[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS FOR 2021
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
___________________________________
SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG
ADMINISTRATION, AND RELATED AGENCIES
SANFORD D. BISHOP, Jr., Georgia, Chairman
ROSA L. DeLAURO, Connecticut JEFF FORTENBERRY, Nebraska
CHELLIE PINGREE, Maine ROBERT B. ADHERHOLT, Alabama
MARK POCAN, Wisconsin ANDY HARRIS, Maryland
BARBARA LEE, California JOHN R. MOOLENAAR, Michigan
BETTY McCOLLUM, Minnesota
HENRY CUELLAR, Texas
NOTE: Under committee rules, Mrs. Lowey, as chairwoman of the full
committee, and Ms. Granger, as ranking minority member of the full
committee, are authorized to sit as members of all subcommittees.
Martha Foley, Diem-Linh Jones, Joseph Layman,
Justin Masucci, Perry Yates, and Randall Staples
Subcommittee Staff
___________________________________
PART 2
Page
USDA Office of the Inspector General.. 1
Hearing on FCA's Fiscal Year 2021 Budget Report..... 31
Food and Drug Administration_Status of Operations..................51
Members' Day.......................... 69
United States Department of Agriculture............................81
Food and Drug Administration.......... 117
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
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Printed for the use of the Committee on Appropriations
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U.S. GOVERNMENT PUBLISHING OFFICE
44-095 PDF WASHINGTON : 2021
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COMMITTEE ON APPROPRIATIONS
NITA M. LOWEY, New York, Chairwoman
MARCY KAPTUR, Ohio KAY GRANGER, Texas
PETER J. VISCLOSKY, Indiana HAROLD ROGERS, Kentucky
JOSE� E. SERRANO, New York ROBERT B. ADERHOLT, Alabama
ROSA L. DELAURO, Connecticut MICHAEL K. SIMPSON, Idaho
DAVID E. PRICE, North Carolina JOHN R. CARTER, Texas
LUCILLE ROYBAL-ALLARD, California KEN CALVERT, California
SANFORD D. BISHOP, JR., Georgia TOM COLE, Oklahoma
BARBARA LEE, California MARIO DIAZ-BALART, Florida
BETTY MCCOLLUM, Minnesota TOM GRAVES, Georgia
TIM RYAN, Ohio STEVE WOMACK, Arkansas
C. A. DUTCH RUPPERSBERGER, Maryland JEFF FORTENBERRY, Nebraska
DEBBIE WASSERMAN SCHULTZ, Florida CHUCK FLEISCHMANN, Tennessee
HENRY CUELLAR, Texas JAIME HERRERA BEUTLER, Washington
CHELLIE PINGREE, Maine DAVID P. JOYCE, Ohio
MIKE QUIGLEY, Illinois ANDY HARRIS, Maryland
DEREK KILMER, Washington MARTHA ROBY, Alabama
MATT CARTWRIGHT, Pennsylvania MARK E. AMODEI, Nevada
GRACE MENG, New York CHRIS STEWART, Utah
MARK POCAN, Wisconsin STEVEN M. PALAZZO, Mississippi
KATHERINE M. CLARK, Massachusetts DAN NEWHOUSE, Washington
PETE AGUILAR, California JOHN R. MOOLENAAR, Michigan
LOIS FRANKEL, Florida JOHN H. RUTHERFORD, Florida
CHERI BUSTOS, Illinois WILL HURD, Texas
BONNIE WATSON COLEMAN, New Jersey
BRENDA L. LAWRENCE, Michigan
NORMA J. TORRES, California
CHARLIE CRIST, Florida
ANN KIRKPATRICK, Arizona
ED CASE, Hawaii
SHALANDA YOUNG, Clerk and Staff Director
(ii)
AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS FOR 2021
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Tuesday, February 11, 2020.
USDA OFFICE OF THE INSPECTOR GENERAL
WITNESSES
PHYLLIS FONG, INSPECTOR GENERAL, USDA, OFFICE OF THE INSPECTOR GENERAL
ANN COFFEY, DEPUTY INSPECTOR GENERAL, USDA OFFICE OF INSPECTOR GENERAL
GIL HARDEN, ASSISTANT INSPECTOR GENERAL FOR AUDIT, USDA OFFICE OF
INSPECTOR GENERAL
PETER PARADIS, SR., ACTING ASSISTANT INSPECTOR GENERAL FOR
INVESTIGATIONS, USDA OFFICE OF INSPECTOR GENERAL
Mr. Bishop. The subcommittee will come to order.
We are gathered today for our oversight hearing, and we
will entertain the USDA Inspector General, Ms. Phyllis Fong. I
would like to welcome everyone to the subcommittee's first
hearing of the calendar year.
Thank you to our witnesses, Ms. Fong, Ms. Coffey, Mr.
Harden, and Mr. Paradis. I have a strong interest in your work
and what you do. We have got to do everything that we can
possibly do to eliminate fraud, waste, and abuse and
mismanagement. We need to ensure that all of the USDA programs
over which our subcommittee has jurisdiction and oversight are
operated with the best possible efficiencies in order to create
the best possible outcome for those who are customers of the
agency.
As I mentioned at last year's hearing, I have concerns
about the number of audit recommendations that remain open and
the agency's efforts to close them out. Your last semi-annual
report shows 351 recommendations that are still pending
corrective actions, some as old as 1996.
On the investigation side, it looks like the OIG Hotline
has had a pretty busy year with the number of complaints having
increased by more than 35 percent over 2018.
So today I would like to hear more about your plans to
conduct adequate oversight of USDA programs and the challenges
that you face in ensuring agreed upon recommendations are
implemented and complaints are appropriately addressed.
In addition, I would like to ensure that whistleblower and
civil rights issues are getting thoughtful and proper attention
throughout USDA.
I look forward to discussing with you those issues as well
as other important issues.
And I want to say, again, that we really appreciate all of
the work that the OIG staff does and all that you do to help
our government work more efficiently and effectively.
Now, our distinguished Ranking Member Fortenberry has been
delayed and I will defer his opening remarks until his arrival.
In the meantime, I will recognize Mr. Aderholt, a former chair,
for a welcome and any remarks that he might care to give at
this time.
Mr. Aderholt. Thank you, Mr. Chairman.
Well, welcome all of you, Ms. Fong, Ms. Coffey, Mr. Harden,
and Mr. Paradis. Thank you for taking time to be here. On
behalf of the ranking member this morning, who I know will be
joining shortly, we are always glad to have you to this
subcommittee to hear about your work in oversight. The work
that you do as oversight, of course, we deem as very important,
and what we look forward to hearing from you today are some
things that how we can try to help you with the funding process
to make your job easier, better, and more accountable to the
American people.
So with that, I will just close and say, we look forward to
your testimony, and thanks, again, for being here.
Mr. Bishop. Thank you, Mr. Aderholt.
And before Ms. Fong begins, a reminder to members that as
is customary with our subcommittee, our members will be
recognized by seniority for those who were here when I gaveled
the hearing to order and then in the order of arrival after
that, with some exceptions because members do have some
conflicting meetings and I will try to accommodate them to the
extent that we can. I would like to alternate majority and
minority members, and we will adhere to the 5-minute rule.
And, Ms. Fong, without objection, your entire written
testimony will be included in the record. And I will now
recognize you for your statement and then we will proceed with
questions. You may summarize or you may give an entire
statement. It is completely up to you.
Excuse me. Since Mr. Fortenberry has arrived, if I can
allow you to delay for a moment, I would like to recognize Mr.
Fortenberry as soon as he is able to be seated for any opening
remarks that he would like to give at this time.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Bishop. Mr. Aderholt gave a welcome and announced that
you would be arriving shortly. And so at this time, I would
like to recognize our distinguished ranking member, Mr.
Fortenberry, for any opening remarks that he might have.
Mr. Fortenberry. Thank you, Mr. Chairman. Thank you for
your indulgence. I apologize for coming late. I am sure Mr.
Aderholt's opening was lofty and eloquent as usual. So thank
you.
I will be very quick since I am delaying everyone.
Ms. Fong, thank you for coming, and thank you all for being
here. We have interacted for a number of years now and
appreciate your fine work.
So there are really three things. One is, you were charged
with the responsibility of overseeing programmatic integrity,
to make sure that the moneys add up, but as a second chapter of
that job, to make sure that there is program effectiveness. I
want to explore that question a little bit deeper.
Of course, we look for the possibilities of fraud and bad
actors in government programming that result in potential theft
or misuse of money, but also by putting up guardrails to your
work ensures that good people actually remain accountable and
that is important as well.
But the third part of this is not just the accounting and
the fraud or the waste, it is the idea of, again,
effectiveness, and I want to go into that a little bit deeper.
I am also simply going to ask you when we get to questions, if
you were sitting right here and I was sitting right there, what
would you ask me?
Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Fortenberry.
Now Ms. Fong.
Ms. Fong. Well, thank you very much, Mr. Chairman, Ranking
Member Fortenberry, Mr. Aderholt, and all of the members of the
subcommittee. We are very pleased to be here today, and we have
enjoyed our interactions with you over the past year in various
ways and on various issues.
And I want to just on behalf of the entire staff of OIG
thank you for your support over the years and your interest in
our work. It really means a lot to all of us to know that you
are watching us and that you care about what we do. So thank
you so much.
We mentioned, Mr. Chairman, that my written statement is in
the record, so I just want to spend a few minutes today talking
about some of the ongoing work that we have, which we may not
be able to get into in great detail, but I think it will give
you an idea of the issues we are dealing with, and then we can
get on to the questions and answers.
So in the area of security, safety, and public health, we
are currently looking at USDA agency's security controls for
managing user access to the IT systems. Cybersecurity is
critical to USDA, so that is why we are engaging in that work.
We are also evaluating APHIS' activities to ensure that dog
breeders comply with the Animal Welfare Act in response to
concerns by the members.
In the second area of our portfolio, to ensure that USDA
delivers program benefits effectively and with integrity, we
have a number of ongoing reviews of disaster-related programs.
And this is particularly in recognition of the funding that
your committee has provided to us over the past number of
years. We are really ramping up our oversight of disaster
delivery this year. We have got five audits in process across
the portfolio.
We are also looking at, in a different area of USDA, USDA's
implementation of the trade mitigation packages, as well as FAS
grant selection for the Agricultural Trade Promotion Program.
We recognize that trade is a very important topic for all of us
and we want to keep oversight of those funds.
In our third area of focus we are looking at the
Department's ability to manage its resources effectively to
deliver programs. And so we are always engaged in our annual
reviews of improper payments, that is a high priority for us,
as well as the Department's financial statements to ensure that
financial management is effective. We are also looking at the
Office of the Assistance Secretary for Civil Rights portfolio,
in particular their oversight of the civil rights program
complaint process. We want to ensure that that office is
handling those kinds of complaints appropriately and timely.
And then in the area of crop insurance, we are looking at
RMA's activities to improve insurance products developed by
private parties under Section 508(h) of the Federal Crop
Insurance Act.
I should also mention that in addition to these areas of
focus, we have a number of ongoing reviews in response to
requests from Members of Congress. Last year we received a
number of requests that we looked into various activities at
the Department, and these range across the Department's
portfolio. They concern topics such as FSIS swine slaughter
rulemaking, scientific research integrity and capacity,
potential duplication in housing programs, delivery of disaster
nutrition assistance funding to Puerto Rico, and SNAP
electronic benefits transfer services at farmers markets.
So I think that gives you an idea of the range of interests
that we are hearing from our oversight members in Congress.
So in closing, I want to just thank you, all of you, for
your continuing interest in our work. We appreciate the funding
you have made available to us, both through the regular
appropriation process as well as the disaster supplemental
appropriation process. And we hope that you support the
President's request for us for $100.3 million for fiscal year
2021.
Thank you very much, and we are happy to respond to your
questions.
Mr. Bishop. Thank you very much, Ms. Fong.
At this time, without objection, I would like to recognize
the gentlelady from Minnesota out of order as she is currently
chairing a hearing and we would like to make sure that she is
able to ask her questions before she departs.
Ms. McCollum. Thank you, Mr. Chair, and thank you to the
committee members for your understanding and respect.
Well, as you pointed out, you conduct audits, inspections,
and review, and make recommendations on how to improve USDA
programs and how they operate it. So I am here to ask for your
help.
Last year at a hearing I brought up to the Department of
Agriculture their abrupt decision to cancel a mineral
withdrawal study on the Rainy River Watershed in Minnesota. It
is adjacent next to the Boundary Waters Canoe Area Wilderness.
The study was canceled in 2018, 20 months into a 24-month
study, with nothing more than a one-page press release.
A year before, Secretary Perdue testified before the
Interior, Environment Subcommittee on May 25, 2017, that the
study would be completed and that, and I quote, ``No decision
will be made prior to the conclusion of that,'' end of quote.
Yet a decision was made when the Trump administration
officially renewed two Federal mineral leases for Twin Metals
in May 2019.
I have sent multiple letters to Secretary Perdue, along
with chairs from the Natural Resources Committee, first
November 2018 and again March 2019, asking USDA to release the
relevant documentation from the 20-month review.
I also asked the Secretary about the cancelation of the
study at the USDA budget hearing on April 2019. He told this
committee he knew what the Forest Service decision was based on
and he would do his best to provide documentation to us. I have
yet to receive any information or documentation from the
Secretary.
A nongovernmental organization has also tried to obtain
relevant documentation and correspondence, filing a Freedom of
Information Act request with the USDA. They received this most
entirely redacted document with the administration claiming
deliberative process privilege.
This is what they got. This is all I have gotten. I didn't
even get this. One page after another, nothing.
While it seems that the privilege applies to records as
predecisional, it seems clear that the Forest Service and the
USDA did make a decision when they canceled the study. They
made a decision when they canceled the study September 2018.
The taxpayer-funded information from the nearly completed study
has been denied to Congress, to the American people, despite
our numerous requests.
So that begins to beg a question: What is being hidden? I
want to see the parts of the study that were completed. When
should I be able to reasonably expect to get this from the
USDA? I think I have waited long enough. And would you say that
this level of reaction to a Forest Service study is normal to
have something so redacted? Can you help me?
Ms. Fong. I understand your concerns. I am not familiar
with the document itself, so I don't know if the exemptions,
how they were applied. And I can understand why you are
concerned.
My sense is I remember you bringing this up at our hearing
last year and it sounds like you engaged in direct dialogue
with the Secretary and the Department. I am not sure what we
can do to help at this point, but we would be happy to chat
with you.
Are you involved in any of that, Gil?
Mr. Harden. No, we are not involved with it, but what I was
going to offer is that if we can get together with your staff
to maybe formulate some questions that we might be able to look
at.
Ms. McCollum. That would be terrific. Thank you so much.
Mr. Chair, to my fellow committee members, thank you very
much. I am going to return back to my committee to chair it.
Thank you, sir.
Mr. Bishop. Thank you.
Mr. Fortenberry.
Mr. Fortenberry. Ms. Fong, what should I ask you?
Ms. Fong. Well----
Mr. Fortenberry. I don't like when I get such questions
either. They are always the hardest. But sometimes it is
important to take a step back and ask a simple question. You
have the hands on and the eyes on in a much more intimate way
than we do. So what do you see?
I have a construct of various specific questions here and
we can go to that, but I would rather you tell me what I should
see.
Ms. Fong. Well, let me start by just commenting that we
find it extremely valuable to have the perspectives of Members
of Congress as we formulate our work and our priorities, to
have insight into what you see as challenges, information that
you may need to make your policy decisions. It helps us to
formulate priorities and to focus our oversight.
Mr. Fortenberry. All right. I will take responsibility
back.
Ms. Fong. No, seriously.
Mr. Fortenberry. Is China stealing our data?
Ms. Fong. Oh, well, okay.
We are very aware in the IG community as a whole, and the
IGs get together every month----
Mr. Fortenberry. At USDA.
Ms. Fong [continuing]. We are very aware of the general
threat by other countries, more than one, countries seeking to
steal data. We are very aware that the Department of Justice is
involved in these issues. There have been media reports on it.
We are monitoring it. We are engaged as appropriate. And we
would be happy to provide briefings whenever it is appropriate
for us to do that.
Mr. Fortenberry. Do you need to do that in another setting
or do you just not know the answer?
Ms. Fong. If there were briefings to be had, we would do it
in another setting.
Mr. Fortenberry. Okay. Thank you.
There are some reports that our food aid was not stored in
a safe and sanitary manner. Is our food aid safe?
Ms. Fong. You are referring to a recent audit that we did--
--
Mr. Fortenberry. Yes.
Ms. Fong [continuing]. On the storage by AMS of grain
destined to go overseas.
We found that the grain storage was not keeping the grain
safe. There were rodents and other infestations. We made some
recommendations to AMS to deal with those issues for oversight.
We certainly--I believe we reached management decision on those
recommendations. So we will be watching AMS to make sure that
they implement those recommendations.
Mr. Fortenberry. I would assume this is a specific incident
that is not generalizable to a larger trend?
Ms. Fong. The problem that we found was that AMS'
oversight, in general, lacked controls. They weren't exercising
the appropriate degree of oversight, as illustrated by the
situation we found in those specific grain storage places.
And, Gil, feel free to comment.
Mr. Fortenberry. Well, look, the United States is the most
generous country in the world in this regard, and we have a
very strong and well-deserved reputation for our outreach for
humanitarian purposes. So, again, if you can quantify--
certainly we don't want anything to spoil that reputation.
People, obviously, who are the recipients of this don't need to
read a news report that this might not be safe.
So that is why I am trying to quantify the extent of this
simple problem, easily corrected, an incident, or, let's be
honest, if it is generalizable to a larger scale issue, to
quantify the size of this problem.
Mr. Harden. We did quantify a certain amount of loss of
commodities that if AMS had looked at their processes and
procedures in terms of how the bags could have been restored
that they may not have lost as much for shipment to foreign
countries. And that merely meant being able to use food grade
tape on the bags to close up the holes as opposed to having to
bring somebody in to sew the bags shut. We identified about 1.7
million pounds that could have been----
Mr. Fortenberry. Just put that in context of the larger
quantity.
Mr. Harden. It is a small fraction of the----
Mr. Fortenberry. A very small fraction.
So this is actually a good outcome. You caught a very small
fraction of a problem before it was scaled to a bigger problem.
Is that a fair assessment?
Mr. Harden. Yes.
Mr. Fortenberry. Okay. And steps are under way to mitigate
this issue?
Mr. Harden. Yes, sir.
Mr. Fortenberry. Okay. All right.
Thank you, Mr. Chairman.
Mr. Bishop. Thank you very much, Mr. Fortenberry.
Ms. Fong, your annual plan indicates that you will address
whistleblower reprisal complaints. Whistleblower disclosures
expose waste, fraud, and abuse, and according to your website
can save lives as well as billions of taxpayer dollars.
Recent events have raised alarms about whistleblower
protections, especially against reprisal. Especially disturbing
are reports that whistleblowers are facing increasing
retaliations from within the agencies and managers are ignoring
OIG-substantiated reprisal cases.
I am concerned that the current climate of attacking and
making threats against whistleblowers may discourage
disclosures or penalize the people who try to do the right
thing.
First question. What have you noticed at USDA related to
whistleblower disclosures? And do employees feel protected when
they come forward? In cases where you found retaliation, do you
feel USDA management is responding timely and appropriately?
And the second has to do with USDA cooperation. I
understand that you are looking into several cases where USDA
may have concealed data or information that should have been
used in making policies, or at least they should have been
shared with the public. I am thinking of Ms. McCollum, her
inquiry to you. At best it could have been a rush to make
decisions without a sound data-driven basis, or worse, it was
an intentional attempt to hide contrary evidence.
Are you seeing this lack of reliance on facts in your
audits or inspections of USDA programs and is USDA cooperating
with your staff to provide all of the relevant information that
is necessary to do a complete job? How can you ensure that your
staff gets what they need?
Ms. Fong. Okay. Two very important topics for us as an IG
office.
Whistleblower protection is critical to our ability to do
our job. We take whistleblower protection very seriously, and
we do work with whistleblowers across the spectrum of our
activities in audits as well as in investigations.
Our policy is to treat anyone who brings information to us
as a potential whistleblower. And as you can imagine, in our
audits and investigations we talk to many, many people, many
employees.
We are responsible and we have the whistleblower
coordinator function within our office, which is the person who
provides information on whistleblower protection to all
employees of the Department.
Our coordinator does a tremendous job. She is certified by
OSC. And over the years we issue countless directives,
announcements to people telling them of the avenues available.
She is available to talk with anyone. We have a number of
people who reach out to her.
But let me just--you know, we could talk about
whistleblowers, many different aspects of it. We are very
committed to protecting them whenever we deal with them.
On the topic of data and whether we get access to what we
need, like any IG office, we need access to data that the
Department has. We have not had a situation where I have had to
go to the Secretary and say the Department is not cooperating.
We have not had that situation.
Now, we work very hard at the staff level, the management
level, the policy level to make sure that Department employees
understand their requirements to cooperate with us. We spend a
lot of time educating and informing new officials, new program
managers, about the need to cooperate and the consequences of
not cooperating. And as a result, I think we have a
constructive relationship within the Department at this time.
Mr. Bishop. The concern that I have is in the operation of
the various agencies and as they formulate policy, that those
policies are based not necessarily on fact-driven data. And in
your oversight and in your reviews of those agencies' functions
do you find that there are instances of that where decisions
are being made that are not fact based, which would taint the
quality and the integrity of those decisions?
Ms. Fong. Do you have any comments?
Mr. Harden. I have some general thoughts.
One, we have not had any findings----
Mr. Bishop. Your microphone.
Mr. Harden. Sorry, sir.
We have some general thoughts. We have had not had any
findings or report to date where we have come to that kind of
conclusion where what is being said is policy is not based on
fact.
With respect to using an example of the swine slaughter
inspection rule, we have questions that relate to data. And we
have been working with FSIS and they gave us access to the
information so we could answer the questions that were raised
to us.
Some of those questions deal with transparency requirements
or things made public. I am not ready to talk about those
conclusions just yet because we are in the final stages of
getting a draft report to the agency, having our typical exits
and their responding to it. But as soon as that is available,
if there is a desire to have a deeper discussion on that, I am
more than happy to do so.
Mr. Bishop. Thank you, Mr. Harden.
Mr. Aderholt.
Mr. Aderholt. Thank you, Mr. Chairman.
Again, thanks for being here. It is good to see you again.
Let me turn to the Improper Payments Information Act.
Although progress has been made, it is my understanding that it
is now the eighth consecutive year that USDA has not complied
with the improper payment requirements that are set forth by
the act.
My question is, is the Department making progress in
correcting these payments or are you finding the same problem
year after year in these programs?
Ms. Fong. Well, and you probably noticed in our testimony,
we reported that the Department made progress in fiscal year
2018 over the prior years. They have reduced the number of
overpayments, the payment IP rate went down, the number of lack
of compliances went down as well.
