postal workers 
could see benefits that are 22 to 29 percent below what they 
would have earned if they had not been injured or worked a full 
career. Does that uphold that core principle of people injured 
on the job should be no worse off than if they were not 
injured?
    Mr. Watson. No, of course it does not.
    Ms. Bonamici. No, it does not. So I look forward to working 
with you and others to make sure that we can come up with 
policy that upholds that principle that people should be no 
better off but no--definitely no worse off than if they had not 
been injured on the job.
    Mr. Sherrill, the Department of Labor has argued that 
benefits should be cut by up to 33 percent on the hypothesis 
that FECA benefits exceed what someone would have earned had 
they worked a full career and retired. And I know that there 
has been a statement that they want to be sure that workers are 
not overly advantaged in their retirement years compared with 
their non-injured counterparts.
    And I wonder, did GAO compare the two benefit level for 
workers in the Federal Employee Retirement System? And if so, 
what did they find?
    Mr. Sherrill. Well, when we did our comparison of the FECA 
benefits to the retirement package for their uninjured 
counterpart, as I mentioned before, we found sort of at the 
current level FECA is more generous than FERS. Under the 
proposal--the Department of Labor's proposal--to reduce the 
level at retirement we found that the packages were roughly on 
a par.
    But then when we did the final simulation looking at under 
a mature FERS system with 30-year careers on average, what 
would that look like? The final result was that the FERS 
packages--retirement packages were higher; the FECA packages 
were lower on a level of 20----
    Ms. Bonamici. I see my time is expired, but I know we need 
to be talking about missed career growth, as well.
    So thank you, Mr. Chairman, and I yield back.
    Chairman Walberg. I thank the gentlelady.
    And I thank the panel for your answers, your willingness to 
address the questions that this panel has asked of you. I thank 
you for your involvement in this issue, as well.
    And I thank the subcommittee for paying attention to it.
    So now at this time I recognize the gentlelady from 
Florida, Ranking Member, Ms. Wilson, for any closing remarks 
she might have.
    Ms. Wilson. Thank you, Mr. Chairman. I want to thank you 
again for holding this hearing and giving us the opportunity to 
review the Department of Labor's proposal to reform the Federal 
Employees' Compensation Act.
    I also want to welcome Kenesha, from Miami, Florida, who is 
shadowing me today from foster care, and she is on TV.
    Let me just say that I have great respect for the 
Department of Labor and the Office of Workers' Compensation 
Programs.
    That being said, I strongly urge the administration to 
reconsider its proposal to cut benefits under the FECA. These 
cuts are not fair. They are not fair to federal workers.
    Let us remember that FECA provides coverage for 2.8 million 
federal civilian workers, from postal workers to FDA 
scientists, across more than 70 agencies and all three branches 
of government. That means these unfair cuts would affect the 
law enforcement agents entrusted with protecting our borders, 
the prison guards tasked with working in overcrowded prisons, 
and the federal firefighters charged with battling unwieldy 
wildfires.
    In fact, FECA even covers members of Congress. Our beloved 
former Congresswoman Gabrielle Giffords relied on FECA to cover 
her medical costs and lost wages after she was viciously gunned 
down while convening a small town hall meeting called 
``Congress on Your Corner.'' Her injury reigned fear in the 
hearts of every member of Congress, knowing that we are all at 
risk.
    We are considering these benefit cuts in the name of budget 
reconciliation, but I want to remind the Committee that we do 
not have specific instructions to make cuts here.
    We cannot make budget cuts on the backs of injured federal 
workers. We cannot make budget cuts on the backs of the 
widowers, widows, and orphans who have lost a loved one due to 
federal service, like Osvaldo Albarati's widow and his orphans. 
We cannot make budget cuts on the backs of federal workers who 
are permanently disabled and unable to build towards a secure 
retirement, like the postal workers represented here today.
    In truth, the best way to reduce benefits under FECA is to 
reduce workplace injuries and deaths. But, regrettable as it 
is, injuries and deaths do occur. When they do, we must ensure 
that the workers who have committed themselves to federal 
service are honored by a system that does not leave them and 
their families financially worse off than if the injury or 
death had not occurred.
    I hope my colleagues remember this as we consider this 
proposal in the future.
    And I yield back the balance of my time.
    Chairman Walberg. I thank the gentlelady, and I thank her 
for her sentiments--I think sentiments we all feel.
    If there is one thing that I just absolutely hate that 
seems to be a--and my mother if she heard me say the word 
``hate'' would be attacking me for that--but I hate the fact 
that bad things happen to good people. I mean, I am looking out 
at good people here, and I am looking at good--two good people 
that it happened to their loved ones, and they no longer have 
their loved ones with them except in wonderful memories. And 
those are bad things happening to good people.
    My esteemed colleague, even Congress can't stop that. But 
you are absolutely right, and we ought to do our best to make 
sure that we care for, in a fair and just fashion, those that 
have committed to serving our constituents, our citizens, in 
some very important functions.
    But it is an issue of people. People here in this room.
    But it is also an issue of numbers. And we have good people 
who are put in responsible positions to make sure that we have 
systems that are there and will continue to work the best way 
possible--not to hurt people who are presently receiving this 
help, but to make sure that there is a system that continues 
on. And that deals with numbers.
    But then we look at people--again, taxpayers who expect 
certain things to be carried on. But they also have bad things 
happen to them that impact their lives, as well. And that 
frustrates their ability to carry on with the resources 
necessary to support the functions of government and agencies 
and individuals that carry that on, as well.
    So we have got people, numbers, people, numbers, and it 
goes back and forth. Our concern here on this subcommittee is 
to make sure that we combine those people and numbers in a 
productive way that, to the best of our ability, provides fair 
and just outcomes.
    We can't bring about perfection. And that is what I 
appreciated about the bill that we passed out of the House here 
several years ago. We worked to a compromise. We worked in a 
bipartisan fashion.
    I think it can be done again, but it has to be done 
relative to understanding that there is only so much that we 
ultimately can do with the resources we have. So let's find a 
way to do it as best as possible so future employees that take 
on the good work and effort to carry on the functions that our 
citizens ask us to carry on are carried on in such a way that 
all of us benefit in the process.
    And then--and I hesitate saying this, but I think it must 
be said as well, because it is reality--while we see people 
here in the room who want to be doing jobs for the organization 
they hired into, they carried on, and they were injured in the 
function of the duties there, we also want to make sure that we 
don't give any type of incentive--perverse incentive to still 
some others who may ultimately be pushed in the setting where 
they can act irresponsibly. Don't want to do that either.
    So let's find a way to make sure we incentivize people who 
want to do well, who want to continue and do good, and 
disincentivize people who will abuse the system.
    Now, if I could bring Solomon into the room with his sword, 
we would figure a way to cut it down the middle to make it 
work. But we don't have that so, Ms. Wilson, you and me and our 
subcommittee will continue to work.
    There being no further business, the subcommittee stands 
adjourned.
    [Questions submitted for the record and their responses 
follow:]


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    [Additional submissions by Chairman Walberg follows:]
    
    
    
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    [Whereupon, at 11:42 a.m., the subcommittee was adjourned.]

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