I do want to note that in the AFR for 2019, the Department
reported that its IP rate actually increased, and the number of
improper payments increased.
We are in the middle of looking at 2019 right now. We
should have audit results in May. So what that says to us is
that if the Department's reporting is accurate, that improper
payments continues to be a challenge, it is not going down. It
seems to be going--there is a slight upward trend.
We also see that in the SNAP improper payment rate, there
is a slight upward trend in the last year, and we want to take
a look at that as well.
Mr. Aderholt. Do you have any proposed timeline as far as
that you can at least let us know when there might be full
compliance?
Ms. Fong. I think perhaps the Department may be better
equipped to answer that.
But, Gil, you may have some insight.
Mr. Harden. I mean, I will take that question back to the
team and see if we can have some type of discussion. But that
is something that is going to come from the Department.
You know, as Phyllis pointed out, they have made progress
year over year. They are down to only having four programs that
are noncompliant, and it is really only noncompliance in two
areas for all four, which is much better than years past when
you had a wider improper payment problem.
Mr. Aderholt. Okay. All right. Well, if you could take that
back, that would be great.
Also in your testimony you raised the issue about security
of the information technology systems at USDA. Of course,
cybersecurity is something that not only USDA has to take
seriously but everyone has to take seriously. And I think all
of us are concerned to read that, by OMB's criteria, USDA's
cybersecurity is at an ineffective level.
Do you feel the seriousness of this deficiency is
appreciated?
Ms. Fong. I do believe the Department understands the
importance of the issue. We have seen them really focus their
attention in the last few years to addressing the
recommendations we have made. And the number of open
recommendations has gone down, so there is a concerted effort
to do this.
This year's review of IT security I think will be a
critical one. Last year the Department reported that it had put
into place a number of policies to address the issues that we
were finding. This is the year where we are actually going to
be looking to see if those policies are effective. So our 2019
review could provide some very interesting information.
Mr. Aderholt. What potential consequences would you be most
concerned because of the weaknesses there now?
Ms. Fong. I think with cybersecurity, as Mr. Fortenberry
mentioned, we would certainly--there is a risk that
unauthorized users could hack into the Department's systems,
could take advantage of the Department's information for
nefarious purposes, and just starting there, and then moving on
from there, proper payments.
Mr. Harden. Other instances of IT security that we have
looked at in the recent years deals with improper use. One of
the big types of incidences that was noted there was malware,
where you have software that is being put into place for not so
good reasons or to do harmful purposes. And bringing those
types of actions also to the Department so they are
concentrated and focused on making sure they are knowledgeable
of what the uses are, and then also referring those to the
right people so that action can be taken against the people
that committed those wrongs.
Mr. Aderholt. If I could just ask one more quick question.
I know my time is running out.
Broadband providers that are structured as partnerships are
prohibited from applying for the RUS ReConnect Program even if
they are long-established providers and they have qualified to
receive funding from the FCC's Connect America Fund and the
State broadband programs. Can you talk about why this
requirement is in place?
Mr. Harden. I can't really talk about the requirement
itself. I do know that we have been in discussions with the
Department as they have been rolling out the new approach to
broadband. I will take this question back as well as we start
to formulate an approach as to how we will look at it.
Mr. Aderholt. Thank you. Appreciate it. Thanks.
Thank you, Mr. Chairman.
Mr. Bishop. Mr. Pocan.
Mr. Pocan. Thank you, Mr. Chairman.
And thank you for being here today. Also thank you for
acting on a request from Representative Fitzpatrick and myself
about enforcement of the Animal Welfare Act. Looking forward to
see what comes out of that.
Let me start with a question around the Market Facilitation
Program. I know you are doing an audit. So a recent New York
Times report said that $67 million of the President's trade
assistance program went to JBS USA, a subsidiary of the massive
Brazilian meat-processing firm, via product purchases. In
comparison, every dairy farmer in Wisconsin cumulatively got
less than $43 million in trade assistance, so significantly
less than one producer.
Unfortunately, we are a State that is leading the country
in farm bankruptcies. We lost 1 of every 10 dairy farmers last
year alone. We have lost 1,800 family dairy farms in the last 3
years, almost 2 a day last year alone.
There was an article recently, I believe it was in the
Wisconsin State Journal, that talked about the farmers got
anywhere from $2 to $850,000, and 2,600 Wisconsin recipients
got less than a thousand dollars. And when you asked one of the
corn growers in specific, they said that what they got per
bushel of corn--and we did some similar number-crunching on
this--it was about a penny per bushel, when they are losing 45
to 50 cents right now because of what is happening with the
trade war currently and the situation with China.
Having said all that, it has got a huge impact in my
district. I want to get to two subjects, this is one of them. I
am just curious what we can expect in the OIG report. Will you
be looking at how they design and implemented the market
implementation program, and will you be investigating how much
money went to the agribusiness conglomerates like JBS?
Ms. Fong. Let me just make a few basic comments, and then
Gil will.
We are just starting our work on all of these programs. We
are going to start out with the basic issue of authority for
the programs, and then we are going to get into the design and
implementation, eligibility, and look at the producer
questions. So----
Mr. Harden. Yeah. And that will get into each of the three
individual programs that are part of the trade mitigation
packages.
We are also working with our counterparts in our data
sciences shop to get access to data so that we may have some
insights as to which producers got which payments. We really
haven't gotten far along to design the sample of producers that
we are going to look at, but that is something that we will be
on the ground looking at individual producers.
Mr. Pocan. Will you look specifically at foreign producers
versus dairy farmers and corn growers like mine?
Mr. Harden. I will say we will take that into
consideration. I don't see why we can't.
Mr. Pocan. I think it would be very helpful, just because,
again, when people are getting--the one quote from a farmer who
has been in my district many times, if I can find it here, he
basically said it is not going to make that big of a
difference. They can pass a few bills, but it is not going to
clear their debts.
I have had farmers who come in every single year ready to
pass on to the third generation a farm, who now are going to
sell their farm because they can't get by. So I think they
deserve some bigger answers. If we could do that in the
inspector general report, I know it would be appreciated.
Ms. Fong. Yeah, we should work with your staff because I
think we are still crafting the scope and objectives of our
reviews. And we know that there are a number of Members who are
interested in other aspects of the program, including whether
funds are going to underrepresented groups appropriately. So
there are a number of interests involved.
Mr. Pocan. We would love do that. We will take you up on
that. How does that sound?
Secondary, the swine slaughter modernization rule,
Representative DeLauro and I, I know, had put in the request.
We appreciate your taking a look at that.
There was a pretty damning ``60 Minutes'' report recently
on this, and even my 90-year-old mother, who often tells me how
much she loves Rachel Maddow at night, saw this report and is
afraid to eat pork. And I have had other people tell me that,
based on what is in here.
And they quoted the one scientist who was asked about the
speed rules, and they asked her about the modernization process
issues. I don't see modernization, I just see straight-up
deregulation in an industry that you want regulated. And then
it said they are doing almost 20 animals per minute, there is
no limit, the person responded, and they are supposed to be
inspecting on this line. She said, right. And it goes into
talking about how the number of inspectors were also reduced by
40 percent at the same time this is all happening.
This is clearly a situation I think that is going to cause
a lot more problems than anyone ever intended, because if
people are afraid to eat pork for that very reason, it is going
to have other outcomes that people aren't anticipating.
So when they were supposed to give data on how they said
this would make work line safer, at first they didn't give
anything, then they gave some data, and the data clearly had
some serious problems with what is in there.
So I guess as you look at your report there, are you
concerned about, first of all, them making unsubstantiated
claims? And how much work has been conducted on this audit so
far?
Mr. Harden. On this particular inspection, we have moved
through the questions that were asked. We do have findings and
recommendations that we are going to make to the agency.
Because we haven't delivered the report and the report is not
public, I can't talk about that right now.
But there are questions that we have had with them around
the topics that you talked about in terms of the data that was
made available, how much they talked to OSHA or how much they
talked to OSHA and the National Institute for Occupational and
Safety and Health and those questions.
Mr. Pocan. What is the timeline, I guess, then?
Mr. Harden. The timeline, currently we should have a draft
report, if all goes well, in a week or so to them.
Mr. Pocan. Okay, good.
Mr. Harden. Usually we try to set up an exit with any
agency after we give them the draft report. And a couple weeks
after that, then we make whatever changes we need to for an
official draft that they will have 30 days to respond to. So
best estimate, maybe early April, but there is a lot of stuff
that is fluid in there. But we can keep you apprised.
Mr. Pocan. Thank you very much.
Thank you, Mr. Chairman.
Mr. Bishop. Thank you.
At this time, without objection, with the courtesy of Mr.
Moolenaar, I would like to recognize the gentlelady from
California out of order, as she is able to go to another
hearing that she has imminently. And so I would like for her to
be able to ask her questions, and Mr. Moolenaar has kindly
allowed for her to ask her questions out of turn.
The gentlelady from California is recognized.
Ms. Lee. Thank you very much, Mr. Moolenaar.
Thank you, Mr. Chairman.
And thank you all very much for being here.
Appreciate you yielding.
Let me just ask you a couple questions with the regard to
the GAO reports on the Civil Rights Office. In 2008 and 2009
the GAO and OIG issued I think it was two reports that the
USDA's Civil Rights Office did not process work complaints in a
timely manner and then released incomplete records on the
number and types of complaints.
Then again in I believe it was 2015 and 2017, the Federal
investigators found that the Office of Civil Rights had
seriously mismanaged and had compromised the civil rights of
USDA employees.
I am also aware that Naomi Earp, USDA's recently resigned
deputy assistant secretary for civil rights, was only in the
job for a little more than a year.
And what is more, there is data clearly showing that--now,
this is really interesting and shocking really--that out of the
more than 300 civil rights complaints filed by employees in
2019, the Department only determined wrongdoing in two cases.
Clarify that for me, if that is inaccurate.
Finally, the fact that in the budget request there is a cut
to the Office of Civil Rights by $3.5 billion from fiscal year
2020, that is very concerning if, in fact, we care about civil
rights. I can't imagine this huge cut taking place.
And then secondly, I am aware that SNAP fraud is relatively
low, and I just wonder if you could tell us on average how much
time and taxpayer money is spent investigating these alleged
fraud cases and why.
Thank you again.
Ms. Fong. Let me just make a couple of comments, and then I
think Pete may have some.
In terms of civil rights oversight, we have a long history,
GAO and our office, of doing work to oversee the complaint
process, both by program participants as well as USDA
employees. We are currently engaged in an audit of how
effectively that office is handling complaints from people who
participate in USDA programs.
We also plan an audit in the next year or so--within this
year--to look at employee complaint processing, how complaints
filed by USDA employees are being handled by that office.
So I think we will take into account what you have brought
to our attention as we formulate our objectives on that, and we
should have more to brief you on.
Mr. Harden. And briefly, the work on program complaints
that is underway right now looks at some of those very
questions that you are asking: How fast did they process
complaints? Was that reasonable? Did they have support for the
decisions they made? Are their IT systems where they need to be
in order to support the decisions that are made? We will look
at similar type of documentation and support for decisions when
we look at the employee side.
Ms. Lee. Okay. I am glad you are looking at them. But these
complaints are real. And out of 300 complaints, only 2 were
found or determined that there was wrongdoing? That is accurate
or not? Or you are still investigating this?
Well, could you get back to us on that, please? Because
this is----
Ms. Fong. We will see what we can find out on that.
Ms. Lee. Yeah, yeah, appreciate that. Because this is real,
these are real lives, and civil rights is extremely important.
And if there are that many civil rights complaints and only two
were found--determined wrongdoing--then something structurally
within your--within USDA is wrong. I can't imagine this taking
place.
So thank you very much.
And on the SNAP investigations as it relates to fraud and
how much money you are spending on that? Because we know and it
is a fact that SNAP fraud is relatively low.
Mr. Paradis. Yes, ma'am. Approximately 43 percent of our
time in fiscal year 2019 for our investigative resources was
allocated to the investigation of SNAP fraud.
It is difficult to put a monetary assignment on that
percentage of time based upon the fact that each investigation
on its face is comprised of different facets. Some occur
quicker, some conclude over a much longer period of time.
Ms. Lee. Is it fraud versus error that you have found?
Because 43 percent is quite a bit of time.
Mr. Paradis. That is a number attributed to the
investigative effort associated with SNAP fraud.
Ms. Fong. Let me just add something here. In terms of where
we spend our investigative resources for SNAP fraud, we tend to
focus on retailers. Where we receive an allegation that a
retailer, like a store, is engaged in trafficking, we will
investigate those allegations.
Our focus is not primarily on beneficiaries. If there are
any concerns about beneficiary recipient fraud, usually State
law enforcement will handle those kinds of cases.
So to the extent that we are spending 43, 44 percent of our
resources on fraud, it is really to go after the stores who are
trafficking and taking away benefits from recipients who really
should be able to use those benefits to feed their families. We
want to go after people who are taking those benefits and using
them for illegal purposes.
Ms. Lee. Thank you very much.
Thank you, Mr. Chairman. Thank you.
Mr. Bishop. Mr. Moolenaar.
Mr. Moolenaar. Thank you, Mr. Chairman.
Nice to see you again, and thanks for being here today.
In your testimony, Ms. Fong, you talked about OIG audit
work identified more than $2.2 billion in questioned costs and
funds that could be put to better use. And I remember last year
talking with you about if the OIG had enforcement mechanisms,
and you said it is persuasion, is really the enforcement
mechanism.
One of the questions I have is, the top three agencies that
you found that contributed the majority to that figure and how
is the work at persuasion going with those areas?
Ms. Fong. Well, I think Gil has a lot to say on that, but
let me just remark that this past year the $2.2 billion in
audit results was a very unusual year for us. Usually we don't
report that volume of dollars. And most of it is attributed to
the audit we did of the EQIP program in NRCS. And we had to
exercise quite a bit of persuasion to reach management decision
on those recommendations.
Mr. Harden. Quite a bit of persuasion on how we presented
the information in the report as well, so that it was well
received.
The biggest portion last year, as Phyllis said, and it is
kind of an anomaly, was the EQIP payment schedules review that
we did. And why we took issue with so much money in that
particular program for the scope years that we looked at is
NRCS had put in place controls that, if they had used them,
would allow them to look at the payment schedules and look and
see if they are reasonable and reliable.
They had not applied those controls to the 3 years, I think
it was, that we have looked at, which is why we came to the
conclusion we did.
One of the things that we did want to point out, and it is
very important to point out for NRCS', I think for anybody's
point of view, we did not question the conservation practices
themselves. We were not on the ground. We were just basically
looking at how you were administering the payment schedules for
the program.
In most years there will be dollar amounts in various
agencies. We recently issued a report on multi-family housing
that had some concerns in terms of how that money was going out
the door. We have had concerns with grants at NIFA. So it kind
of covers the cross-section depending on what we look at.
Mr. Moolenaar. I guess I also want to follow up in terms of
the communication process with the agencies as well as
Congress. I was kind of interested, you had done some work
looking at disaster relief funding with respect to Puerto Rico,
and it seems that you identified a number of areas that could
be improved. You said: ``FNS generally agreed with most of our
recommendations, but further action for the agency is needed to
reach agreement on the remaining recommendation.''
So in Congress we recently, in the House, passed some
legislation on Puerto Rico. Do you feel that that was
incorporated into that legislation, or do we still have work to
do between kind of what we are doing here in Congress, what the
administration is doing to implement some of your findings?
Because I know this is real-time communication that really
is needed, and I am just concerned that you put out something
and we are doing something over here, and I don't know how much
communication goes on.
Do you have any thoughts on that?
Ms. Fong. Actually, I think that is a really good example
of a lot of successful dialogue, I believe. And we are not
privy to all the conversations. But as you mentioned, we issued
a report on the delivery of assistance in Puerto Rico, and we
found a number of issues, and that was for the first tranche of
assistance.
In the meantime, Congress appropriated a second grant,
which we are in the process of reviewing at this point. A
report will come out very shortly. And I think what we will see
is that there has been a continuum of effort in this area on
the part of the Department and potentially Congress as well.
And we are aware that there is a third potential appropriation.
And I think it tells a good story overall.
And the basic question being, what is the most effective
way to deliver nutrition assistance to Puerto Rico? I think
that is a very difficult issue. The Department is wrestling
with it, and I think they are making progress. That is not to
say that there aren't other views that you all might have.
Mr. Moolenaar. Okay. Well, thank you. Thank you for the
feedback on that.
Thank you, Mr. Chairman.
Mr. Bishop. At this time I would like to recognize the
gentlelady from Connecticut, the former ranking, chair of this
subcommittee, Ms. DeLauro.
Ms. DeLauro. Thanks so much, Mr. Chairman.
And welcome to all.
Ms. Fong, it is great to see you again.
I am concerned about the continued and substantial payments
to U.S. subsidiaries of the corrupt Brazilian-owned and
controlled meat packer JBS.
Trade package, JBS has received a little over $100 million
in payments. That money, I might add, was supposed to have been
for struggling farmers, ranchers, who have been hurt by the
administration's failed trade policies.
Unlike farmers and ranchers, JBS also receives payments on
an annual basis, and that is through USDA's Agricultural
Marketing Service. In fact, U.S. taxpayers have subsidized JBS
to the tune of tens of millions of dollars over the past
several years. It is a problem, because according to the
Federal Acquisition Regulation and related USDA policy,
government contractors must have, and I quote, ``present
responsibility.'' I am not going to go through the explanation
of that, it is too detailed, but you know it. And accordingly
the present responsibility can be impacted by fraud, bribery,
other violations of Federal laws.
JBS is currently under an investigation by the Department
of Justice for potential violation of the Foreign Corrupt
Practices Act. This is because the Batista brothers, the
leading shareholders, have admitted to criminal acts, numerous
criminal acts, consisting of the bribery of thousands of
Brazilian government officials to obtain illicit loans from
Brazil's national bank. The ill-gotten loans were then used by
JBS to illegally enter and consolidate the meat packing
industry in the United States.
You talk to cattle producers, you find out what they think
about JBS. You are not going to get a favorable answer.
November of last year, I wrote to Secretary Perdue urging
him to open up a suspension and debarment investigation into
JBS to determine whether the company meets the legal
requirement of present responsibility. Just very, very recently
received a reply from the Secretary stating that he refuses to
open such an investigation.
And, Mr. Chairman, I would like to submit both my letter
and his reply into the record.
So no action. So I make an assumption that the Secretary
condones the use of taxpayer dollars in order to subsidize a
corrupt foreign-owned corporation engaged in illegal activity.
So, Ms. Fong, I don't know what kinds of conversations that
you have had with the Secretary on this issue, the criminal
allegations, do you take them seriously by this Department. And
I have two other questions, so I would like a quick answer.
How seriously are you taking these allegations?
Ms. Fong. We are aware of these allegations as reported by
you and the media, and we are doing what we believe to be
appropriate at this time.
Ms. DeLauro. What are you doing?
Ms. Fong. I think it would be useful if our staff talked
with your staff.
Ms. DeLauro. Happy to do it. Please do. And we have been
talking to your staff over and over and over again.
Let me just say that the Secretary said USDA suspension and
debarment investigation into JBS would, quote, ``conflict with
investigations by DOJ and SEC.'' Is that the case?
Ms. Fong. I can't comment on their position.
Ms. DeLauro. I am not asking you that, but is it a
conflict?
Ms. Fong. I don't know what the basis for his response is.
Ms. DeLauro. Fine. Because you, by the Inspector General
Act of 1978, amended in 2008, you have independent authority
and responsibility to ensure that taxpayers' dollars do not
continue to flow to a company that is engaged in criminal
behavior. Are you going to conduct an investigation?
Ms. Fong. We are also required by the IG Act to
appropriately coordinate with the Department of Justice.
Ms. DeLauro. Are you, with your independent authority,
going to conduct an investigation?
Ms. Fong. I can't comment on that.
Ms. DeLauro. No comment. That means we don't know whether
or not your authority is being challenged in any way.
It is. You are independent. That is what makes the IG so
critically important to all of us up here.
I will make one final comment to you, because in your
testimony you talk about worker safety and pride yourselves on
dealing with worker safety. JBS, its subsidiaries, have engaged
in a litany of practices leading to violations of labor,
environmental, food safety laws.
Investigation by The Washington Post, 2015 to 2018, JBS had
the highest rate of serious worker injuries, those involving
amputation, hospitalization, among all meat companies in the
United States, and the second highest rate of serious injuries
among all companies in the United States. A subsidiary that is
getting over a hundred million dollars.
Investigate. Use your authority.
Thank you, Mr. Chairman.
Mr. Bishop. I thank the gentlelady.
I failed to make a comment to our witnesses as well as the
members. If you could, since our hearing is being watched by
the public across the country, if you could refrain from using
acronyms so that people who are not necessarily familiar with
those acronyms will know exactly which agencies you are
referring to.
At this time I would like to recognize Mr. Cuellar from
Texas.
Mr. Cuellar. Mr. Chairman, thank you so much.
Good morning to you all.
Looking at your management challenges on performance
measures, we have added language in the appropriations asking
the Department, both USDA and FDA, to comply with Title 31 of
the United States Code, which means including their development
of performance measures. That is, set their priority goals,
their outcomes, and making sure that they have the performance
outcome measures, output measures, efficiency measures,
customer service measures. And this is the law, Title 31.
I see your report saying that they need to do that. Can you
tell us where they are and why they are taking a little bit of
time to do what they are supposed to be doing under the law?
Mr. Harden. I don't know that I can specifically talk about
why they are not doing it in response to the language in the
appropriations bill. It is something that I would want to go
back and look at.
As we develop the management challenges each year, it is
one of those things where as we are doing work and looking at
how agencies measure their performance, we have run into
questions about how they are doing that. So it does have us
look at how they do those individually complying with the
requirements.
We would need to go back and talk to them or maybe even do
some additional work to see where they are in terms of getting
more on par with what the requirements are overall.
Mr. Cuellar. Well, if you look at the 50 States, I think
most of the 50 States have been doing this since the 1990s, and
the Federal Government is still behind, and I don't know why it
is so hard to measure.
If somebody spends a hundred dollars, don't we want to know
how those hundred dollars have an impact on it? I mean, we just
want to know what is the bang for the $100 that we are
spending.
What do we need to do to get you all to help us--and
appreciate all the work that you are all doing--to get them to
do not only the appropriation instructions, but basically Title
31 of the United States Code? I mean, they are supposed to be
doing all this.
Ms. Fong. And you are absolutely right. This is just good
basic performance management. And the Federal Government has
had these requirements for a number of years.
I can't bring up any particular examples right now, but in
many of our reviews when we look at how the Department is
delivering programs, one of the first things we look at is
their strategic plan and their performance measures to see are
they really accomplishing what they set out to accomplish as
they define it.
It is not easy to come up with some of these measures,
output versus outcome, and we know everybody is struggling with
that. And what that management challenge is designed to do, as
we have worked in the Department, we have seen different
examples where different agencies may need to have a better
focus on those issues.
I think we can provide you some additional information on
examples of where we found work, whether it is good work or bad
work, to give you a sense of that.
Mr. Cuellar. Again, the same thing about how do we measure
this. I mean, again, I go back to the States, whether it is
Florida, Texas, name the State, they have gone through this,
and they have gone through the how do you measure output, how
do you measure activity--and sometimes people just measure
activity--but how do you measure outcomes.
I mean, after so many years--and some of this got sort of
the 1990s under the Clinton administration, and then back in
2010 we passed legislation to modernize the performance
measures, but we still get the agencies to do what they are
supposed to be doing.
And it is not that hard. I mean, the States have done it.
The States are the living laboratories that we have out there.
I mean, I can probably pick any of the members here, those
States have done it for many years.
But the Federal Government still can't tell us, if they
spend a dollar, they cannot tell us how they spent that dollar,
how efficient or effective. Besides what Chairwoman DeLauro was
talking about on some particular issues, but if you have
measures it is a simple budgeting process.
But I would love to--I know my time is up--but I would love
to sit down with you all, if you want to send somebody to the
office with our committee, love to sit down and get some of the
thoughts and see how we can put a little teeth on Title 31.
Thank you.
Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Cuellar.
Ms. Fong, since 2018, the administration has used funding
and the authority of the Commodity Credit Corporation to make
available about $25 billion for payments to farmers through the
Market Facilitation Program. How does OIG plan to review
payments that are made under the MFP program? And do you plan
to review data or other information that was used in
calculating the eligible commodity payment rates to the
recipients?
Of course, that had a great deal to do with the trade wars
that were impacting our farmers tremendously, which has
resulted in a gigantic number of bankruptcies in farm country,
particularly in Wisconsin and Georgia, my home State.
So can I get you to comment on that, please, ma'am?
Ms. Fong. Let me just offer a few comments, and I know Gil
has a lot more detail.
We are working right now on looking at the Market
Facilitation Program and the Department's authorities there. We
have work going on. And then we are going to branch out into
the eligibility issues.
Let me turn it over.
Mr. Harden. Back in 2019 fiscal year, we recognized when
these programs came out that MFP was the biggest one that was
coming out, and it was something that we would probably want to
take a look at. So we planned work at that point in time to
start looking at the MFP program.
After we started that work, we heard questions and received
questions about the trade aid package in total, and the
authority USDA had for using the CCC funding was a central part
of that question.
So I had the team that was looking at MFP to stop and take
a look at the authority questions for all three of the programs
that are being done under trade aid.
Mr. Fortenberry. Mr. Chairman? Mr. Chairman?
Mr. Harden. We should be reporting out on that shortly,
hopefully later this year, and then we will be looking in
detail at the other programs.
Mr. Bishop. Mr. Fortenberry, I yield to you.
Mr. Fortenberry. I just would like to admonish you to watch
the acronym speak.
Mr. Harden. I am sorry.
Mr. Fortenberry. It is very difficult. We know what you are
talking about, but it is very difficult to follow when you are
using that too rapidly and not defining what they mean. So just
say the whole programmatic area.
Mr. Harden. Okay.
Mr. Fortenberry. Thank you.
Mr. Harden. So we do have planned work for the Market
Facilitation Program, the Ag Trade Promotion Program done by
the Foreign Ag Service, as well as the Food Purchase and
Distribution Program done by the Ag Marketing Service.
Mr. Bishop. Thank you.
According to the 2019 semi-annual reports, complaints
coming through the OIG Hotline on participant fraud increased
over 40 percent between 2018 and 2019, from about 11,400 to
16,100.
Do you have details on what programs are involved, what are
the reasons for the big increase in the number of complaints,
and how USDA is responding to the trend?
Ms. Fong. Yes. We have been watching and obviously managing
the hotline operation. The hotline for USDA is housed within
our office, it is the OIG Hotline. And over the last few years
we have noticed an incredible increase in the number of
incoming complaints or contacts.
And as we have been analyzing them--and you will notice in
our semi-annual reports--I would say about 95 percent of them
relate to questions about the Supplemental Nutrition Assistance
Program, or SNAP.
Many times they are contacts made by people who are
concerned about their benefits being affected in some way. They
will have questions. They want to know how to apply. They
really are not complaints that are directed to us for OIG
investigation per se. They are really looking for information.
So as we have noticed this trend over the last few years,
we are trying to figure out how to make sure that the people
who contact us with these kinds of program questions are
getting what they need. In the meantime, that we handle our
workload in an appropriately responsible way. It is a
management challenge for us.
I don't know if, Pete, would you like to add any comments?
Mr. Bishop. Does some of that also have to do with a lack
of information and outreach on the part of the Department in
terms of making clear what the eligibility for these programs
are? And if that were done appropriately by the Department,
would that lessen the need for these people to make these calls
that you are talking about, about eligibility?
Ms. Fong. Well, I think we don't know that. We attribute
the increase to some action in one of the appropriations bills
a number of years ago which directed FNS to suggest to the
States that on the EBT cards, the Electronic Benefit Transfer
cards--I am not sure if that is right--that the OIG Hotline
number be included if people have issues to bring to our
attention.
And so we think people are looking at their cards. If they
have a question or a problem or a concern, they are dialing us
up. And my guess is that this may be an area where we can work
together with the Food and Nutrition Service and with you all
to see how we can best address those issues and concerns.
Mr. Bishop. Thank you very much.
At this time I am delighted to recognize Mr. Harris.
Mr. Harris. Thank you very much. And thank you very much,
Mr. Chairman.
Just to follow up a little bit on the SNAP program, the
budget, around $60 billion I guess, 57, 60, something like
that, what is the estimate of the OIG of the amount of fraud in
the program that is exchanging benefits for currency, things
like this? Because I suspect that that goes on. What is the
estimate of the extent of that? I mean, in your testimony you
talk about one, but it is a drop in the bucket, I would
imagine.
Ms. Fong. Yeah. Just in general, we have not tried to put a
number on the amount of fraud in the program because we are not
sure of how we would go about estimating that in an appropriate
way that is based on evidence.
We do, as you know, report every year on our investigative
activity, which finds that retailers do trafficking and many
times we will get large judgments on that. So we have got the
fraud issue there where we can give a number based on
convictions and sentences.
We also know that there are improper payments in the
program which are not necessarily fraudulent. They could be
overpayments, underpayments, administrative error kinds of
payments.
And as we were just talking about earlier today, the
Department itself reported an improper payment rate for the
Supplemental Nutrition Assistance Program of about 6.8 percent
for 2019. So 6.8 percent of the appropriation, that would give
you an idea of the numbers of erroneous payments being made.
Mr. Harris. But I am particularly talking about exchanging
benefits. Do any of the States look, has any State looked at
it? Has anyone made an attempt to see when it is done?
Because, look, we all want to direct it where it is
necessary, but we all know that exchanging benefits occurs, and
it is not that hard to do.
Has anyone tried to figure out the extent of it, and then
how we can get around it? I mean, has anybody thought, for
instance, biometric proof or something, when you go to spend
your benefit that it is you, it is not somebody else, it is not
someone you sold it to, things like that?
Ms. Coffey. So FNS has looked at a number of options. I
think there have been suggestions about pictures placed on the
cards, things of that nature.
The one thing I would note is that if an individual is
really determined to traffic their benefits, whether the
picture is there, whether it is the biometric or not, they are
going to be able to do it. So I don't know that that would
necessarily be sort of the best answer.
In terms of looking at an overall fraud rate, as the
Inspector General mentioned, we, overall, have our criminal
investigations, but there is a portion of fraud that occurs
which do not rise to the level of criminal activity.
FNS has the ability to take administrative action to
disqualify retailers from the program if they determine that
there is fraud present there, and we would not necessarily have
the ability to track that particular number. That is not
something historically that we have looked at. We really focus
on the criminal matters and the criminal investigations within
SNAP.
Mr. Harris. But to exchange benefits, is that a criminal
offense, for the recipient of SNAP funds to exchange benefits?
Ms. Coffey. It is a criminal offense. However, it depends
on the dollar amounts. And certain locations and jurisdictions
we would not be able to bring a case for prosecution in those
instances if it doesn't reach a certain dollar amount or
threshold for the prosecutor's office.
So we always do try to see that, if there is a way to get
the bad actors out, we will share our information with FNS so
that they can move forward to take administrative action to
remove those folks from the program.
Mr. Harris. Okay. But bottom line, we have no estimate on
exchanging benefits, what the extent of that is? It is all
anecdotal, that it occurs?
Ms. Coffey. Not in totality, we don't.
Mr. Harris. That is what I thought. Okay.
Thank you very much, Mr. Chairman. Thank you.
Mr. Bishop. Thank you, Mr. Harris.
Ms. DeLauro.
Ms. DeLauro. The OIG's swine slaughter audit would be
available in April. I just want to remind you that the plants
may be committing to this new system by March 20. So I would
like to more than suggest we need to have that information
before this rule, this goes into action without the benefit of
the audit. So we would like to have that data before March 20.
Thank you.
Page 8 of your testimony, Inspector General, you speak in
detail about your office oversight of the nutrition assistance
that the subcommittee appropriated for Puerto Rico. That is
following the devastation of Hurricanes Irma and Maria. Along
with looking at USDA's Food and Nutrition Service's actions,
you also calculated overpayments, underpayments, and made
recommendations to the agency on how to improve.
However, I am shocked by the delay, because there will be a
new tranche of funding, and these payments are going to be made
in trade aid, and we should know something about this package.
You did not mention any oversight of the Department's $28
billion in your testimony, the trade aid package. That bailout
is more than 20 times more than the $1.27 billion in basic food
assistance that we appropriated to Puerto Rico, yet it has
received far less scrutiny. Why is that?
I also want to say this. I guess Mr. Paradis said that 43
percent of your time in 2019 was investigating the SNAP
program. Why isn't there a comparable percentage of looking
into a program which universally has been said is not directed,
is not going to the struggling farmers and ranchers out there?
And I said earlier, over $100 million is going to a foreign
subsidiary that is being dealt with in terms of the Foreign
Corrupt Practices Act and who has the most injuries of people
that they employ.
I think that we are a little out of whack in where we are
focusing our attention in the Inspector General's Office. Has
your office taken any active role in overseeing the three
components of the trade aid package? Have you estimated
overpayments, improper payments, or underpayments? Do we have
any idea as to what the level of waste, fraud, and abuse is?
And when is this audit going to be finished?
Ms. Fong. We are definitely looking at the trade promotion
packages, the Market Facilitation Program. We are very aware of
the large dollars there. It is a priority for our office. We
have ongoing work, as Gil has testified, the first piece of our
work should be coming out in the next several months, and then
we are designing the scope for our second and third pieces of
work. So we have in the pipeline several audit reviews that
will be coming out.
Ms. DeLauro. But your delay in dealing with this means that
this program is going to continue to move in the direction that
it has been moving. And we have no information about waste,
fraud, abuse, under, overpayments. We don't have any
investigation of over $100 million that is going to this
corporation. And yet we spent a heck of a lot of time dealing
with $1.27 billion to food assistance aid to Puerto Rico and
you spent 43 percent of your time in 2019 looking at the food
stamp program.
Do you think there is need to rebalance your efforts? And
when is this audit coming forward? Not in the next several
months before a new package of dollars goes out and they can
employ the same waste, fraud, and abuse which is ongoing right
now in this program and you are not doing anything about it.
How quickly can we get an audit?
Ms. Fong. Well, as we have testified, the first piece of
our audit in this area, the first audit results, will be coming
out in the next few months.
Ms. DeLauro. When did the program go into effect?
Mr. Harden. The program went into effect, I think, in 2018,
and as part of our 2019 plan after it had come out, we made
revisions to our plan so we made sure that we were looking at
the Market Facilitation Program.
After we started looking at the Market Facilitation Program
there were multiple questions that we received on the authority
of the Department to do this program, which is why it is
important for us to report out on the authorities that is being
done.
Ms. DeLauro. Let me just say this. You have had 2018, all
of 2019, we are looking at 2020 and the next several months
when you all can't investigate waste, fraud in a $28 billion
program, but, boy, did you go after 43 percent of your time on
the SNAP program and much of your time on $1.27 billion in
basic food aid to Puerto Rico. I rest my case.
Thank you, Mr. Chairman.
Mr. Bishop. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman.
I do think it is important that we follow through on
looking at the Market Facilitation Program to ensure that it
was implemented with integrity.
It is important to note that it seems to be purposeful that
the amount of time that you are spending auditing SNAP program
aligns with the percent of it as a budget, as a whole.
So let me go back to the Environmental Quality Incentive
Program that you talked about earlier. There is a question
about $2.1 billion in payments. This is an important program
for farmers and ranchers, a very popular program. You talked
about how the Natural Resources Conservation Service didn't
basically have the right component prices or an outdated set of
baselines that were not reliable, credible, or cost-effective.
I didn't hear whether or not you said have they fixed this
process.
Mr. Harden. Yes. As we discussed the problems with the
Natural Resources Conservation Service they agreed with our
recommendations and have taken actions--or at least they have
told us of the actions they plan to take--to correct the issues
that we identified. So they are moving to correct these issues.
Mr. Fortenberry. Okay. So that is some good news, right?
Mr. Harden. Yes.
Mr. Fortenberry. Okay. To the larger question, when we are
talking about fraud or improper payments, how well do we
recapture funds?
Mr. Harden. In terms of the monetary recommendations that
we have put forth before that have actually said collect the
money back, I would have to go back and get some statistics
from the Office of the Chief Financial Officer, which would be
the entity that tracks that on final action of the
implementation of the recommendations, but I can definitely get
back to you on that.
Mr. Fortenberry. Give me some broad estimate.
Mr. Harden. Sir, I would be making a complete guess and I
would prefer not to.
Mr. Fortenberry. But you have some idea, more than I do,
because I have asked the question, as to how effective this is.
Obviously you are trying to get programmatic changes to stop
behaviors that are inconsistent with programmatic integrity,
but a part of that is recouping money lost.
Mr. Harden. And to my knowledge, when agencies agree with
us that they are going to recapture, recoup the money, they
have a plan in place for doing that. I have not seen many
requests come from agencies or from the chief financial
officer's office, which would be the case if it did, to change
that. So my presumption is they are going about recouping the
money.
Some of the recommendations date back a number of years, as
the chairman pointed out in his opening statement, going back
to the mid-1990s. We have had recent discussions with the
Foreign Service Agency about where are we on how we are
collecting some of those moneys that were questioned for.
Mr. Fortenberry. Look, I am sure you are overwhelmed with
work; however, I think this is a pretty important component.
Yes, it is about changing patterns of behavior to ensure
program integrity, but it is also about restitution. And I
think moving forward, including that as a part of your findings
would be an appropriate shift, if you will, of how you report
back to us, because ultimately I think that is concrete,
measurable action that your good recommendations have been
implemented.
Ms. Fong. Let me just offer a comment. You know, we talk
about our dollar results being $2.2 billion. In the EQIP audit,
for example, our recommendations may not always be, ``Agency,
you need to go back and retrieve the money because it was an
improper payment.'' It may be that, ``Agency, because you
didn't use the right pricing, you paid more or less than you
should have.''
Mr. Fortenberry. I understand that. So you probably need--
Ms. Fong. So there may not be a recoupment of cost.
Mr. Fortenberry. But you probably then need to have two
separate numbers, one in which programmatic adjustments that
you made resulted in taxpayer savings of this amount,
restitution, because of some fraud or action of the Department,
is this amount. I think that would be beneficial to us and to
you. I mean, what is your total budget?
Ms. Fong. Oh, right now it is you 98 million.
Mr. Fortenberry. And you want 100--I forgot the number you
said
Ms. Fong. 100.3.
Mr. Fortenberry. That proves that your work is of good
value, if you can quantify the outcomes in the way I just said.
Ms. Fong. Okay.
Mr. Fortenberry. Which is without question, please
understand, it is without question that your work is of good
value. But when you have a quantifiable like that, I think it
is a simple way to say, ``Our work results in this.'' Okay?
Which agencies succeed the best? Which agencies need help
and funding?
Ms. Fong. As I have been looking at the work we have done
over the past year, many of our reports will point out that the
agency in question did a good job on certain aspects of their
program, but other aspects they really need to tighten up
controls. And I think a nuanced answer to your question is that
there are some success stories across USDA. I wouldn't lump any
one or two agencies in a category of----
Mr. Fortenberry. Well, they all have different missions. It
is a hard question, I get that. But there have got to be
outstanding examples of programmatic integrity, implementation
process, outcome verifications that you can point to and say
these are excellent.
Ms. Fong. Well, I will say from a very high level, I think
financial management at the Department is getting better. This
past year we saw the National Resources Conservation Service
obtain a clean opinion on its financial statements for the
first time ever. It took 5 to 7 years of concentrated effort to
get there. So that is definitely a success story for the
National Resources Conservation Service.
On the other hand, that agency was the one where we had
this audit we have been talking about, the Environmental
Quality Incentive Program, EQIP, as it is known, where we found
issues to the tune of about $2 billion.
So there is great success and also great opportunity, and
that is a concrete example. I think Gil may have some others.
Mr. Fortenberry. I think my time is up. I am sorry.
But thank you, Mr. Chairman, for your indulgence.
Mr. Bishop. Mr. Cuellar.
Mr. Cuellar. Yes, sir. Just a quick question.
The GAO December 2018 had a report on food insecurity:
Better information could help eligible college students access
Federal food assistance benefits if basically they could be--
they were either not aware of or just didn't know about their
potential eligibility for SNAP.
Any thoughts on that? And we can follow up later on this.
Just, basically, how do we inform students at colleges, ``You
are eligible''?
Mr. Harden. We haven't done any specific work ourselves, so
we are happy to engage in conversations if there are specific
questions. I mean, we have a very good working relationship, I
want to highlight, with GAO to where we are not looking at the
same things at the same time so that we spread the oversight
effort, if you will.
I have seen that report, but I am not familiar with the
details. But if there are specific questions, we can talk about
them.
Mr. Cuellar. Okay. Yeah, we will follow up. I think we are
going to follow up on performance measures and on that. So
appreciate it if we can follow up on this.
Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Cuellar.
Ms. Fong, the Healthy, Hunger-Free Kids Act of 2010
mandated the nationwide implementation of electronic benefits
transfer for WIC by October 1, 2020. The WIC program is
administered by 90 State agencies, including territories or
travel organizations.
You released a report at the end of December 2019 that
identified 25 State agencies that may not be able to meet this
deadline. You mentioned that this may occur because these State
agencies have and are experiencing various challenges and
setbacks.
Can you discuss the findings and recommendations of your
report and specifically the reasons why some States face more
challenges than others and tell us how the territories or the
tribal organizations are progressing and whether they face
different challenges than the States do?
Mr. Harden. In response to the last question first, I don't
know that I have detail on whether tribal organizations were
different than States.
Mr. Bishop. And the territories.
Mr. Harden. And the territories. But I will go back and
look at the audit report and talk to the team if there were
specifics.
In terms of what we reported in the report in terms of the
State agency problems and setbacks or challenges and setbacks,
some States had difficulties and delays in obtaining
contractors to help them put in place their electronic benefit
transfer systems or any other management information systems
associated with the mandated timeframe.
We also saw that State procurement departments did not
always see this as a high priority for the States in terms of
the procurements that needed to be done because this was a
State responsibility to put this in place. And also for some of
the smaller State agencies they had limited staff and resources
to get things done.
Now, as we brought this issue forward during field work we
did talk to FNS, and FNS put different things in place to work
with the States to give them better plans to help them along
the way.
And in response to our recommendation to develop and
implement a plan to assist the States, FNS was very timely, in
my thinking, in the actions that they were taking to work with
the States and put a technical assistance plan in place,
develop correspondence between regional administrators and
State commissioners, develop different technical questions and
answers to sell best practices for other States to use, and to
have ongoing dialogue, teleconferences, with the different
people at the Federal, State, and local level on what needed to
happen.
They planned to put all that in place by the end of
January.
Mr. Bishop. Thank you.
Last August you issued an inspection report on USDA's
proposal to reorganize and relocate the Economic Research
Service and the National Institute of Food and Agriculture. The
report included five recommendations, four of which you
accepted the management decisions. The recommendation on which
you and USDA disagreed has to do with obtaining congressional
approval prior to using funds for the proposal.
Can you give us the latest status update of this inspection
report and what is the resolution of that open recommendation?
Mr. Harden. We have reached management decision on that
recommendation. It was reached on October 15 of last year.
In response to their response in the report, we pointed out
where we thought there was inconsistency in how the Department
was applying the provision at that time and then prior. So
where they were telling us that something was unconstitutional
now, they were using in different discussions earlier where
they did use--that they did need the authority.
So our basic response to them, being as the response was
coming from their general counsel, was that, please, clarify
for us and clarify for the departmental officials at USDA if
this has been a change in policy so that everybody is on the
same page in terms of how we are going to implement this.
What they provided to us was that they didn't feel like
they needed to do additional communication because of training
that they had already put in place that reflected their view on
these requirements to affected people that deal with budget and
procurement and general counsel's office and the chief
financial officer's office as well.
And they also pointed out that the people that attended
these trainings or had this training would be the people that
would be advising agency leadership on what the
responsibilities were.
So they gave us an answer to our question, which is how we
reached agreement.
Mr. Bishop. We will perhaps follow up on that.
Mr. Fortenberry.
Mr. Fortenberry. Thank you again, Mr. Chairman. Before we
concluded, I appreciate your willingness to call this important
hearing.
And again, thank you all for your work.
I do think it is important we drill down on problems. But
we were talking about good examples of people who have either
improved or who are maximizing their effectiveness with program
integrity.
You wanted to make a few comments, Mr. Harden, in that
regard? Ms. Fong said you did.
Mr. Harden. It is true that most of what we look at
discloses weaknesses and different problems. We do try to point
out positive things, as the Inspector General pointed out.
In terms of specific examples, and maybe I can talk with
your staff about the detail of the report, but we did see, I
would say, having agencies focus on program administration and
internal control is something that needs to be sitting at the
table as I have had discussions with agency leadership in terms
of program delivery as well. And program delivery is important,
but also think about how we are controlling the operations and
are we getting what we are supposed to be getting.
One example of that is a review that we finished last year
in crop insurance related to the Annual Forage Insurance Plan,
as well as follow up on the Pasture, Rangeland, and Forage
Insurance Plan that we had looked at in years prior.
These are both 508(h) products from the Federal Crop
Insurance Act, which we are currently looking at the process
associated with that because of things we saw with these two
insurance plans.
One of the things that I feel the agencies could have done
better with regard to this is that we had pointed out things
with the Pasture, Rangeland, and Forage Plan a couple years ago
that translated into improvements that could have been made to
the Annual Forage Plan had the agency taken those ideas and
applied them across the board.
Some of those specifics dealt with the county-based values
of the land involved in what is being insured. Here in the
Annual Forage Plan, like we found in the Pasture, Rangeland,
and Forage product, they were treating irrigated and
nonirrigated land the same, and all of us know that irrigated
land will be highly more productive, most likely, than
nonirrigated land.
The other factor that we pointed out with Pasture, Range,
and Forage that could apply to Annual Forage was thinking about
the soil's productivity in terms of what actual crop they were
going to be growing on the land.
So that is an example of something where if the agency
could have taken information that we had already said and
implemented corrective actions on another program.
Mr. Fortenberry. Okay. I was kind of looking for a good
example. But that is okay. You gave what you needed to say.
Thank you, Mr. Chairman.
Mr. Bishop. Let me just explore one other area. Obviously
this is report on USDA management challenges every year, and
one of the seven challenges in 2019 is the USDA, quote, ``needs
to improve outreach efforts,'' which has been included in the
reports since 2013.
As you may know, ensuring that everyone who is eligible
gets the same opportunity to receive government assistance is a
major priority of mine, and the 2019 report indicates your
office plans to look into outreach efforts for the Farmers
Market and Local Food Promotion Program and for the Cooperative
Interstate Shipment Program.
Where do you see outreach is needed the most? Where does
USDA need to do more to help new beginning and historically
underserved producers get access to the government services
that they so richly deserve?
Ms. Fong. That challenge on improving USDA outreach to
underserved populations, over the years we have done different
kinds of projects to get to different aspects of that
challenge. As you point out, we have looked at reaching out to
underserved producers, new farmers, new ranchers.
Currently, I believe we have an audit going on the Section
2508 program--2501. You may remember a few years ago we did a
series of reviews in that program which found that the
Department had challenges in getting grants out in an equitable
way. So we are going back now to revisit that program to see if
there have been any improvements.
We also, as you know, we have talked this morning about two
reviews we are doing vis--vis the Office of the Assistant
Secretary for Civil Rights and how that office manages its
workload on complaints from program participants as well as
employees. So we have got that going on.
We have also recently issued a couple of reports dealing
with tribal organizations and the Department's provision of
food assistance, which I think was a very helpful report, as
well as the substantially underutilized tribal assistance
program. I think in terms of acronyms all the time.
So we are definitely doing our best to hit all the
different aspects of this challenge, and we welcome any
thoughts anybody may have on that.
Mr. Bishop. And the territories, in particular Puerto Rico
and the Virgin Islands?
Ms. Fong. We have, as we have talked about this morning,
looked at the nutrition assistance disaster delivery programs
in Puerto Rico.
We also had initiated some work vis--vis the Virgin Islands
program, and after we did some initial review and scoping
decided that we really needed to put the emphasis on the Puerto
Rico delivery because that was where we saw more challenge at
the time. But we are definitely monitoring what is going on
with the Virgin Islands.
Mr. Bishop. Do you feel that we need to look at the
structure of the delivery of the disaster and the structure of
nutrition programs, period, for the territories? Because right
now they are directed totally different from the States. The
territories and, of course, the Virgin Islands and Pacific
Islands, they are treated altogether differently, and when we
have these major disasters it appears as if they end up being
delayed unnecessarily in getting the results that they need to
help their people.
Do you think, can you help us with reports that would
indicate what we could do to sort of equalize the response time
and the delivery of services under the disaster programs for
the territories, much the way that we have historically done
them for the States?
Mr. Harden. Mr. Chairman, with respect to the Puerto Rico
Nutrition Assistance Program, that is the one territory that we
have looked at from that aspect, so that was where I will focus
what I am going to say.
In the first round that we looked at that, we did have
concerns with delays, as we reported, and the one
recommendation that we are still working with FNS on is, is
there a better way to approach this? What, if anything, are our
other options?
While negotiating that with, as the Inspector General
talked to, I think, Mr. Moolenaar, there was language that came
in the appropriations bill in terms of maybe how to go about
looking at that. We also got a second request to talk about the
timeliness of the 600 million and how it got there, and we are
very close to issuing our report on that.
But we are seeing improvements on that over time. And so we
are trying to engage in discussions ourselves, with respect to
the outstanding recommendation, is there a way, from all the
things that we are seeing now, is there any other options that
we ought to lay on the table to move it forward.
Mr. Bishop. Well, thank you, Ms. Fong, Ms. Coffey, Mr.
Harden, Mr. Paradis, for being here today. Along with what we
have discussed today, we will be forwarding additional
questions for the record, and we will appreciate your diligence
in responding to us in a timely manner.
Again, I thank you for your testimony. We look forward to
working with you as you continue the fiscal year 2021
appropriations process.
With that, the subcommittee is adjourned.
Wednesday, February 12, 2020.
HEARING ON FCA'S FISCAL YEAR 2021 BUDGET REPORT
WITNESS
GLEN R. SMITH, CHAIRMAN AND CEO FARM CREDIT ADMINISTRATION
Mr. Bishop. The Subcommittee will come to order.
Good morning, and welcome to today's hearing.
I am happy to welcome Glen Smith, a board chairman and CEO
of the Farm Credit Administration and the FCA board member,
Jeff Hall as we discuss the agency's roles, responsibilities,
and the budget request for FY-2021. So, I thank you both for
being here today.
Last year, we held a hearing with FCA in the system that
examined the state of the rural economy and the challenges and
the opportunities that our farmers, our ranchers, our producers
in our rural communities' face.
Since then, there have been some positive developments,
such as the signing of the phase one of the China Trade Deal,
in which China has tentatively promised to buy more
agricultural products from the U.S., and the passage of the
U.S.-Mexico-Canada Agreement. This was good news for our
producers, but the reality for many is more complicated, and
2020 still holds many uncertainties for them.
While the USDA's economic research service forecasted a
rise in net farm income in 2019, due in most part to direct
government payments, there are some alarming trends in the ag
sector that must be examined and that we have to address. Last
year, according to USDA, farm debt reached record levels at
$416 billion. Farm bankruptcies are at their highest levels
since 2011. Wisconsin and my home state of Georgia are at the
top of that list.
These trends appear to raise significant warning signs for
the year ahead, and I would like to hear from both of you on
your outlook for 2020.
Looking at the budget, the request for FY-2021 is $81
million, of which 87 percent is for personnel costs. A third of
the examination staff and half of the non-examination staff
will be eligible for retirement within the next five years.
This represents hundreds of years of institutional knowledge
leaving the agency, and it mirrors the wave of retirements and
vacancies that we are seeing elsewhere in USDA in the Farm
Service Agency.
I am glad to see that your budget request identifies the
human capital needs and the initiatives and the investments as
priorities, and that the Farm Credit Administration is focusing
on knowledge management.
I am also glad that you are focusing on improving services
to young, beginning, and small farmers. A recent ERS report
looking at beginning farms and farmers noted that beginning
farm households have less wealth and have more debt relative to
their assets than established farms. Ensuring that new farmers
have the resources, the support, and access to credit in order
to sustain their business early on should be a priority for all
of us, given that our farming population is both declining and
aging.
So, I look forward to hearing more about the Farm Credit
Administration's outreach to this group of very important
farmers.
Again, I want to thank you Mr. Smith and Mr. Hall for being
here today, and I look forward to today's discussion.
And now, I would like to turn to our distinguished ranking
member, Mr. Fortenberry, and ask if he has any opening remarks.
And if so, I yield to him at this time.
Mr. Fortenberry. Yes, Mr. Chairman. I have a few opening
remarks. Thank you for yielding time, and thank you for calling
this important hearing. Good morning, gentleman, and welcome.
Chairman Smith, Chairman Hall, I am pleased to see that you
are here before us again, and here is why. Around this very
time of year last year, our farming community, ranching
community, and the rural communities of both Eastern and
Western Nebraska, and Western Iowa as well experienced 500-year
flood event. It washed away the topsoil that will take
generations to replenish. It left a massive trail of silt and
debris across corn and soybean field. And then, of course,
thousands of head of livestock were lost.
But in the true Nebraska spirit, neighbor helping neighbor,
our communities came together to recover and rebuild and become
stronger than ever. So, I am proud of that.
Our regional banks played an important role in this
recovery, extending critical financial recourses to aid in this
effort, and so did you. The Farm Credit Service of America and
other financial institutions in the Farm Credit system
supported our communities and allowed many farmers and
communities to get back on their feet.
I want to also publicly thank Chairman Bishop and, frankly,
the entire Appropriations committee for their sympathy and
understanding in working with us to really get our minds around
the reality of what happened to us, and to be supportive and an
extra resource. So, thank you, Mr. Chairman.
And your appearance before us today is timely, because our
farmers and ranchers and others in the ag community are facing
a number of challenges from low-commodity prices and tight
margins, to the externalities born of hard but absolutely
necessary trade negotiations to have a reset, a reckoning so
that America is treated fairly. We also face natural disasters,
as we all know, and something that we don't talk enough about
in farm communities, this ever-escalating cost of health care.
So, your organization is critical in ensuring that the
local farmer in my district, or the young man or woman
interested in agriculture has the financial resources to start.
To purchase seed, tractors, columbines, fertilizer, and land,
and has ways to both store and transport their products.
But today, I want to touch on three areas of interest. I am
eager to get an update from you on the state of the farm and
rural economy, as well as the health of the Farm Credit system.
We need to know if there are any warning signs on the horizon,
and to know if Congress needs to act in preparation for any
threat coming to the farm economy.
In recent weeks, I have seen headlines about an increase in
the number of foreign bankruptcies Chairman Bishop noted. One
prominent headline shouted that farm bankruptcies increased 20
percent in 2019. Unpack this for us. Is this isolated to the
dairy industry, or reflective of a broader trend? I recognize
that we have had a number of good years, and an increase in
bankruptcy from a very low level. It is still a problem, but it
has to be put in context.
Secondly, how does the Farm Credit system work in
conjunction with USDA programs funded in our Appropriations? I
think this is important. I would venture to guess that the
public in general knows very little about USDA's loan
portfolio.
So, in this fiscal year alone, the USDA has loan
authorizations exceeding $46 billion. So, there seems to be an
embedded risk in the Farm Credit system absent these USDA
loans. Is there something that needs to be done in this fiscal
year of the appropriation process that reduces financial risk
even further in light of the potential threats on the horizon
that we hope you identify? I would like to look closely at the
financial relationship between the USDA and the Farm Credit
system as we begin to develop this year's appropriations bill.
And lastly, I am interested to learn in potential
initiatives that you have undertaken, such as rural broadband
and other infrastructure as well as, again, as the Chairman
mentioned, lending to young and beginning and small farmers,
especially since your agency sets in place policies that would
influence lending decision affecting the long-term viability of
rural communities. It is important that we unpack this as well.
So many people outside of our own agricultural community
don't have the familiar with the Farm Credit system and how it
plays a critical role in ensuring that America has per capita
the lowest grocery prices in the world. That is called food
security, and something we take for granted.
Food security is the basis of stability in any society, and
we have seen the disruptions that can occur in faraway places
when these factors have to be borne by people who do not have
the capacity to react to them. It unravels social dynamics very
quickly, causes migration, land degradation, and on and on.
So, again, food security is absolutely critical. So,
without our farmers and ranchers, and our dependable access to
the abundant and affordable credit, we may not have the
situation that we have in America. This gift of an abundant,
well-produced food source, again, that keeps our prices lower
than anywhere else in the world.
So, you provide a backstop to the Farm Credit system, your
backstop is more important than ever.
And so, I thank you for being here and look forward to your
presentation.
Thank you, Mr. Chairman. I yield back.
Mr. Bishop. Thank you very much, Mr. Fortenberry.
Mr. Smith, without objection, your entire written testimony
will be included in the record, and I recognize you now for a
brief opening statement. And then, we will proceed with
questions.
Mr. Smith. Very good. Thank you, Mr. Chairman, members of
the subcommittee. My name is Glen R. Smith, board chairman and
CEO of the Farm Credit Administration. Sitting to my left is my
fellow board member, Jeffrey S. Hall, who is Chairman of the
Farm Credit System Insurance Corporation.
Our past Chairman, the late Dallas Tonsinger, last
testified before this committee last April of 2019, and in
behalf of his memory and our dedicated staff of the agency, we
are pleased to provide this testimony here today.
Before I give my remarks, I would like to thank this
committee for your help with two issues in last year's bill.
First, you raised our funding cap to address the unanticipated
FIRS assessment after our Fiscal Year 2020 budget submission.
The second issue involved a statutory limitation that could
have reduced export sales of our domestic farm products. You
and your staff worked with the authorizing committee and your
Senate counterparts to resolve the issue. And for that, we are
grateful.
Our fiscal year 2021 proposed budget request of $81.01
million is an increase of 4.35 percent over the fiscal year
2020 revised budget. 86 percent of our budget is dedicated to
compensation and benefits of our employees. The budget request
anticipates increases in the agency's contributions for
retirements and includes $610,000 in reimbursable funding. To
maintain our talent pool of dedicated employees, we
aggressively recruit every year on a rotation of 16 schools for
entry-level positions, including HBCUs, but more importantly,
retention is just as important as recruitment, and we strive to
maintain a positive working environment in our agency.
2019, FCA was recognized as the second-best place to work
amongst small agencies in the federal government, and I am very
proud to report that one of the subcategories of this high
rating was our support of diversity, in which we ranked number
one.
Since I became chairman last year, we have been working on
a number of important rulemakings. Some of them have focused on
strengthening the system, while at least half of them have
focused on streamlining regulations to make them clearer for
system institutions to follow.
Another priority of mine, as you mentioned, Mr. Chairman,
is the mission to serve young, beginning, and small farmers and
ranchers. Our initial efforts had been to improve the data
reporting accuracy to get a good baseline, and meet with
stakeholders, and explore best practices. Our goal was to
further enhance the systems YBS mission and ensure that
America's next generation of farmers and ranchers have access
to the tools they need to succeed.
U.S. farm sector continues to face challenging economic
times. In 2019, farmers and ranchers encountered declining
financial conditions amid large commodity supplies, weak
prices, and of course, weather extremes. High operating costs
for labor farm inputs and other expenses are still putting
stress on farm cash flows. Farm subsidy payments held, most
notably crop insurance and MFP payments, and were, in many
cases, the difference between net operating loss or profit.
Despite the challenges in the overall farm economy, I am
pleased to report the system banks, as well as Farmer Mac are
fundamentally safe and sound with strong levels of capital. As
of September 2019, the system reported positive earnings that
continue to support that capital growth. Overall portfolio
credit quality does continue to decline, and the system
institution, but the system institutions have strong risk-
bearing ability. Meanwhile, we are watching those trends very
closely.
Compared to a year ago, I do see some positive factors that
should improve the egg outlook for 2020. A year ago, we had
almost no trade agreements in place. This year, we have USMCA
bilaterals with Japan and South Korea, and of course, phase one
with China. It may take patience, but at least the groundwork
has been laid for trade normalization and improved farm prices,
and the fed's policy of lowering interest rates certainly
improves margins in our happily, highly capitalized industry.
So, I am cautiously optimistic for improvement in agriculture
as we enter a new decade.
As Congress intended over 100 years ago, the Farm Credit
system with the Farm Credit Administration as its regulator is
well positioned to meet the credit needs of the American farmer
and rancher.
Thank you, and I am pleased to take your questions.
Mr. Bishop. Thank you, Mr. Smith. Before we begin the
questions, as you pointed out, and as you indicated in your
testimony, your appearance today and your testimony was in
memory of Mr. Tonsinger. I would like to, with--I should ask
the Committee to observe a moment of silence as we reflect on
the service of Mr. Tonsinger.
[Moment of silence]
Thank you.
Well, Mr. Smith and Mr. Hall, as I mentioned in my opening
statement, and as you mentioned in your testimony, 2019 was a
particularly difficult year for U.S. farmers and ranchers as
they faced trade uncertainties, large-commodity suppliers and
extreme weather.
And yet despite these challenges, our farm income
increased, largely due to the Government payments. This was
certainly good news for the farmers for their bottom line in
2019, but what are their prospects this year and what are the
major warning signs we should be paying attention to?
And does one of the trends, the rise in farm bankruptcies
increasing farm debt? Are low-commodity prices or the high-
level of loans classified as less than acceptable?
Does that worry you more than the other?
Mr. Smith. Well it certainly does, Mr. Chairman. We watch
those statistics very closely; in fact, on a quarterly basis we
keep track of our institutions and their credit quality. And as
you said, bankruptcies is a concern, but it starts with adverse
loan quality which this last year, as of the 3rd quarter 2019,
was up to 7.4 percent from 6.6 percent.
The definition of adverse loan quality is usually
deteriorating current ratios, deteriorating margins,
deteriorating liquidity sign of, of possibly some problems
coming down the road.
The next category is non-performing loans. And at the end
of the 3rd quarter, they were less than 1 percent at .92
percent, but up from .83 percent from a year previous. That
non-performing is just what it is, those payments have been
late.
The next category is our delinquent category. And that is
at .3 percent with a significant less than 1 percent. Up
slightly, our 10-year range has been .2 to .66 percent. So
we're about midway in that range.
Numbers themselves aren't alarming yet, but we're watching
the trend closely because this does indicate a 4- to 5-year
trend of decreasing loan quality. So that is certainly
something we, we have been watching.
We have seen a recent article by the American Farm Bureau
on bankruptcy, estimated that bankruptcies were--nationwide
were up 20 percent.
Nationwide those numbers probably aren't as alarming as the
local areas impacted by certain industries. Certain states like
Wisconsin, and unfortunately, Mr. Chairman, your state leads
the list on that. I believe the statistics was 57 bankruptcies
last--in 2019, up an alarming 57 percent from the year before.
And a lot of that, some of it was dairy. I think some of
the profitability in the peanut industry and the forest
industry, which I know is important in your state, was deeply
impacted. Not only by the tariff scenario and exports, but also
by the hurricanes and--devastating.
Mr. Bishop. Excuse me.
Mr. Smith. And I think we talked about that last, and there
is no government payment, there is simply disaster assistance
available for that.
So in answer to your question, we are watching those trends
very closely. From a national perspective it is--the numbers
aren't alarming, but certain key areas like Wisconsin, Georgia,
dairy; forestry bears, bears watching.
The solution, and as Congressman Fortenberry pointed out,
in those disaster areas where we have seen some significant
problems, we have talked and suggested directly to the
institutions that they persevere as long as they can with those
borrowers.
You mentioned a 500-year event. You don't recuperate from a
5-year event in just one year. A lot of times it means
amortizing that loan out on a longer basis.
So wherever possible, we like to feel that we are sticking
there with the American farmers and ranchers in good times and
poor.
Mr. Bishop. My time is about up, but can you give us a
sense of current stress within the System's farm loan
portfolio?
Mr. Smith. Yes.
Mr. Bishop. Are there certain commodities or certain
regions that are more high-risk than others?
Mr. Smith. Certainly dairy, as you identified, is a problem
area, and that is nationwide, and that is something we are
watching very closely. The forestry area was impacted
profoundly by the trade issues and there was no Government
programs available for that.
Those are 2 industries, along with--in our--in my Midwest
area, my home area, grain crops continue to see duress.
Mr. Bishop. Thank you very much.
Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman.
In that regard, Mr. Smith, can you talk about the decline
in land prices? Again, is this isolated to the areas that you
spoke of because of regional considerations or is there a
general trend downward?
And then one of the challenges in your business, frankly,
is if you have a declining level of capital, yet you have a
performing loan.
Mr. Smith. Yes.
Mr. Fortenberry. How do you manage that in terms of your
books?
Mr. Smith. As far as land values, it correlates directly
with enterprise risk through certain areas of the country. And
most of the impact has been in our area of the corn belt and
areas impacted, like dairy.
Some areas of the Northeast, although as far as declines in
land values, very surprising that land values have held in
there that resilient.
It does irritate me a little bit to hear that land values
have stabilized because I always add for now.'' If negative
circumstances were to continue, certainly land values are
vulnerable. And we saw that back in the 1980s.
Beginning in 1979, 1980, we had trade issues back then. We
had some severe problems in Ag. We saw about a 15 to 20 percent
loss in land values in the Midwest. I am most familiar with in
the Midwest. And then we saw stabilization from about 1983
through 1984. And then from there we saw--we went off the cliff
as far as land values.
We are not there yet. If you compare us to the 1980s,
definitely we are not there yet. But as far as land values,
there still is a certain element of fragility to it.
Mr. Fortenberry. But you have the dynamics within--the
financial management tools within your constructs.
Mr. Smith. Yes.
Mr. Fortenberry. On performing loans that might have actual
lower capital values based upon the ups and downs of land----
Mr. Smith. Yes.
Mr. Fortenberry [continuing]. To actually work through that
for the long-term.
Mr. Smith. Yes, sir.
Mr. Fortenberry. There have been instances where if you
have got a performing loan, but a drop in the value of the
capital asset, then you have got problems on the books. But it
is an artificial problem.
So do you have, again, the flexibility in the portfolio to
weather that?
Mr. Smith. We believe we have the strength in our
portfolio. Number one, our strong capital position, which is
something we did not have in the 1980s. And the other thing
that we need to emphasize with the Farm Credit System: it is
very diversified.
Mr. Fortenberry. That is actually a good point. In the
1980s you did not have that flexibility and it actually
accelerated the problem.
Mr. Smith. Right. Particularly in the corn belt area, yes.
Mr. Fortenberry. Let me turn to beginning farmers and
ranchers. And this is important. The reason is that a number of
us, including Ms. Pingree, have worked on this issue and it--
production agriculture is the backbone of, again, in many ways,
America's economy.
One of the last things we produce on mass, we have got the
values of stewardship by our farmers and ranchers; as well as,
significant resource capacity in our country that positions us
extraordinarily well to, again, help the world in this regard.
However, there is only so much land.
Mr. Smith. Yes.
Mr. Fortenberry. Land is concentrated in fewer hands. But
the--interesting, agriculture is growing. The University of
Nebraska's Ag program is growing. And agriculture in terms of a
siloed field, agronomy or animal science, is not the case
anymore; it is environmental science, it is biology, it is
international development. It is the whole ecosystem of well-
being; again, starting with food security. This is very
attractive to young people.
So while young people who may not be coming from a farm
background or tradition may not ever have the capacity to own
1,000 or 2 acres; none the less, expanding the agricultural
family through specialty crop production, part-time Ag
interest. Again, recreating the types of production that might
be smaller-scale and more traditional forms of agriculture
actually are exciting new opportunities.
Does your perspective, or again, rules that govern you,
allow you the entrepreneurial capacity to begin to move in that
space more aggressively? Because this is expanding the
agricultural family and I think that is very exciting.
Mr. Smith. We believe it is, and it was one of the first
things when I came to the Agency I researched and looked into
our mission on young beginning in small farmers. And while we
were involved in it and every association is required to have a
program, I felt we could do more.
And we--I began programs to do more. And it is not a fast
process, but the recognition that the small and beginning
farmers--and of course, I can say that from a first-hand basis
because I was one--is very, very important to that.
Mr. Bishop. Thank you.
Ms. Pingree.
Ms. Pingree. Thank you very much, Mr. Chair, and thank you
for holding this hearing.
And thank you and your team for taking over, and I
appreciated having a chance to chat with you a little bit about
this.
I have one big question, but since my colleague just asked
about this, I will just follow up on that. And I know I
actually asked you the same question and really appreciated you
giving it this sort of bipartisan slant. But also, you know,
the difference between Nebraska and Maine is pretty significant
in terms of how many farms, how big their farms are.
But it is a reflection of how this is happening around the
country and that there is a lot more interest in young people
in all of the very things that were just talked about: value-
added products, dealing directly with restaurants. There is
just a whole new market opening up, and certainly, that has
been a concern in my state of the inability of Farm Credit, at
times, to sort of see the value of getting into those loans.
So I just want to commend you for doing that and say that I
will certainly, you know, be talking to our farmers back at
home to make sure they understand there could be more
opportunities or there are more in the future.
And the one thing, and we have all really agreed with the
State of Georgia as they have gone through just this horrific
process of trying to recover from a storm most people didn't
even notice, frankly.
But the reverse of that in Maine, we have only had 3
Chapter 12 Bankruptcies in 2019, and I think a lot of that is
because we are promoting much more of small- to medium-sized
farmers who are, you know, actually really doing pretty well;
even though on the books, they don't always show up as
commodity crops or the kinds of things that are conventionally
seen.
So I think maybe I won't even force you to answer that,
because I just want to get onto another topic. But I wanted to
commend you and say, let's keep working together on that, and I
am really grateful that there is interest across the Committee
on it.
Mr. Smith. Thank you.
Ms. Pingree. I want to get in a question [cough]--excuse
me--about hemp. I think it can sometimes be the bane of our
existence, here in Congress, dealing with hemp and CBD, because
there has been a lot of confusion around it.
But there has been great interest since the farm bill. In
Maine, it is growing at a rapid pace; it is grown in every 1 of
our 16 counties, 2,000 acres in 2019. But there are these
growing pains.
We had one farm last year, the Sheepscot Farm in Maine,
they were dropped by their insurance company. They were also
dropped by their bank because they were growing hemp and there
was this confusion. We are hoping that some of these
regulations get straightened out and, you know, we can work
more on that.
But what have you been hearing from the banks in their
willingness to lend at hemp growers? What steps are you taking
since USDA published its interim final role, which was last
October, to help hemp growers gain access to credit? There is,
there is a real no-person's land out there and it scary for the
farmers.
Mr. Smith. Certainly. And any new enterprise, we greet it
with excitement because it is always nice to see a new
alternative to our cash crops. If I may, I will defer that
question to my fellow board member. Jeff Hall is from Kentucky,
which is one of the pilot states.
Ms. Pingree. Oh.
Mr. Smith. And I will let Jeff field that.
Mr. Hall. You have hit the exact problem. There is so much
of the infrastructure that has to be developed in order for
producers to benefit from this potential crop. We have actually
released guidance to the system; it is legal now as a result of
the farm bill. But there is so many more questions. FDA has to
get involved, transportation, all of those issues.
Ms. Pingree. Mm-hmm.
Mr. Hall. So it has gone from an issue of being legal to an
issue of creditworthiness. And for farmers, the System is able
to loan to producers in hemp. But by and large, those loans are
basically security with other crops.
So rather than just directly lending to hemp, most times,
it is an operating loan for different enterprises.
Ms. Pingree. Mm-hmm.
Mr. Hall. So we will have to wait and see. But we are very
cautious, but we are optimistic that things will develop in the
infrastructure. We have--there is a multitude of possibilities
on the use of hemp, but there is so many more questions yet
that have to be answered.
Ms. Pingree. Well I appreciate that your guidance is
specific in about it being legal. I do understand that
creditworthiness becomes an issue because there is so much flux
in the market right now and because there isn't sufficient
infrastructure. But more, just the confusion about if you make
your investment, will you be able to sell your crop, or at the
end of the year, won't it be viable.
So some of things that we have heard in the past are banks
or credit unions just getting nervous about legality and the
uncertainty of that.
Mr. Hall. Mm-hmm.
Ms. Pingree. And so it is important for you to be issuing
those kinds of documents to say to banks and credit unions, you
know, there is--``You are okay. You are not going to jail. The
regulators aren't coming in to get you.''
But I think there has been a lot of confusion, and
unfortunately, since we haven't been able to move the--a Safe-
Banking Act in the Senate, which does have provisions to make
it really clear about hemp, that is just one more obstacle.
But I feel for you in Kentucky. I know that it is a much
more active state, but I appreciate your level of awareness and
hopefully we can get this straightened out in the near future.
Mr. Hall. Absolutely.
Ms. Pingree. Thank you, Mr. Chair.
Mr. Bishop. Thank you, Ms. Pingree.
Mr. Moolenaar.
Mr. Moolenaar. Thank you, Mr. Chairman, and thank you for
having this hearing today.
And I want to thank you both for being here and your
testimony.
I wanted to talk with you a little bit about the Farm
Credit System and areas that I am interested in, relative to
rural infrastructure.
Mr. Smith. Mm-hmm.
Mr. Moolenaar. It is something in my district, you know, I
hear a lot about the needs of infrastructure--aging
infrastructure. There is also the need for rural broadband,
which I would kind of include in that area.
I am wondering what limitations there are for the Farm
Credit System to be involved partnering with rural
infrastructure. What areas we might be able to expand
opportunities, and any insights you have in that area.
Mr. Smith. Okay, thank you. And that is an area that the
system, I am proud to say, is, is actively involved in.
Right now our Title 3 lending, one of our major banks has
Title 3 lending authority. And historically, that has been in
rural electrification, rural water, wastewater treatment
systems and--but about 7 billion right now is currently--is
committed to communication projects, which broadband would fall
under that area.
So certainly we have the authority there. And I believe my
last hearing, Congresswoman Spanberger mentioned--I thought it
was a great quote. She said she thought rural broadband would
be the rural electrification of this century. And I definitely
agree from that, coming directly from the farm in a rural area
that connectivity is so important.
They talk about the farm technology; it is not only just
farm technology, but it is our schools, it is our hospitals, it
is our Ag business, it is our small manufacturing companies
that need to connect with the world. If we don't have that
connectivity that puts us on a level playing field, quite
frankly, we will lose it.
I can look back at my wife sitting behind me, in the green,
of almost 40 years. When we were beginning farmers, small and
beginning farmers back in the 1980s, we literally ate and paid
our light bill from her paycheck of working at the hospital.
And that probably continued about 10 years before we finally
got our footing in our Ag businesses and in our farming
operations.
And so it is critically important to maintain that rural
infrastructure, and I am proud to say that Farm Credit System
has an active part in that.
Another avenue is what is called our mission-related
investments where we can go into local communities on a case-
by-case basis and invest in facilities that may not be directly
related to Ag, but certainly critical to the rural economy; and
that is those hospitals and those senior care facilities and
things that we desperately need.
Rural America desperately needs capital. And that is one
thing that we see our role of Farm Credit is linking that
capital in those global markets to the sale of our securities,
directly to that farm gate. So I am a very--pretty strong
proponent of that.
Mr. Moolenaar. Is there anything more we can do to
communicate that in our districts, in our communities so that
people on the ground would kind of understand those
opportunities? Or do you feel like that information is well-
disseminated?
Mr. Smith. Well, we have found that most of the
institutions, it tends to be more localized. They maybe have
the expertise and experience in different areas, so we are able
to grant them that approval.
So if we could educate, I think there is a huge potential
for other areas and other institutions to do that.
So, so yes, sir, I do believe there is a little bit of void
as far as information on that.
Mr. Moolenaar. Well any recommendations you or your team
have in terms of how we can facilitate that communication.
Because I know it is a huge priority in my district and in
rural Michigan. So we would welcome your insights on that.
Mr. Smith. Yes. Well thank you, and we are bumping pretty
much up against our authority on that. And if, in your wisdom,
you feel that we need to expand on that authority, we would--
obviously would help us in those areas.
Mr. Moolenaar. Thank you very much.
And thank you, Mr. Chairman.
Mr. Bishop. Mr. Aderholt.
Mr. Aderholt. Thank you, Mr. Chairman.
You referenced in your comments, I believe, that the market
facilitation program.
Mr. Smith. Yes, sir.
Mr. Aderholt. And how it has been able to steady the shift
for many farmers over the last year.
Mr. Smith. Yes.
Mr. Aderholt. Especially the farmers that has really had a
difficult time. Looking ahead, can you talk about the improved
trade certainty that you--how you think will hopefully bring
the incomes back up to the sustainable levels for--in the--over
the next year and years to come?
Mr. Smith. Yes.
Mr. Aderholt. Yeah, just your thoughts on that.
Mr. Smith. Well as I say, the groundwork has been laid.
Hope is better than no hope, right? But the markets have taken
the stance is ``Show me.'' And they need to see ships going
overseas with our products. We need to see actual export
numbers before they react it.
For instance, soybean futures are roughly about 60 cents
less than they were early January. So we haven't seen any, any
profound movement yet. But it will take time. It will take
patience. Trade agreements obviously don't happen overnight;
and recapturing that trade.
Well there seems to be a lot of discussion right now over
2020 MFP. And the crops, we are months from even putting it in
the ground, let alone, raising a crop, let alone storing that
crop and marketing that crop that goes into 2021.
So we have had the last payment now authorized for the 2019
crop. And I guess the attitude needs to be, ``Let's see.''
``Let's see if this will work.''
Mr. Aderholt. Let me--my colleague, Mr. Moolenaar,
mentioned the rural aspect. And I also want to focus on that a
little bit. Oh, and the corporation between the Farm Credit
System and the community bankers and how they can effectively
spread risk and enable new projects that previously were, quite
honestly, were probably unfeasible to do.
Can you outline some of the work that FCA completed in the
past year to encourage rural investments? For important
infrastructure; I know we talked about broadband was mentioned,
but also rural hospitals, that aspect as well.
Mr. Smith. Okay, certainly. As far as the rural hospitals
in our mission-related investments, one of the criteria as far
as buying those bonds and participating, is to make sure that
local institutions are offered the opportunity to partner with
that.
And that is very important. We are not trying to take the
business. What we found is that criteria, a new hospital in
rural America, a 20, $25 million price tag is often beyond the
scope of local banks; and yet, it isn't enough to attract the
big players in the financial industry.
So we feel the Farm Credit System has a very valuable
tranche there they can fill with that----
Mr. Aderholt. A niche there, for that particular----
Mr. Smith. Yeah, we feel there is a niche, right. And--but
it is important, at the same time, that we offer participation.
And as I say, it is a criteria for the investment and it has
to--the institution has to demonstrate that they have contacted
those local institutions and offered participation.
Mr. Aderholt. You might not know anything offhand, but if
you can think of anything that we can do to expand that, in our
kinds of--to these kind of investments in rural America, like
broadband, rural hospitals and all that would be certainly
important for us to know. And I think that's all I have right
now.
Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Aderholt.
Mr. Harris.
Mr. Harris. Thank you very much, Mr. Chairman. Let me just
follow up a little bit. I want to thank the gentlelady from
Maine for mentioning the possible problems with hemp as a crop.
And one of the issues I know is that if the THC level is
too high, an entire crop could have to be destroyed. And my
understanding is that is not covered under crop insurance plans
and things. So that would be a total loss for the farmer if
that happened to occur.
Mr. Smith. I will answer the question initially because I
know the crop insurance covers crop loss. But what I read
doesn't differentiate whether that loss is necessitated by
being over .3 percent THC or from natural disaster or weather.
And I assume it is maybe from natural and doesn't include the
necessity to destroy it.
If I might, this is an area that my fellow board members
worked extensively with. May I defer the question to him,
Congressman?
Mr. Harris. Sure. Oh, absolutely.
Mr. Hall. No, I think you're exactly right. If it is above
a certain level of THC, the crop has to be destroyed by DEA.
And as a result, the farmer would have no income from the sale
of that crop, and there's really no crop insurance coverage for
that.
Mr. Harris. So do the farm credit agencies--because you had
suggested that in fact the loans are not made solely for the
hemp crop. It's usually a broader base of protection for the
farmer in terms of loss. But are there protections in place for
the credit agencies that limit the amount of exposure that a
farmer can have to a total crop loss from that portion of their
portfolio that is in hemp? Or could a member agency just say,
``Well, no. If this farmer just wants to grow hemp, we're fine
with that too,'' because that would seem an unacceptable risk
to me.
Mr. Hall. Well, it's a risk that the individual
associations would make or banks, commercial banks, would have
to determine themselves. We don't have any particular guidance
related to that.
Mr. Harris. But as overseers of the system, why wouldn't
you have guidance on that?
Mr. Smith. In our guidelines we clearly point out those
risks. We highlight those risks of losing a whole crop.
Mr. Harris. Okay, thank you very much. And my colleague
here mentioned the importance of trade and the--you know, the
interaction of the globalism of the agriculture basically and
how trade interacts with it.
In my district I know that, well, you know, poultry is big
in my district. Could you discuss what--because a lot of time
is spent on soybean and grains, but the importance of
international trade for livestock and dairy. And my
understanding is the USMCA actually made significant advances
in terms of our ability to have dairy farmers to participate in
trade. Could you elaborate on the importance again of livestock
and dairy?
Mr. Smith. I would be happy to and protein products in
particular including poultry probably have some of the best
potential of income gain the next year. If you look at the
bilateral with Japan, you've seen our beef markets have stepped
up into a nice area due to those increased exports to Japan in
just the last year. So there is clear proof that we get back to
some trade normalization, we're going to see some benefits.
China, the goal is 77.1 billion import of ag products over
the next two years versus 20 billion a year prior to the
tariffs will hurt--help all sectors ranging from timber
products to poultry. But given the disaster that they've had in
that country with the African swine fever and that chronic
shortage of protein that they derive primarily from pork, and
there's some huge potential. And if you look at the export
numbers, they have been improving all over the world on poultry
in particular.
Mr. Harris. I'm aware of that. And just finally, again,
there was a lot of talk about--and some of the discussion in
your testimony about trade uncertainties and all. And it is
clear there were trade uncertainties with regards to soy,
important product in my district.
But my understanding, and since the financial results are
so good for the last year with regards to the farm credit
agencies, my understanding from my farmers it that the
president has kept true to his promise to try to make whole
those farmers who are affected by the trade uncertainties as we
were going through the negotiations with China. Is that your
overview of what happened, in fact, that most farmers, in fact,
were able to succeed despite the trade uncertainties because
the backstop that the USDA provided?
Mr. Smith. It was certainly an important element of that,
yes. But with any ag policy broad stroke there is always some
areas that are going to fall short. And unfortunately, you
know, I mentioned timber exports and forest products was not
covered by any MFP. And there's a prolifera of other products
that weren't covered. Broad stroke, yes, it was a tremendous
help to shore up those cash flows, to shore up those margins,
include improved liquidity. But that didn't include everybody.
Mr. Harris. Thank you very much. Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Harris. In recent years we've
seen the rise of a number of farmers turning toward alternative
lenders to secure more credit. This highlights the economic
reality for many farmers and underscores the desperation that
they feel in order to stay in business.
Although loans from alternative lenders may be easier to
secure than the more traditional loans, they are riskier. They
often come with higher interest rates and not as heavily
regulated.
As the more traditional sources of credit decide to take on
less risk during these uncertain times, what is the farm credit
system going to help our farmers and keep them profitable? And
what advice would you give to a farmer that takes on debt from
an alternative lender?
Mr. Smith. An alternative lender, and you said it, Mr.
Chairman, is a sign of desperate times. They're running out of
options, and they're looking at last options to stay in
business. You can call it nontraditional, alternative lenders.
We've heard them referred to as payday lenders because of the
interest rates that has been charged on them, which generally
tend to be quite a bit larger than prevailing rates.
So I think the best thing that the system can do and the
system institutions can do, particular in times of duress, is
to encourage that those institutions work with those troubled
borrowers as much as they can in seeking alternatives. There's,
I know when I traveled up in the Northeast, particularly
Vermont, and visited some dairy operations, a lot of those
operations with the prompting of their local loan officer had
diversified in other enterprises other than dairy.
Diversification sometimes means one of the spouses taking an
off-farm job. But the reality is the dairy wasn't providing
enough income to support that family.
So you can't underestimate that relationship between that
loan officer and that borrower on looking at alternatives,
maybe restructuring for term to get them through those tough
times so they don't have to rely on interest rates that might
be reminiscent of the 1980s. I'm not aware of any specific
interest rates that have been quoted, but I hear they're high
because those are desperate measures.
Mr. Bishop. Well, I'm given to understand that with the
trade mitigation payments that the administration has made over
the last year, that a large amount of that money has gone to
alternative lenders for repayment of their loans, which has put
some stress on the--some added stress on the farmers.
Let me go back to the young beginning of small farmers. In
the 2018 Farm Credit Administration notes the need to improve
service to young beginning of small producers. And to that
extent, the Farm Credit Administration issued an advance notice
of public rule making to collect information from the public
regarding revisions to the YBS regulations.
Can you provide any updates on what you've learned and when
we can expect a final rule?
Mr. Smith. We just come out of the comment period on that
rule and in the process of sorting through those, the purpose
of that is to get public input, input from the institutions on
the rule. But I would expect we'll probably be rounding up a
final rule about mid to late spring on that.
And that rule was directed at getting the information
correct. We found that maybe we needed to update our
information collection techniques. Jeff and I initiated a new
office within FCA: Office of Data Analytics and Economics. And
we're really excited at the potential that office holds, and
it's helping us to sort through and make sure we get good
updated information on young and beginning and small farmers.
How do we evaluate this program if we don't have a good
baseline? And we found that there was maybe some deficiencies,
and we're working hard to improve that. That's the first step.
Mr. Bishop. The annual report notes that today there are
high capital demands of agriculture and new entrants require
affordable and dependable credit. Do the new farmers know the
resources that are available? And what do you need from
Congress to reach more farmers?
Mr. Smith. It certainly depends on the size of the
operation, and we've emphasized a lot on small operations. I
don't think it's realistic for a beginning farmer with no other
resources to go out and borrow and buy $10,000 an acre land or
have a million dollar line of machinery. So I think that's why
the YBS program is so important that we address the needs of
those small and maybe part-time farmers first.
It entails a higher degree of loan officer participation.
It may not be efficiency lending, but as the regulator we hope
to exert influence to encourage the lenders to look at those
type of loans.
Mr. Bishop. Thank you. Mr. Fortenberry.
Mr. Fortenberry. Mr. Chairman, you anticipated some of my
questions as well. So let's continue on that because again, we
have a well-established system of farm credit in the United
States, and we can go through the traditional questioning
around vulnerabilities in portfolio and all that. But with the
emerging opportunity of again, broadening the agricultural
family around new innovative but smaller ways of enhancing
economies and connecting the rural to the urban.
Your terms are a bit vague, and that's not necessarily
pejorative. But can you identify in terms of the farm credit
system the amount of portfolio that's going to these
considerations of underwriting young and beginning farmers? Or
what is your goal in that regard without pegging, you know,
without demanding that you put a set-aside, if you will, of a
certain amount? I don't want to do that necessarily. You're
talking in the right terms of conditioning the credit culture,
the financial system toward these emerging--because what tends
to happen in government is we lock in around a set of needs and
variables and then it gets institutionalized, and we do the
same thing over and over again.
What we don't want to do is not allow for the flexibility
with--not in any way making a portfolio any riskier, but not
allowing the development of the flexibility to enter into this
new space, which is exciting. It's entrepreneurial. It's the
next way of agricultural development. It's good for the
economy. And again, it's a field of growing interest that's
broader than what we've traditionally done, but that's okay.
So how are you specifically--give some specific examples of
what you're doing now. Let's move from the abstract to the
reality. And then how do you envision the tactics of moving
toward that goal? I get it. You're being intentionally vague.
This is not a judgment on that because this isn't fully
developed yet. But what we're doing is we're pushing you----
Mr. Smith. Right.
Mr. Fortenberry [continuing]. To develop this quicker
because again, I think it is consistent with your mission.
Mr. Smith. Right.
Mr. Fortenberry. And it is consistent with what we perceive
as policymakers as this demand of our--of the people we
represent. And it's good public policy.
Mr. Smith. Yes. No, I appreciate you narrowing down on that
on specific examples. And as I said, the first step was to get
the information correct, which is what we did with the NPRM.
I've been doing a significant amount of traveling before I
became chairman. The first year and a half, I think I've been
in twenty different states. Seen a multitude of diversity in
operations, which I think is important for a board member,
number one, to understand this whole, huge breadth of----
Mr. Fortenberry. Let me interrupt for just a second. And
it's not just new emerging opportunities for people who now
want to move in the ag field. It's also existing options within
production agriculture for diversification.
Mr. Smith. Yes, yes, certainly. Certainly. Particularly as
you move in areas of stress where you need to look at
alternatives. So as far as me personally, I've been gathering
information----
Mr. Fortenberry. Let's put a timeline and goal on that so
we're not having the same conversation next year, which
obviously isn't your intention. But let's lay down some markers
right now----
Mr. Smith. Yes, sir.
Mr. Fortenberry [continuing]. As to what we're going to do
when without holding you necessarily in terms of a law to this.
But let's lay down some objectives.
Mr. Smith. You're talking my language, Congressman, and
let's set some goals on it. One goal we have immediately in
front of us, and that through my travels, the states, and all
that, I've noticed a high correlation of successful YBS
programs is a high level of cooperation between FSA and the
system institutions and the loan officers. High correlation
there. I'd say above ninety percent. And that's from travels,
listening, and learning first, okay?
So as far as a specific then, we are organizing right now.
I met with Undersecretary Bill Northy here a week ago, and we
are working towards bringing a workshop here in D.C., and
bringing FSA, bringing the farm credit banking institutions,
and other federal agencies together on how we can share this
information.
Mr. Fortenberry. I have a better idea for you. Why don't
you do that at the University of Nebraska? Why don't you give
us a try first? We have the Center for Agricultural
Entrepreneurship. I'm going to tell you a quick story about the
Brueger brothers. These guys could be a reality TV show.
Mr. Smith. Okay.
Mr. Fortenberry. They live in a small town right outside of
my congressional district. Traditional production ag grain
farm.
Mr. Smith. Yes.
Mr. Fortenberry. They want to do something innovative and
interesting to themselves but continue the long family
tradition of the farm. So they're starting to grow hops. They
bought the bar in the downtown area. They've revitalized that.
They're going to have their own brand. Amazing, amazing,
exciting things. And it repeats itself over and over and over
again across Nebraska with people who are in their, oh, maybe
twenties to forties, generally. Although there are some people
beyond that as well doing exciting things.
Mr. Smith. Yes.
Mr. Fortenberry. So we have the Center for Agricultural
Entrepreneurship. Come do it with us. Give us a try. We'll be
your focus group, so to speak.
Mr. Smith. Sure, we are open to invitations. And there's
even a few of those success stories over across the river in
Iowa.
Mr. Fortenberry. Well, I know you're from Iowa, and you had
to slip that in. But we'll leave it at that. My time is
expired.
Mr. Smith. But I would appreciate the invitation.
Mr. Fortenberry. Thank you.
Mr. Bishop. Thank you, Mr. Fortenberry. Mr. Smith, you had
testimony notes that a key factor driving the fiscal year 2021
budget request is the need to hire and to train qualified
individuals to replace the many employees who have begun to
retire. Attrition and subsequently backfilling are challenges
most agencies face, but it is particularly acute at FCA.
The examiner commissioning program takes three to five
years to complete I understand. Can you discuss the
commissioning process, and given that approximately a third of
the examination staff are eligible to retire within the next
five years, what impacts will this have on the examinations of
the FCS banks and associations? And do you anticipate a
decrease in the frequency of examinations?
Mr. Smith. So the commission, our examination commission
staff, is what we call our boots on the ground. That's sixty
percent of our workforce and that's the heart of Farm Credit
Administration. So it is extremely important.
I mentioned that we recruit actively at rotation of sixteen
universities, and usually our class, we look at around fifteen
to sixteen, depending on the retirements and the attrition. Our
average attrition is about nine percent, for our examiners,
eight percent over all agency. So every year, we have to have
that active recruiting class. But even though forty-one percent
of our workforce is eligible, of the exam workforce is eligible
for retirement in the next five years our HR director pointing
out that most of our staff stay an average of eight years after
retirement. And that's a reflection----
Mr. Bishop. After eligibility?
Mr. Smith. After eligibility, yes, sir, after eligibility.
So that is a good example of a positive working environment.
But those newly commissioned examiners, it is so important to
offer them chances to move up and leadership within the
organization. And of course, we have four field offices in
addition to McLean that offer hierarchies of leadership within
the organization.
So that's important that we create our leaders within. We
had a turnover on our senior management staff last summer, and
we had replacements, due to retirements, of four staff members.
Correction: one of those was a new data office analytic
director. But all of those were brought in within the agency.
We created our own. So it is very important to create those
different generational levels of succession and maintain that
positive work environment.
Mr. Bishop. Tell me about your diversity and about your
recruitment efforts. And you mentioned earlier in your
testimony about recruitment at HBCUs.
Mr. Smith. Yes.
Mr. Bishop. I think we included in our appropriations bill
some scholarships to deal with that and to interest people in
careers in agriculture. Can you talk about that and how you are
utilizing that program or how you intend to utilize it?
Mr. Smith. Yeah. And that is something that we look to with
a diversified workforce and recognition of that diversity. We
hired a fulltime EEO director four years ago. And not only is
she--part of her responsibilities is for equal employment
opportunities but also support for diversity, active programs
that recognize our minority employees which I think is
important again in retention. Once we get our employees within
the fold, we need to keep them. And going back and not to brag
but placing number one in diversity and our ranking of number
two in federal agencies we think is a pretty good, a testament,
to our success in those areas.
Mr. Bishop. Thank you very much, Mr. Smith and Mr. Hall. We
appreciate very much your being here today, and I appreciate
your testimony and your assessment of the year ahead and look
forward to working with you to meet the challenges. They're
significant to be sure, but we remain hopeful. With that, the
Subcommittee is adjourned.
Thursday, February 27, 2020.
FOOD AND DRUG ADMINISTRATION--STATUS OF OPERATIONS
WITNESS
SUZANNE MURRIN, DEPUTY INSPECTOR FOR EVALUATION AND INSPECTIONS, OFFICE
OF INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. Bishop. The Subcommittee will come to order.
Good morning. Welcome, everyone, to the subcommittee's
hearing on health and human services' Office of Inspector
General's efforts related to the food and drug administration.
This is the first time since 2009 that the subcommittee has had
a hearing with the HHS IG. So, thank you to our witness, Ms.
Murrin, for appearing before us.
Eliminating fraud, waste, and abuse and correcting
mismanagement is one of the most important roles of our
committee, and I am deeply interested in the work that you do.
Your office is at the forefront of these efforts as they relate
to FDA. The subcommittee shares your interest in ensuring that
the programs of FDA are operating at the highest levels of
efficiency, responding to your recommendations, and protecting
the public health, safety, and welfare of the American people.
This morning, I am interested in understanding what your
office views as the biggest obstacles that are facing FDA today
and down the road. As the largest inspector general office in
the federal government, the majority of your work addresses
other parts of the Department of Health and Human Services.
Since 2015, this subcommittee has provided your office with
additional appropriations to specifically address FDA
oversight.
I would like to use today's hearings to better understand
how these funds have helped you to achieve your mission and
what else we can do. So, today, I would like to hear more about
the work you have done to date, your plans to conduct adequate
oversight of FDA programs, and the challenges that you face in
ensuring that agreed upon recommendations are implemented, and
complaints are appropriately addressed.
I look forward to discussing that with you, as well as
other important issues, and I want to say again that we
appreciate you and all of the work that inspector general staff
does, and for all that you do.
So, let me at this time ask distinguished Ranking Member
Mr. Fortenberry if he has any opening remarks, and if so, I
would certainly like to recognize him at this time.
Mr. Fortenberry. I do, Mr. Chairman. Thank you so much for
the recognition and let me thank you as well publicly for your
leadership and identifying this important gap, if you will, in
our own oversight challenges and responsibilities. So, this is
an important hearing, and I really appreciate your willingness
to call it.
Ms. Murrin, welcome to the Agricultural Appropriations
Subcommittee. Your agency has a daunting task. We all realize
that in overseeing the spending and performance of agencies so
large that they can be bigger than some countries around the
globe. So, and it is one trillion worth of spending that you
have responsibility over, and as the chairman identified, part
of that responsibility is over the Food and Drug
Administration.
So, let me start with one of our most basic needs: drug
safety. The people back home expect safe and effective drugs,
vaccines, and medical devices, and as you note in your written
statement, roughly 40 percent of finished drugs and 80 percent
of active drug ingredients are made in more than 150 countries.
Mr. Chairman, I am going to just read the sentence one more
time. Roughly 40 percent of finished drugs and 80 percent of
active drug ingredients are made in more than 150 countries.
Do you think we can trace all that? Most Americans would be
shocked to know that most drugs or drug ingredients are not
produced here, and as your audits have noted, FDA conducts
limited overseas inspections. So, a GAO report, Government
Accountability Office report from a few months ago highlighted
the deficiencies in this foreign drug inspection process and
said, for instance, ``The officials estimated that the agency
generally gives 12 weeks of notice to establishments that
investigators are coming when investigators are travelling from
the United States.''
So, Chinese companies have 12 weeks' notice to clean up
their act, and we give domestic manufacturers no time at all?
This make sense? We need to know why the drug industry has
moved drug production out of the United States. That is a
fundamental question. And second, why we can't make
pharmaceuticals in our own country? This is all the more urgent
given the outbreak of the Coronavirus. This has accentuated the
need, the urgent need for this nation to produce critical drugs
and medical supplies right here.
I also want to talk about another basic FDA function. That
is food safety. While the committee in general can have
opposing views on certain things, one thing we agree on is the
government's role in ensuring that our food is safe. So, we
rely upon your agency and the GAO to evaluate and critique and
make recommendations on how to fix what the FDA might not be
doing correctly to reduce or eliminate food-related illness.
So, I see that your agency has only conducted two food-
related audits since 2015. You can come back to that when we
question. That is the information I see, and I am hopeful in
your agency will do more in the future to answer fundamental
questions about our food supply.
So, your office spends roughly four percent of its budget
on FDA related work through the 1.5 million appropriated by
this subcommittee, yet the FDA is responsible for oversight of
20 percent of all consumer spending in the United States. Do
you see the gap?
So, here is something we can celebrate. I am in full
agreement with you that you need more resources for this
important work.
So, with that, Mr. Chairman, I will stop and yield back my
time, and again, I appreciate your willingness to engage in
this form of oversight.
Mr. Bishop. Thank you, Mr. Fortenberry.
Before Ms. Murrin begins, a reminder to members that as is
customary with the subcommittee, our members will be recognized
by seniority for those that were here when I gaveled the
hearing to order, and then, the order of arrival following
that. I will alternate majority and minority members, and we
will adhere to the five-minute rule.
Ms. Murrin, without objection, your entire written
testimony will be included in the record. I recognize you now
for your statement. And then, we will proceed with questions.
You may summarize, or you may give the entire statement. It is
completely up to you. The floor is yours, Ms. Murrin.
Ms. Murrin. Thank you, Chairman Bishop, Ranking Member
Fortenberry, and distinguished members of the subcommittee.
Thank you for inviting me here today to discuss OIG's oversight
of the Food and Drug Administration. We are grateful for the
support this subcommittee has provided to OIG, which has
allowed us to enhance our oversight of FDA's vital programs.
Our oversight has prioritized safety. We have recommended
numerous actions FDA can take to make the food, drugs, and
devices that Americans rely on safer. While our oversight has
resulted in important progress in each of these areas, much
more remains to be done. We are grateful to the subcommittee
for this opportunity to bring public attention to these safety
issues.
In food safety, our most pressing recommendations focus on
food facility inspections and food recalls. It is imperative
that FDA take appropriate action against all facilities with
significant inspection violations and reinspect these
facilities in a timely manner to ensure the violations have
been corrected. OIG found that FDA took no regulatory action in
response to 22 percent of the significant inspection violations
we reviewed, and that when FDA did take action, it most
commonly relied on the facilities to make voluntary
corrections.
Finally, in almost half of all cases, FDA did not conduct a
timely follow-up inspection to confirm the problem was
corrected. Significant inspection violations can include
finding rodents, Salmonella, or Wisteria in food production
areas. These are serious threats to the food supply that need
to be addressed.
With respect to food recalls, FDA took swift action to
address many of the concerns we raised to ensure prompt and
effective recalls. However, FDA has yet to establish
performance metrics, like capturing the time between
identification of a potential hazard and the initiation of a
recall.
Without this, FDA cannot effectively identify and respond
to firms that fail to initiate a timely voluntary recall, nor
initiate a mandatory recall. This is especially important,
given that in our selected sample of 30 food recalls, the
median time between when FDA became aware of a potential
problem and when a firm issued a voluntary recall was 29 days.
The average was 57 days.
OIG has also identified vulnerabilities with FDA's
oversight of the manufacture and distribution of prescription
drugs. In response to our work, FDA resolved all 289
outstanding preapproval inspections of generic drug
manufacturers, most of which were for foreign manufacturers.
Our ongoing work on the safety of foreign drug manufacturing
assess FDA's foreign drug manufacturer inspection process.
Tracing drugs from the manufacturer through the supply
chain to the consumer is also an area of concern for the OIG
because each time a drug changes hands, it creates
opportunities for counterfeiting, tampering, or diversion. OIG
found that drug tracing information can be used to trace the
legal ownership, but not the physical movement of drugs through
the supply chain. However, both types of information are needed
to support FDA in identifying and resolving drug safety and
security issues.
In terms of devices, the OIG has ongoing concerns about
FDA's oversight of network devices, such as hospital room
infusion pumps and pacemakers. Without appropriate security
controls, these devices can be susceptible to cybersecurity
threats, such as ransomware and unauthorized remote access.
In response to OIG's work, FDA made immediate changes to
its pre- and post-market processes. However, OIG recommends
further improvements, including that FDA establish procedures
for securely sharing information about cybersecurity threats
with key stakeholders. OIG will continue to provide FDA
oversight in the areas of food, drug, and medical device
safety. In addition, ongoing reviews expand our oversight to
include curtailing youth tobacco use, combatting the opioid
crisis, and fostering drug competition.
Thank you again for the opportunity to be here today and
share OIG's findings and recommendations on FDA. I welcome any
questions you may have.
Mr. Bishop. Thank you very much, Ms. Murrin. As you eluded
and as Mr. Fortenberry eluded, according to the latest data
from GAO and FDA, more than 60 percent of drug manufacturers
for the U.S. market are located overseas, and 80 percent of
active pharmaceutical ingredients are manufactured overseas in
more than 150 countries. The degree to which we were allowing
drug products that are made overseas raises significant
challenges for FDA, and it is, of course, the subject of your
audit, as you referenced.
Can you walk us through some of the problems that you have
found in the foreign drug inspections process, and do you
believe that the FDA currently has the capacity to effectively
ensure the safety of imported drugs and active pharmaceutical
ingredients, and what else do you think needs to be done in the
event that you believe that we need to do more, which seems
obvious with the limited resources that you have?
Ms. Murrin. Thank you very much for your question.
The OIG is currently conducting a study of foreign facility
inspections for drug manufacturers. When I have the results of
that, I will have updated information, and we will reach out to
you and provide you with a detailed briefing.
Mr. Bishop. Okay. Since 2015, the subcommittee has provided
you with $1.5 million with the direction that it be transferred
to specifically focus on oversight issues related to FDA, and
it is clear that HHS OIG covers a large portfolio with limited
resources, and the hope was that the FDA oversight issues could
receive additional consideration with those funds.
How have these funds allowed your office to focus more on
FDA, and what activities have you been able to support that
otherwise might not have been done, and can you quantify what
additional resources would allow you to do? For example, what
would an increase of $500,000 permit you to do, that you can't
do now?
Ms. Murrin. Thank you.
Mr. Bishop. Or a million dollars?
Ms. Murrin. Or a million or two. What I do--where I should
start by saying the OIG is extremely grateful for the funding
that this committee has provided and for the focus that the
subcommittee has provided.
You've both given us the funds these last five years and
asked that we prepare a strategic plan. That process, our
sharing that with you, has really helped us to focus our
resources. The one and a half million that you've been able to
give us each year has taken us up to $3.7 million each year
that we have been able to devote to FDA, also which amounts to
16 staff years.
So it has had a tremendous impact on the amount of
resources that we have available. There are two main projects
that I'd like to mention that may very well have not happened
without this.
One is about food. We did an audit of the food recall
system that had--that found such problems that we had to issue
an alert rather than wait for the audit to come out.
And FDA fixed a number of the problems before it came out.
We discovered that most of the recalls are voluntary, and if
FDA and the manufacturer agree, there isn't a problem, right?
But if the FDA and the manufacturer do not readily agree that a
recall ought to happen, it can take a very long time to
resolve.
FDA has made some improvements in that area. We'd like to
see them take more advantage of some of the FSMA requirements.
We would not have known that there were these problems, and FDA
has stepped out to really work, to really work on this. They've
set up an FDA-wide senior team to work on it. They've taken
many actions. We do have some outstanding recommendations.
In addition to that, we wanted to look at food also from
the inspection side. And I talked a little bit about that in my
opening statement to say that we did that report in--we did a
report in 2010. They found exactly the same thing. It found
that most of the--that a significant portion of the time when a
significant violation is found, FDA does not take action, okay?
And that they--in half the cases, don't go back to
independently verify that the problem has been fixed.
We made recommendations that if there was a significant
violation an action had to be taken, and if there was a
significant violation there had to be a follow-up both in 2010
and again in 2017.
The money that you provided enabled us to go back to prove
that these problems still existed on the ground and to
emphasize that. And I am delighted to have this opportunity to
discuss those.
Mr. Bishop. Thank you. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman. Let me just
continue with the same line of questioning, okay. Why are there
surprise inspections of drug manufacturing here whereas in some
foreign countries, they're given 12 weeks' notice. Is that
fair?
Ms. Murrin. As an oversight entity, we're looking at how
the agency can function better. I do not--I really can't
comment on that policy based on our work.
Mr. Fortenberry. Why not? Where did the policy come from?
Ms. Murrin. It would have come from FDA. I am not familiar
with how it was developed.
Mr. Fortenberry. I'd like you to look into that, please.
Ms. Murrin. I would be delighted to do that.
Mr. Fortenberry. I'd like you to develop an understanding
as to why this unfair duality exists regarding domestic drug
manufacturers versus drugs that are manufactured in certain
foreign countries. I want to know why that exists, how it was
developed, what rationale there is for that, what justification
potentially, and if it needs to change, come back to us and
tell us it needs to change.
Ms. Murrin. We will do that.
Mr. Fortenberry. Apparently, it's grossly unfair.
Ms. Murrin. Yes.
Mr. Fortenberry. An unlevel playing field tilted toward
multinational corporations who have moved their manufacturing
overseas probably to take advantage of lax labor standards and
environmental standards for profiteering purposes.
And I want to know if that's embedded somewhere because of
the fault of Congress or the fault of implementing agencies.
Ms. Murrin. We will look into that and respond to you with
that information.
Mr. Fortenberry. This is very important particularly given
the raging coronavirus around the world and all of us suddenly
discovering how much of our supply lines are related to----
Ms. Murrin. Yes.
Mr. Fortenberry [continuing]. The area that is the source
of the infection.
Ms. Murrin. Yes, and this is one of the reasons why we're
very glad to be out in the fields on our foreign drug
inspection report.
Mr. Fortenberry. So are our drugs safe?
Ms. Murrin. As an OIG we're always going to be able to find
ways that things can be better, and we have identified certain
weaknesses and we've love to see them--and we are working with
FDA to see those fixed.
Mr. Fortenberry [continuing]. Extrapolating from that, what
percent of our drugs are not safe? See, we can't----
Ms. Murrin. Yeah, I don't----
Mr. Fortenberry [continuing]. Just keep talking in the
abstract, that we're looking for ways to fix this and we've
identified a problem. It's not fully your problem. I
understand.
Ms. Murrin. Right.
Mr. Fortenberry. But what recourse do I have? This,
frankly, is one of the most important hearings going on in the
United States Congress right now. It really is. And it falls to
this agency of yours and other people of good will throughout
the Executive Branch to come together right now and get in
front of this question so that there's a permanent
restructuring so that we're not left vulnerable again like we
are right now. I need your help in this regard.
Ms. Murrin. We will be very happy to work with you on that.
Mr. Fortenberry. But give me some more specifics. I'm
sorry, it's an awkward question but I've got to keep forcing
you out of the abstract to the specific. Tell us how large this
problem is. Quantify it in some way, not just we've identified
these gaps.
And I get it, you need to speak in that language. You need
to be careful.
Ms. Murrin. Right.
Mr. Fortenberry. But you have to understand I have to push
as well.
Ms. Murrin. No, and I do appreciate that. Sir, I'd be
worried that I would say a number that is----
Mr. Fortenberry. I understand. That's a fair answer. But
you know the challenge?
Ms. Murrin. I do know the challenge. And we shared the
concerns and really appreciate the concerns that you are
raising, and we'll be working as hard as we can to address
these issues and provide you with information.
Mr. Fortenberry. Okay. And this is the moment.
Ms. Murrin. Yes.
Mr. Fortenberry. Given the world's consciousness and our
government's attentiveness to this gap right now is starting to
be reported. It creates a moment of opportunity rather than a
moment of blame. So let's seize the opportunity to actually dig
deeper and find out why there's an unlevel playing field
potentially between the incentives to drug manufacturers to
stay in this country versus go overseas and the vulnerabilities
that that creates for us.
I need the specific answers to that. I need you to help me.
Ms. Murrin. We will be happy to work on that and get back
to you, sir.
Mr. Fortenberry. Mr. Chairman, is this fair?
Mr. Bishop. It is fair.
Mr. Fortenberry. Secondly, it's the same question. Is our
food safe?
Ms. Murrin. And I would give you the same answer.
Mr. Fortenberry. I know you have to, but this is the broad
architectural question.
Ms. Murrin. Right.
Mr. Fortenberry. And then if we move yes, but here are a
few gaps, great. Or no, we've got to get to work, fine.
Clearly, we're somewhere in between.
Ms. Murrin. I would put us more in the yes, but.
Mr. Fortenberry. Okay.
Ms. Murrin. Certainly than in the no.
Mr. Fortenberry. All right. That's fair. Thank you, Mr.
Chairman.
Mr. Bishop. Thank you very much, Mr. Fortenberry. Dr.
Harris.
Dr. Harris. Thank you. And now thank you very much for
doing the work that I think is important because the FDA is
very important, but you know, making sure that the FDA is
fulfilling what I think most Americans expect from the FDA is
important as well.
So let me just walk through some of the things you
mentioned in your written testimony here. First of all, one of
your identified risks associated with medical device safety and
security is the FDA needs to further mitigate risk of
cybersecurity threats.
Now, I just don't think of the FDA as kind of a
cybersecurity agency. In what you found do you think they have
the experienced personnel that could do this? Because these
devices are complicated. They are all over the place. They are
a lot of them. I imagine there are a lot of ways cybersecurity
could be compromised. Do they have the expertise in the agency
to do this?
Ms. Murrin. Actually, sir, we would say that this is an
area where FDA is very much ahead of the curve. FDA is seen as
a leader in the area of cybersecurity and in the security of
medical devices. And while thankfully, there has never been an
instance of those being compromised, FDA is devoting resources
to making sure that they are out ahead of it to prevent it
before it happens.
Dr. Harris. Good. So you think they will be able to deal
with that with the resources they have?
Ms. Murrin. I would certainly suggest that you ask them
that question, sir.
Dr. Harris. Okay.
Ms. Murrin. But we definitely in our reviews have found
them working in the right direction.
Dr. Harris. Okay. With regards to--and then you also in
part of your testimony, you expanded your oversight to include
curtailing youth tobacco use, combatting the opioid crisis,
fostering drug competition.
Now, you do say youth tobacco use, and you know the current
concern is with vaping, not tobacco products, but you can vape
other products. Are you looking at whether the FDA actually has
the ability, or any government agency has the ability, but you
are particularly concerned with the FDA, to actually regulate
vaping of non-tobacco products?
You see what I mean? I mean, they clearly--they can--they
have jurisdiction over tobacco products or nicotine.
Ms. Murrin. Right.
Dr. Harris. But if you're vaping marijuana and there's no
tobacco in it, no nicotine in it, it is unclear to me that--I
mean, do they have the ability under the current law to
regulate a device that delivers something that is either a non-
pharmaceutical or something that is a--the device itself, it's
delivering an illegal drug which would be marijuana?
Ms. Murrin. Not being a lawyer, sir, I would hesitate to
answer. I certainly understand your concern. I would be happy
to have our counsel's office prepare an answer. I believe that
the answer is no. Right now the authority is in tobacco in the
forms that it is delivered.
Dr. Harris. Yeah, that's what I imagine. But if you get
back to me on that, I appreciate that.
In terms of combatting the opioid crisis, one thing that
the FDA could do I think is to somehow make Naloxone more
available than it is. It is already--it is available, but you
know, there are controversies, you know, co-prescribing, is the
FDA doing all it can do to promote co-prescribing. So is that
one of the things you looked at, the FDA's role in making sure
Naloxone gets delivered to where it could be used to save
lives?
Ms. Murrin. We have not looked at that aspect with FDA. The
OIG has identified four, in our whole HHS portfolio, four
overarching priority areas. One of those is the opioid crisis.
And we have a body of work on the availability of Naloxone.
We have a body of work on the availability of drug assisted
treatment across the United States. And so we have been very
active in that area.
Dr. Harris. Okay. I mean, and again specifically, I hope
you do look at that.
Ms. Murrin. But in terms of FDA----
Dr. Harris. Terms of what the FDA's role in Naloxone is.
Ms. Murrin. Yeah.
Dr. Harris. Now one last topic is because you look at the
safety of things that are being made available to Americans,
and I am going to ask you about CBD, okay? Because CBD is a,
you know, Epidiolex is an FDA approved drug. I think that gives
the FDA the ability to regulate CBD in the marketplace.
It is clearly not being regulated enthusiastically or
broadly, and we get more and more reports of people who make
health claims, and sometimes they are not specific. You know,
I'm going to get this, but you're going to feel better if you
take it, or something like that. But the product doesn't even
have a lot of CBD in it or maybe none at all. So you know, it
is a purity issue.
Do you find that this is an area where the FDA has not used
its regulatory authority as it perhaps should and is there
politics involved in this or what because there are a lot
people who are taking this thinking that it is going to make
them feel better or has some medical qualities. But these
products are sometimes not pure.
Ms. Murrin. I have to acknowledge, sir, that our oversight
of FDA has not extended to that topic and that, you know, we
could add that to our list of potential topics, but I do not
have information that I can share with you now.
Dr. Harris. Thank you very much. I yield back, Mr.
Chairman.
Mr. Bishop. Mr. Aderholt.
Mr. Aderholt. Thank you, Mr. Chairman. It is encouraging to
learn that back in the year--I mean, or August 2019 report on
HHS's response to the Ebola outbreak that despite other
failures that FDA and HHS did collaborate effectively to begin
the trial and production of vaccine and drug treatments.
I know that the current party regarding COVID-19 is
containment and vaccines. However, I want to ask you about
important or, actually, how important is the rapid production
of antibodies and especially for people that are suffering from
the virus.
Ms. Murrin. Sir, I would suggest that you would get a much
better informed answer for that from FDA than I would be able
to provide you today.
Mr. Aderholt. Okay. So as far as, so you couldn't really
speak to FDA as far as necessarily about their--if they have--
do you know if they have looked into the possibility of private
sector providers might be able to provide infusion-ready
antibody drugs?
Ms. Murrin. I do not know the answer to that at this point,
sir, no.
Mr. Aderholt. Okay.
Ms. Murrin. OIG is currently developed its oversight plan
for looking at the coronavirus. There were meetings on it
yesterday and again today, and I will be sure to make sure that
that suggestion goes into those discussions.
Mr. Aderholt. Okay. Well, a lot of times in this
Subcommittee, the issue of cybersecurity is raised, and if the
protection of sensitive data is important, then the
safeguarding of medical devices including the ones that are
implanted are absolutely vital. Has FDA become more proactive
in this field following your recommendations now particularly
in the post-market setting?
Ms. Murrin. Yes. FDA has made progress in this area. We
continue to believe that more progress could be made. They are
moving from a passive reporting system to an active--looking--
an active look for data and I think that they will find that
that is much more useful to them, so yes, I do believe that
they are making progress.
Mr. Aderholt. Do you believe there is any particular areas
where a rush to connectivity should be slowed down or cautioned
in any way?
Ms. Murrin. I think everything that FDA does should be done
with caution, sir.
Mr. Aderholt. Mm-hmm.
Ms. Murrin. I don't think that--as I said, fortunately, we
have never had a real world experience of this, and I think it
is very important that we continue to take this as a top area
of concern, but I think that we should continue to move at the
cautious pace we have been.
Mr. Aderholt. Is there any particular sectors of the
healthcare industry that are acting irresponsible with
cybersecurity from your viewpoint?
Ms. Murrin. In terms of medical devices, sir? No I----
Mr. Aderholt. Or anything, you know.
Ms. Murrin. No.
Mr. Aderholt. Okay. I want to ask you about the actions you
have taken to improve and protect food supply and reduce
preventable foodborne illnesses. You stated that the FDA has
agreed with several of your recollections to address food
supply vulnerabilities. How quickly is FDA acting on these
recollections?
Ms. Murrin. It varies widely, sir, on a number of issues.
For instance, when we issued the early alert on the audit
report that came out on food recalls, most of those
recommendations were implanted even before the full audit
report was issued, okay?
And then again, however, you can see on inspections where
we--while there have been some of our recommendations that we
have made to them have been implemented, there are
recommendations that we have had about how to improve food
inspections, how to deal consistently with significant
violations that have not been dealt with in 10 years.
Mr. Aderholt. Mm-hmm.
Ms. Murrin. And we very much appreciated this opportunity
to bring that to the Subcommittee. I believe that we have
provided the Subcommittee with this list of all of our open
recommendations with FDA.
Mr. Aderholt. Okay.
Ms. Murrin. And we would be happy to provide any additional
information on any of those.
Mr. Aderholt. Okay. What steps do you plan to be taking in
the upcoming year to better guard against food production lines
or better guard food production lines themselves? Is there any
particular steps that you could mention that come to mind or
whatever, or any kind of additional structural changes that you
believe need to take place?
Ms. Murrin. Well, as we have been talking about, the follow
up on significant violations. I think that is exceedingly
important. There also continue to be issues about food safety
that I would have--why don't I--may I respond to that later,
sir, and give you a full list?
Mr. Aderholt. Yeah, if you could get back with us on that,
that would be----
Ms. Murrin. Yes.
Mr. Aderholt. But if you could, it would be helpful to get
back with us. Thank you.
Ms. Murrin. Thank you.
Mr. Bishop. Mr. Cuellar.
Mr. Cuellar. Mr. Chairman, thank you so much. Good morning.
Ms. Murrin. Good morning.
Mr. Cuellar. Sorry I am late. I had two other committee
hearings at the same time.
I want to say that, you know, I want to talk about the
coronavirus. And on February 20th, I joined some of my House
colleagues a letter to the President, asking him that if there
is any vaccine or treatment developed by U.S. taxpayer dollars
that it would be accessible, affordable, and available. I just
want to see how we can work with the FDA in your position.
Suggestions: to make sure that as we come with that that
the rural communities be guaranteed access as, you know, we
sometimes have a tendency of going to the big urban areas, but
as somebody that represents a lot of rural areas just like a
lot of our members how do we make sure that it is not only the
large health departments in large cities in urban area cities
get that, but also the rural areas. Any suggestions or thoughts
on this?
Ms. Murrin. Well, yes, as a matter of fact. Something that
the Office of Inspector General could contribute to this
conversation is that we have in other areas looked at the
availability, for instance, I believe I mentioned medication-
assisted treatment, where that is available in the United
States versus where the need is, and we could identify the
availability in rural areas versus city areas, and that is but
one type of area where we have looked at the distribution of
available resources as compared to where the problem is.
Mr. Cuellar. Did you all come up with any recommendations
in that area that you looked at?
Ms. Murrin. Yes, we did, sir, and unfortunately, I did not
prepare to discuss that report today.
Mr. Cuellar. That is right.
Ms. Murrin. But I would be happy to get back to you about
that.
Mr. Cuellar. If you don't mind.
Ms. Murrin. Yes.
Mr. Cuellar. And then to finish your thought? Sorry.
Ms. Murrin. No, but that OIG could take a look at
distribution on issues like a vaccine just to see where it was
going and where it was available and how that compared to urban
and rural settings.
Mr. Cuellar. And I certainly feel that your office can
certainly look at that distribution. I am just concerned
sometimes we have a tendency of forgetting the rural areas.
Ms. Murrin. Yes.
Mr. Cuellar. We have got to make sure we don't. But anyway,
thank you for the job that you all do. Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Cuellar.
Ms. Murrin, your office released a report last August that
raised concerns about FDA's resolution of longstanding OIG
recommendations and your report said that FDA has since tackled
the backlog and now have fewer outstanding issues. Could you
tell us whether or not you feel that FDA is now on a good path
to address future recommendations on a timely basis? Is there
anything you think the Subcommittee could do to ensure FDA's
continued follow-up to your recommendations more promptly?
Ms. Murrin. Yes, thank you very much for that question. I
would certainly say that FDA has on a better path. What that
report found was that in 2015 and 2016 FDA had actually not
provided any information in terms of its actions on any of our
audit recommendations.
Since that time, there has been improvement. In the last
five years, OIG has issued 70 recommendations from either our
audits or our evaluations. 31 of those recommendations have
been implemented. 39 of them remain unimplemented or not
completely implemented. Then there is another 11 that we had
recommended before that that still remain unimplemented. So
that is a total of 50 unimplemented recommendations.
I do believe that hearings like this where we are able to
talk about what we particularly see as the most important
issues and the most important outstanding recommendations can
raise the priority for an agency and inspire progress.
Mr. Bishop. Thank you. We would certainly welcome any
suggestions on your part for what we can do. You released an
audit of the FDA food safety recalls in September of 2017.
Ms. Murrin. Yes.
Mr. Bishop. Which was another depressing report to read.
You found that the FDA could not always ensure that firms
initiated the recalls promptly, and some customers became ill,
and others were at risk of illness, and some cases of death.
You found that the FDA relies primarily on voluntary
recalls which makes the timeliness largely dependent on the
firm's willingness to take action, and you found that the
recalls were not always initiated promptly because FDA does not
have adequate procedures to ensure that firms take prompt and
effective action in initiating voluntary food recalls, and you
found that FDA didn't always evaluate the health hazards in a
timely manner.
What is the FDA doing to better respond to your
recommendations about strengthening their recall program and
what challenges remain?
Ms. Murrin. Thank you very much for that question. This is
an area where we have seen great progress on the part of FDA.
FDA has implemented our recommendations as regards in improving
their procedures. They have set process timelines for when they
will have made decisions about a recall. They have improved
their regulations in that area.
What they have not done, sir, that we would really very
much like to see them do is they haven't put into their
database information that would allow them to track the time
from when they first learn about a problem to when the recall
actually happens, and that is the most critical piece of
information, and we think that they have to be able both to
plan for success and to test their success.
Mr. Bishop. Thank you very much. Your 2017 report on the
domestic food safety inspections is also hard reading. You said
that FDA wasted inspectors' time going to the sources who are
out of business or not operating, that they found serious
violations--when they found serious violations that they didn't
always take action immediately to remedy the problem, that they
failed to conduct timely follow-up inspections; in half of the
cases, they took no action within a year in 17 percent of cases
and it never did a follow-up inspection. So what is your review
of what FDA promised to do address your filings, and do you
plan to go back and check what they did, and can you walk us
through audits that you expect to release this fiscal year?
Ms. Murrin. Yes. On this topic, we just did the follow-up
because we had done a 2010 report on inspections that had found
these problems and that had made a series of recommendations.
We went back out in 2017 and came back even more strongly
advocating for our recommendations that we have been talking
about here today that if there is a significant violation found
there needs to be a follow-up action, there needs to be
regulatory action on the part of FDA, official action, and then
there needs to be a follow-up review.
Also, we have been recommending a civil monetary penalty,
that is actually our oldest outstanding recommendation, that if
FDA had the ability to do that, that that might help motivate
facilities to fix problems quickly.
Mr. Bishop. You are the OIG. Do you feel that they have the
authority, or do we need to give them authority from Congress?
Do they have existing authority to ensure the end of that
oversight in terms of health, safety, and welfare?
Ms. Murrin. Sir, they have the existing authority certainly
to follow through on every single violation, and to do the
follow-up review to make sure that action has happened.
Mr. Bishop. Does that include----
Ms. Murrin. The civil monetary penalty, they do not have,
and that would take a legislative change.
Mr. Bishop. Thank you very much. Mr. Fortenberry.
Mr. Fortenberry. Ms. Murrin, you said that this hearing is
very important to you----
Ms. Murrin. Yes.
Mr. Fortenberry [continuing]. In terms of setting
priorities. I'm going to go back to the first question, and I
asked you two questions. One is given the huge amount of
dependence we have on overseas supplies of drugs and drug
ingredients, the mechanism by which we ensure that those drugs
are safe is deficient. That is what I hear you saying.
Ms. Murrin. I said that we are currently studying.
Mr. Fortenberry. That is the first question. How is that to
be improved? The second question is why the imbalance? What are
the incentives in our system that have compelled these
corporations to move those product productions overseas?
And you said, ``We are going to get back to you on that.''
So how is that going to happen? I met your fine staff here, and
there's a lot of notes being taken. So give me how you are
going to do that and what timeline.
Ms. Murrin. We will respond to you within two weeks with
our plan of action.
Mr. Fortenberry. Okay, great. And I want to--I don't want
to put the Chairman on the spot, but I think we are in
alignment in this regard. Is that fair, Mr. Chairman?
Mr. Bishop. That is.
Mr. Fortenberry. That we can say that this is a priority of
the committee?
Ms. Murrin. Yes.
Mr. Fortenberry. Thank you. So that's important to me. I
want to turn though to--it is important to all, not me. It is
important. We have a moment here. I can't emphasize it enough.
There is clarity around just how big a problem this is because
of the coronavirus outbreak. We've known it is a problem for a
long time, yet we are passive in light of it until there is
some emergency.
We're in the emergency room. 911. Help us answer this
question now.
Ms. Murrin. Yes, sir. We very much would like to take
advantage of opportunities to solve problems.
Mr. Fortenberry. Thank you. Let me ask you another question
diverting topics for a moment. I want to talk about the disease
called ALS, sometimes known as Lou Gehrig's disease.
It's that plus many other degenerative diseases, there is
no cure. However, in the case of ALS there is a treatment
showing some promise on the horizon. Last year I introduced a
bill called ALS Placebo No More. We all agreed, or many of us
agreed, on a bill called Right to Try a little while back. We
thought we'd solved the problem for the sickest Americans who
are willing to go into experimental treatment assuming that
full liability themselves. But it doesn't solve a problem for
everyone.
So since your agency does extensive audit work over the
National Institutes of Health and the Food and Drug
Administration, would you be willing to work on an assessment
of how these two agencies can improve their work on clinical
trials?
Ms. Murrin. If funding is available within the priorities
that are set, we would be delighted to do that.
Mr. Fortenberry. Okay. So you have resource constraints.
This isn't a question you've looked at before I assume?
Ms. Murrin. That is correct.
Mr. Fortenberry. Well, here is a deeper, related question.
If you could provide a review across FDA centers to determine
whether drug treatments within clinical trials are continued
for patients showing benefits, that would be most helpful.
That would also be consistent with the spirit of the Right
to Try law that we passed earlier which has some inhibiting
factors built into it, sadly. Gave a lot of us a head fake
unfortunately and gave false hope to many people.
A degenerative disease like ALS where there is a treatment
on the horizon and a clinical trial, it basically excluded
certain people for non-good scientific reason. There is a
problem here. We have raised this with the FDA. There is some
admission that, yeah, we need to change the procedures here.
If there could be work across NIH and FDA to ensure that
these two agencies can work together to improve the clinical
trial process, it would bring hope in a manner that is
consistent. We can't promise anything. But it would bring hope
to our structural approach to how we move drugs onto the market
quicker or give people exceptional opportunities when they
basically have no other option.
A little bit beyond your purview, I get this, and you did a
fine job of segueing to help me by giving me more funds. I
heard what you said, okay? But again, this is important because
there is suffering. There are certain structural opportunities
for change, if you well, let's put it that way, that we think
could alleviate the suffering and bring treatment options to
people quicker.
Ms. Murrin. Thank you. Mr. Fortenberry, every year the OIG
shares with this subcommittee its strategic plan for FDA, and
we actually also produce a strategic plan for NIH. We would be
happy to share those particular--the FDA one and----
Mr. Fortenberry. I'm skimming the surface here. We can
actually provide you some of the insights we have gained, some
research in this regard to help you prioritize.
Ms. Murrin. That's exactly what I was hoping to say that we
could use the process of producing that document to make sure
we're----
Mr. Fortenberry. This is really important for a lot of
people suffering. So thank you very much.
Ms. Murrin. Yes, thank you.
Mr. Bishop. Mr. Aderholt.
Mr. Aderholt. I want to ask a little bit about oversight in
dealing with tobacco use and opioid. Can you update us on the
FDA's retail compliance inspections and the availability of
tobacco products to youth and children?
Ms. Murrin. I am going to be in an excellent position to be
able to do that, sir, in some amount of time. We have actually
just begun a review of FDA's retail inspections that is going
to look at where those are happening. It will look at all the
different retail establishments of any type that are providing
any type of tobacco product.
And we will be able to give you better information about
the sort of areas where those are happening, if there are any
areas where, you know, they clustered around schools, are they
not going around schools. We will have infinitely better
information to provide you with that in a year.
Mr. Aderholt. When? In a year?
Ms. Murrin. Yes, I would think--we may have some of it
early.
Mr. Aderholt. Initial information?
Ms. Murrin. Initial information earlier than that. But that
is an area of profound concern to us and that is our very next
study that we have actually just started.
Mr. Aderholt. Have you assessed or taken action on online
sales?
Ms. Murrin. That will be part of this consideration. These
FDA inspections happen both for any type of retail situation,
so that would include an online store.
Mr. Aderholt. That would--okay. I think it is important
that we don't let mismanagement of opioids result in the
unavailability to patients that really need pain control
especially on a short-term basis, oh, after they've had some
kind of medical procedure.
What would be your opinion of a voluntary or mandatory rule
about which prescribers can only prescribe, say six, opioid
pills to a patient and that any refill has to be signed off by
a prescribing doctor?
Ms. Murrin. A level of medical knowledge would be needed to
speak at that specifically, and I don't think that that would
be appropriate for me.
Mr. Aderholt. When you have to say six, yeah.
Ms. Murrin. Yeah.
Mr. Aderholt. What about some limited amount?
Ms. Murrin. I believe that that happens now.
Mr. Aderholt. Do you know how that works?
Ms. Murrin. Not through our studies. I do not have that
information here. But we have done a full range of work on
opioids and we would be very happy to arrange for a briefing on
everything that we've done.
Mr. Aderholt. Have you identified any areas where FDA did
not properly hold manufacturers accountable for mitigating the
risks of opioid use and abuse?
Ms. Murrin. We are about I think within the next month to
six weeks about to issue a report that will touch on that
subject. It will look at how FDA has used--and I'm sorry I
don't remember what REMS stands for--one of its programs for
monitoring drugs and their impact out in the real world and how
they've been using that or not using that in terms of the
opioid crisis. But we expect that report to come out final in
another month.
Mr. Aderholt. On a somewhat related issue, tomorrow the
House is going to consider a piece of legislation that is going
to prohibit remote retail sales of tobacco products. What is
your opinion as to how reasonable it is to make it illegal for
adults to purchase tobacco online when alcohol can be purchased
that way?
Ms. Murrin. I would say that that's a policy call that the
OIG would not have a position on.
Mr. Aderholt. Okay. Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Mr. Aderholt. Ms. Murrin, I think we
have about exhausted our questions for you today and we want to
thank you very much for being here. Along with what we have
discussed, we will also forward you some additional questions
for the record, and we'll appreciate your diligence in getting
your responses to us by the deadline set by the committee. And
of course, Mr. Fortenberry has indicated a request that you
promised to get us within two weeks, and we look forward to
receiving that.
Thank you so very much for your testimony. We look forward
to working with you as you continue the fiscal year 2020/21
appropriations process. With that, the committee is adjourned.
Tuesday, March 3, 2020.
MEMBERS' DAY
Mr. Bishop. The subcommittee will come to order. Good
morning. And today, we would like to welcome our colleagues on
both sides of the aisle to give testimony before the
subcommittee on the agencies that are under our jurisdiction.
This is a tremendous opportunity for us to listen to a diverse
group of members from across the country to share their views
on a wide spectrum of issues related to our bill.
We look forward to hearing your thoughts today on the
appropriations process and learning more about the programs and
the issues that affect your district and your constituents.
Your input is invaluable as we draft the funding legislation
for the upcoming fiscal year for USDA and FDA and Commodity
Futures Trading Commission as well as the Farm Credit
Administration.
Before we begin, I would like to remind everyone that we
have several members testifying today, so we would like to
strictly adhere to the five-minute rule so that we can remain
on schedule. I would like to thank every member who has taken
time out of their schedules to speak to us today or to submit a
written request or written testimony, and we appreciate your
interest in the work of the subcommittee. And at this time, I
would like to recognize the ranking member, Mr. Fortenberry,
for any opening remarks that he would like to make.
Mr. Fortenberry. Thank you, Mr. Chairman, and thank you for
calling this important hearing. It is an important reminder
that we represent Americans. And in order to do our job well,
we need to hear--those of us who have been put in these
extraordinary positions of leadership over various aspects of
the government, we need to hear directly from the
representatives of the people.
Particularly in the ag sector, we do a tremendous amount of
good creating the stabilization policies that allow America to
have the lowest grocery prices in the world and that protect
people with food insecurity. So this is a very, very important
space. So I will look forward to hearing our members--from our
members today how we can potentially improve, become more
effective or change if necessary. So thank you, Mr. Chairman,
for calling the hearing.
Mr. Bishop. Thank you. With that, we will like to welcome
our members. First on the agenda is Mr. Scott Perry from
Pennsylvania.
The floor is yours, Mr. Perry.
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Tuesday, March 3, 2020.
WITNESS
HON. SCOTT PERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
PENNSYLVANIA
Mr. Perry. Well, thank you very kindly, sir. Gentlemen,
staff, I appreciate the opportunity to present my views and
priorities for the fiscal year 2021 Agricultural Appropriations
Bill. The USDA Sugar Program disproportionately harms the
employment opportunity and wages available to constituents
across the district I represent while imposing higher consumer
costs on all Americans.
To alleviate this harm, I request the subcommittee prohibit
USDA from using funds for the following purposes: providing
price support loans for raw cane sugar or refined beet sugar,
establishing an overall allotment quantity for sugar and
purchasing sugar for the purpose of the Feedstock Flexibility
Program. Collectively, these programs would remove three of the
four pillars of the U.S. Sugar Program, greatly reducing the
negative economic impacts of this program--bless you--and
improving the freedom of all Americans.
The current U.S. Sugar Program represents an anti-free
market scheme that imposes a massive hidden tax on both
American businesses and consumers for the benefit of a small
concentrated group of special interests. These Soviet-style
policies impose significant, unnecessary costs on the domestic
food manufacturing industry and the consumer.
In aggregate, the results of the U.S. Sugar Program are
devastating to the economy. According to the American
Enterprise Institute, these policies have imposed a 2.4 to $4
billion worth of losses to consumers and sugar users across the
nation. Domestic sugar-using industries, like those in the
district I represent, are particularly sensitive to these
market distortions, as the cost of their main input is more
than double the global price of sugar.
These industries provide jobs to more than 600,000
Americans, including 40,000 Pennsylvanians. Unfortunately, the
exorbitantly high cost of sugar creates a disincentive for
these companies to continue to manufacture here in America,
resulting in three food manufacturing jobs lost for every
single one sugar-producing job saved. As a result of these
programs' impacts, the Sugar Program resulted in the loss of
123,000 jobs over the past two decades.
Moreover, the government imposed high operating cost of
this--of these industries prevent the creation of 17,000 to
20,000 new jobs each year. It should not be controversial to
end this socialist program that imposes significant harm on the
workers and consumers of our country alike. It is un-American
and unjust to take tax dollars from the constituents I
represent and then spend them attacking our very own economy.
And for this I thank you for your consideration and stand for
your questions.
Mr. Bishop. Thank you very much, Mr. Perry. I have no
questions.
Do you have any questions?
Thank you very much for your testimony.
At this point, we are happy to represent Representative
Jenniffer Gonzalez-Colon from the Commonwealth of Puerto Rico.
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Tuesday, March 3, 2020.
WITNESS
HON. JENNIFFER GONZALEZ-COLON, A DELEGATE IN CONGRESS FROM THE
TERRITORY OF PUERTO RICO
Miss Gonzalez-Colon. Thank you, Mr. Chairman, and thank
you, Ranking Member, for allowing me to come here today to
speak about--on behalf of the people of Puerto Rico. Today I
will only focus on one of the main priorities. And that is on
increasing the funding for the Nutritional Assistance Program
for Puerto Rico. As you are aware, Puerto Rico does not
participate in the National Supplemental Nutrition Assistance
Program or SNAP. Instead, Puerto Rico has a Nutritional
Assistance Program or NAP, which is capped-block-grant funded
every year.
This automatically put us in a disadvantage because we do
not have a program that can expand or contract depending on
need or demand. Consequently, I have constituents that live
below poverty levels but cannot benefit from the program
because of the strict income restrictions that need to be put
in place to meet funding gaps.
During my tenure as representative in Puerto Rico in
Congress, the island has two--had--has had two consecutive
hurricanes, Irma and Maria, which caused widespread
destruction. Additionally, the southwestern region of the
island has been--experience ongoing seismic activity since
December 2019. These three disasters did not create the
challenges with NAP. However, they exacerbated these challenge
and have highlighted how unsuitable and restrictive the program
island--the program is and confirm the need to strengthen the
program through a robust funding. The Administration request
for fiscal year 2021 is $1.9 billion. Although I do appreciate
this increase from the enacted level for the Fiscal Year 2020,
we need additional assistance to properly serve NAP
beneficiaries and meet the goal of increasing security in the
island for over 1.3 million participants.
Therefore, I will be requesting an increase in the block
grant for Fiscal Year 2021 that is needed for the island. This
will help us increase benefit levels which are drastically
below the national average under SNAP and improve program
participation to help my constituents access the nutritional
assistance they need and deserve.
SNAP beneficiaries in the United States, continental United
States, Guam, and the U.S. Virgin Islands receive close to 50
percent more in benefits per household than their counterparts
in NAP. To give you just an example about this, a household of
one in the neighboring U.S. Virgin Islands receive
approximately $250 per month. In Puerto Rico, a household of
one is eligible for a maximum of approximately $112 per month.
Similarly, a household of two in the continental United
States is eligible for approximately $357 per month. A
household of the same size in Puerto Rico is eligible just for
a maximum of $216 per month. Increasing the block grant will
increase our ability to mitigate the disparity until we reach
the ultimate goal of transitioning to SNAP. And that was
something--a study that was approved during the last Congress.
I want to thank you and thank all the members of the committee
and the subcommittee for their hard work and have--they have
provided to Puerto Rico through the Supplemental Disaster
Appropriation for NAP.
Still, I would like to stress that not addressing the
immediate underlying program, which is significantly--
significant funding deficiencies at the base program level will
continue to be an obstacle to achieve nutrition security for
the people of Puerto Rico. That is the reason I came here
today. With that, I yield back.
Mr. Bishop. Thank you very much, Representative Gonzalez-
Colon. You should know that the subcommittee is very, very
concerned about the disparities that exist with the nutrition
programs for Puerto Rico. And we are really trying to develop a
path toward regularizing or at least making the relief
available and the programs available to Puerto Rico the same as
the programs for the other territories and the states.
It is going to be a task, but I think it is the right thing
for us to do. I haven't discussed it with Mr. Fortenberry, but
I feel very strongly, and there are other members of the full
committee that feel equally as strong that we must do something
to equalize the disparities that Puerto Rico residents and
citizens face.
Puerto Rico citizens are just that. They are citizens, and
they should not be discriminated against with regard to the
resources that are available to every other American. And we
need to get on the path to making that happen. And so I
appreciate your testimony. We appreciate the urgency of the
moment for the immediate problems with the tremors as well as
with the responses to the previous natural disasters that have
occurred. But we look forward to working with you and others to
try to--to make sure that we can resolve this disparity.
Miss Gonzalez-Colon. Thank you, Chairman. I just want to
add something. One of the main differences is, as we are part
of the NAP program and not the SNAP, every time there is a
disaster, we need to come here to Congress to achieve the
difference. If we were in the SNAP program, we will never be
here.
Mr. Bishop. I understand, and I agree with you 100 percent.
And of course hopefully we can get the other members of
Congress and the other body across the hall to join us and the
Administration in trying to right this long-term wrong.
Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman. We actually like
you being here. I do wish it was under less adverse
circumstances because the island has been traumatized by
natural disasters. And I would say, for my colleagues, Miss
Gonzalez-Colon has done a tremendous job of informing the
Congress, representing the people of Puerto Rico, gently yet
persuasively trying to make various cases as to how to better
integrate Puerto Rico into given programs and also, on the
other side of the ledger, speaking to the reality of how much
Puerto Rico contributes to the well-being of the overall United
States through, obviously, economics but also military service
and a variety of other impacts that, again, demand full and
fair consideration of these questions that you raise. So I want
to thank you for your leadership.
Miss Gonzalez-Colon. Thank you, sir.
Mr. Bishop. The subcommittee will stand in recess
momentarily as we await the arrival of Mr. Hagedorn. He is
minutes away.
[Recess.]
Mr. Bishop. The committee will now come to order. We
welcome Mr. Hagedorn.
The Reporter. Can we turn on, please, Mr. Chairman?
Mr. Bishop. I understand we----
The Reporter. Mr. Chairman?
Mr. Bishop. If there is anything----
The Reporter. Microphone.
Mr. Bishop [continuing]. You would like to share with the
committee pertaining----
The Reporter. Microphone, please.
Mr. Bishop [continuing]. To 2021 appropriations process?
---------- --
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Tuesday, March 3, 2020.
WITNESS
HON. JIM HAGEDORN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
MINNESOTA
Mr. Hagedorn. Mr. Chairman, Ranking Member, thank you for
the opportunity. Pleasure to be with you. I represent the First
District of Minnesota, some of the finest farmers and
agribusinesses in all the country. And, you know, pretty much
what we do with our sustainable ag practices, livestock farming
and business--you know, rural business lending, it is--it
sustains our rural way of life. And so we are here today to
advocate on about four things.
The first is I would like to ask the committee to consider
a modest increase of $3 million for the USDA's Center for
Veterinary Biologics. Now, the CVB is the regulatory body for
veterinary biologic manufacturers that contributes over $500
billion worth of economic output. And in response to the 2015
bird flu outbreak which cost poultry industry $1.6 billion, you
know, the CBD--CVB--boy, I am having a tough time with that--
has shown the ability to do more with less.
And when you think of what is going on now with the African
swine fever and the potential that that has to come in and harm
our not just pork industry but our corn farmers, our soybean
farmers, packers, everybody down the line, we need all hands on
deck. And this is certainly an area where for just, you know, a
few million dollars more, I think we can beef that up and
protect our food supply and our farmers. Second is in the
alfalfa industry. I would like to encourage you to consider the
Administration's $5 million request to be granted for alfalfa
seed and alfalfa forage systems research program which improves
yields, water conservation and other research into the
potential advance for alfalfa seed and alfalfa forage industry.
Alfalfa contributes more than $9 billion, if you can
believe it, per year to the nation's farm economy. It is an
economic engine in rural communities. And as we look to feed,
fuel, and clothe the growing world, investments and improved
soil health, water usage and biodiversity are key to a
profitable and sustainable agriculture industry.
Next is the Oat Research Program, and I would like you to
consider the $2.5 million increase for the Agricultural
Research Service in oat plant breeding and disease resistance.
Oats are an essential and heart-healthy grain for both human
consumption and animal feed and also valuable and in a number
of areas. So I want to move to the last point, which is a key
one for our district. And that has to do with the hundred
million dollars that the Administration is proposing for--to
promote domestic ethanol and biodiesel infrastructure and
consumption.
Now, recently, we have been working together in bipartisan
fashion in the Agriculture Committee and elsewhere to end what
is known as the small refinery waivers which have undermined
the ethanol program especially. And the President of the United
States himself has come out and said that his policy is to
blend 15 billion gallons of ethanol and 2.4 billion gallons of
biodiesel. And, you know, there was a regulation that came out
of EPA. We are a little uncomfortable with it.
Many of us, again, in bipartisan fashion, have sent letters
down to EPA and said, ``We are going to hold your feet to the
fire to make sure that this program, the Renewable Fuel
Standard, is administered the way Congress intended and the way
the President has directed.'' And so what we are talking about
here is $100 million to promote that at the gas station. So
this program will encourage gas stations to invest in biodiesel
and ethanol infrastructure by sharing costs related to and
offering sales incentives for the installation of fuel pumps,
equipment, and infrastructure. And I look forward to working
with you and all our fellow members in Congress to make sure
that that is fully funded.
So with that, I really appreciate the subcommittee's time
and your consideration of these measures. They will go a long
way into making sure that we protect the food supply, our
agribusinesses, our farmers and our way of life in not just
Southern Minnesota but all across the United States. So with
that, I will yield back my time unless you have any questions.
Mr. Bishop. Thank you very much, Mr. Hagedorn. I don't have
any questions. I appreciate your taking the time to come and
sharing with us. You have some very valid concerns, and we
certainly will do our best to try to assist in any way that we
can subject to the limitations of our available resources.
Mr. Hagedorn. Well, again, thank you for your time.
Appreciate your consideration.
Mr. Bishop. Mr. Fortenberry.
Mr. Fortenberry. Yeah, just right quick, Mr. Chairman, I
appreciate the gentleman raising the issue of the small
refinery waiver dynamic. I have been a part of that effort to
try to make sure that our perspective on this is properly
socialized. It is a bipartisan effort to make sure that, again,
ethanol and other biofuels as well, but particularly ethanol,
are fully integrated into our fuel system.
We forget where all of this came from. In an earlier energy
package, there was a pollutant additive to gasoline. Ethanol
was on the verge of a breakout moment. There were some public
policies put in place that allowed it for environmental
considerations to be integrated into our primary fuel source in
the country for transportation. In addition to that, of course
ethanol creates another type of market for our farmers. And
those of us who have an alignment of both inputs and outputs
use the byproducts from it to actually put it back into the
food stream through cattle production. So this is a real winner
for America, but we don't often tell that story. So I
appreciate you raising the issue. It is about sound
environment, new markets for our food products and a
regeneration of natural resource itself. So that is very
important. Secondly, I did want to ask you a quick question. Is
the Alfalfa Program a consortium of universities? Do you know
is it embedded in a particular place?
Mr. Hagedorn. I am not that familiar with your question. I
am sorry. We will get back to you on that.
Mr. Fortenberry. That is fine. We will----
Mr. Hagedorn. Follow up.
Mr. Fortenberry. We will find out. Thank you.
Mr. Hagedorn. Follow up. Thank you.
Mr. Bishop. Thank you very much. With that, the
subcommittee will stand in recess subject to call of the chair.
[Recess.]
Mr. Bishop. The subcommittee will now come to order, and we
would like to welcome Dr. Schrier. We would appreciate anything
you would like to share with us pertaining to our 2021
appropriations process, and the floor is yours, Ms. Schrier.
----------
Tuesday, March 3, 2020.
WITNESS
HON. KIMBERLY SCHRIER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
WASHINGTON
Ms. Schrier. Thank you, Chairman Bishop, and thank you,
Ranking Member Fortenberry. I am here today to discuss a few
issues of great importance to me regarding agriculture and
specifically funding to study the impacts on the link between
atmospheric CO2 and nutritional values of crops, WIC,
agricultural research, maintaining a fix to the specialty crop
research initiative, School Kitchen Equipment Grants, and
ensuring school lunch transparency about nutrition. I do not
have time to go into all of these. So I will pick a couple. The
first is about----
Mr. Bishop. We will definitely put your testimony in the
record, your full testimony.
Ms. Schrier. Thank you.
Mr. Bishop. And we appreciate your interest and your
involvement.
Ms. Schrier. So the first is about atmospheric carbon
dioxide and nutritional value. In the coming weeks, I will be
introducing legislation to dedicate research funding to study
the link between CO2 and food crops. The concentration of
carbon dioxide in the atmosphere has been increasing steeply.
And one of the most significant impacts of rising carbon
dioxide in the atmosphere is on food security.
The interactions between rising CO2 and food crops will
have societal and economic consequences, including especially
consequences for vulnerable and low-income populations. To
date, most of the research on this topic has studied the impact
on plant yields. However, preliminary studies indicate other
serious potential consequences such as declines in key
nutrients, protein, and minerals. When plants, including crops
like wheat and rice, absorb more carbon dioxide, they increase
the synthesis of carbohydrate and decrease concentrations of
protein and nutrients like iron and zinc, which are critical to
human health.
As a pediatrician, I understand that people with iron
deficiency can face a range of symptoms, including iron
deficiency anemia. Zinc deficiency, which impacts about a
billion people worldwide already, is associated with rashes, GI
symptoms, and failure to thrive. And folate is critical for
pregnant women especially because their babies, if they don't
get enough folate, can be born with neural tube defects.
And so as CO2 concentrations rise, globally, this will have
a tremendous impact on human health. My bill creates a pilot
grant program under NIFA that will fund research to study the
impact of CO2 in the atmosphere on nutritional value of food
and then the implications for human and animal health.
I would also like to briefly touch on SCRI, the Specialty
Crop Research Initiative. This funds research to address the
critical needs of the specialty crop industry. It supports a
lot of the crops of the 300 crops in Washington State. Past
funding projects have supported efforts to combat fungicide
resistance in wine grapes, precision irrigation for fruit
growers, and pest prevention in onions and other crops. And I
have worked hard to make sure that specialty crop researchers
have access to the resources they need and was happy that there
was a fix included in the 2020 Omnibus Appropriations Act.
And until we have a permanent fix, I would just ask that
that language restoring the waiver authority be included in
annual appropriations. Next, cherries and research funding for
little cherry disease. In Washington State, apples and cherries
are among our top 14 exports. Protecting and strengthening the
tree fruit industry is vital to our economy. And this past
cherry season, it became apparent that Pacific Northwest cherry
growers are facing a substantial threat from something called
little cherry disease, a condition caused by three viruses that
can either be transmitted from insects or through root systems.
And so once it is detected, the only option is to remove
the tree entirely. And it can, of course, spread through
orchards. Little cherry disease has reached epidemic
proportions in Washington State, and growers are scrambling to
obtain new tools to improve detection and control the spread.
So several of the requests noted in this letter are for
research positions or grant programs that could provide
valuable resources to leverage industry efforts related to LCD.
And I encourage the committee to increase ARS salaries, make
sure we have abundant resources for research, and I will submit
the remainder of my concerns by paper. Thank you so much to the
committee for the opportunity to testify today on a few issues
that are critically important to the state of Washington. Thank
you so much.
Mr. Bishop. Thank you very much, Dr. Schrier. Your concern
are very well taken, and I think the--as--coming from a state
that has a significant number of specialty crops and the need
for research is very much there. I just wish we had more
resources to apply to ag research because ag research is the
reason why we are able to produce the highest quality, the
safest, and most abundant and most economical food and fiber
anywhere in the world.
So I appreciate that very much, and I think the WIC
program, the SNAP program, the Equipment Lunch Grants, and the
school lunch transparency, all of those are issues that are
vitally important to the subcommittee and to the full
Appropriations Committee.
And I thank you for bringing to our attention, and we will
do our very best to try to see that your requests are honored.
Ms. Schrier. Thank you for your consideration. Have a good
day.
Mr. Bishop. Mr. Fortenberry.
Mr. Fortenberry. Don't leave, Doctor. I have something to
say. Thank you for your testimony. I think--in the specifics
that you provided, I think the overall vision that you are
talking about is what I call an ecosystem of well-being. Food
is tied to health, agriculture, and diversification of
agriculture and healthy food is inextricably tied to community
well-being.
The small cherry disease was something that I am not
familiar with. We don't have an abundance of cherry production
in Nebraska. But, again, as I said earlier, hearing from
members helps appropriately socialize us as to the very--
various distinctions that people have around the country in
terms of their capacity and specialization. So hearing about
that one particularly is helpful. So thank you very much.
Ms. Schrier. Thank you. Yeah. The cost later for a lot of
spina bifida could be high so thank you very much.
Mr. Fortenberry. Yeah.
Mr. Bishop. The subcommittee will stand in recess subject
to the call of the chair as we wait for Mr. Davis. We have been
running ahead of schedule today. We have had several members
who were not able to attend because of today being a primary
day in their respective states and so some of the members had
to cancel their appearances. And so we have moved ahead of
schedule.
But we await the arrival of Mr. Davis and stand in recess.
[Recess.]
Mr. Bishop.
The subcommittee is now called to order. We are happy to
welcome Mr. Rodney Davis from Illinois to let us hear from him
with respect to our 2021 Appropriations Bill.
Mr. Davis, you are recognized for five minutes for whatever
comments you care to make, and we will certainly take your
testimony and make it a part of the record.
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Tuesday, March 3, 2020.
WITNESS
HON. RODNEY DAVIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
ILLINOIS
Mr. Davis. Well, Mr. Chairman, Mr. Ranking Member, thank
you both for allowing me the opportunity to testify. I
apologize for a little delinquency in getting here. I seem to
have had a bleeding finger that would not stop. So I got that
taken care of, and I am a little bit late, but I really
appreciate the opportunity to testify before both of you today.
I am here to speak in support of increased funding for
agricultural research for the National Institute of Food and
Agriculture's Agriculture and Food Research Initiatives, NIFA's
AFRI program.
AFRI provides grants to research institutions of all types,
including land-grant universities, public non-land grant
universities, private colleges and universities, private
research foundations and industry for the purpose of research
education and extension programs. The goal of these grants is
to help increase food production, enhance food production,
safety and nutrition, mitigate the impacts of changing
climates, improve rural economies, and train our next-
generation workforce.
I have been a relentless advocate for this program
alongside one of my good friends, Jimmy Panetta. Together, we
worked to establish the Agriculture Research Caucus to raise
awareness and garner support for research, development, and
innovation in agriculture. We represent vastly different
agricultural districts, but be both recognize that research for
the specialty crops he represents and the row crops that I
represent bolsters our ag economy, and that is a benefit to all
of us.
The committee and the House as a whole has consistently
signaled strong bipartisan support for agriculture research.
Last year, we successfully increased appropriations by $45
million over fiscal year 2019 levels to 460 million for NIFA's
AFRI program in our House-passed Fiscal Year 2020 bill. The
enacted level for AFRI was 425 million for Fiscal Year 2020, a
$10 million increase over the previous year.
Additionally, the 2018 Farm Bill established an important
pilot program called the Agriculture Advanced Research and
Development Authority, AGARDA, designed to solicit solutions to
the challenges we face in ag through high-risk, high-reward
research. This program is designed to target research areas
that industry might not be able to address because of
uncertainty or cost and bring to market solutions--bring to
market some solutions that will increase production,
sustainability, and competitiveness.
The return on investment and agricultural research is 20 to
60 percent. However, it accounts for just 2 percent of our
federal research dollars. This important research improves the
quality of our daily lives, and we must invest more to prepare
and innovate for the future and stay competitive in food and
agriculture globally.
I respectfully request that the committee continue to
prioritize and advocate for increased funding for NIFA's AFRI
program in a final spending package and provide initial funding
for the new and innovative approach to ag research, AGARDA.
Thank you for your continued work, both to the chair and to the
ranking member and to your Ag Approps team to support ag
research. And I yield back the balance of my time.
Mr. Bishop. Thank you very much, Mr. Davis. Let me assure
you that the subcommittee agrees with you, the value of
agriculture research. I continue to say that American
agriculture is the best in the industrialized world, that we do
continue to produce the highest quality, the safest, and most
abundant and the most economical food and fiber anywhere in the
industrialized world. And it is because of our superior
research.
We had some misgivings about the reorganization of NIFA and
ERS earlier in this Congress. But we continue to push for
adequate funding for research and, of course, you are here
advocating for that, and we fully support that. Our only
challenge is being able to have the available resources
allotted to our subcommittee in our allocation to be able to
provide the necessary funding to achieve these objectives. So
thank you very much for your request. Thank you for your
testimony, and we certainly will do everything that we can to
try to make sure that agriculture research is adequately
funding to meet the needs of our country to keep our
agriculture competitive globally.
Mr. Fortenberry. Chairman, can I make a comment?
Mr. Bishop. You may. Recognize Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman. I appreciate your
comments as well as Representative Davis. I just left State and
Foreign Operations. I am not the ranking member there, but I
sit on the committee. And Mark Green, the administrator, United
States Agency for International Development, is there. And the
first question I asked started with a comment saying food
security is foundational to stability and human flourishing.
And because we have been so extraordinarily successful in
the United States due to basically three factors, the
stewardship of our farmers and ranchers, credible resource
capacity, as well as public policies that have underwritten
stabilization, partly through research, partly through support
programs as well as addressing those who have food insecurity
problems has led, as the chairman said, to us being so
extraordinarily productive, having the lowest food prices in
the world and basically we look at our trade imbalances.
It would be so much worse if we didn't have agriculture
with a huge contribution to exports. In addition to that, we
export expertise. We export technology. We export the human
capacity, the charity, if you will, to help other people
struggling to build out their own systems for, again, human
flourishing. So you rightly point out the role that research
plays as, again, a foundational part of this piece. And we
overlook it because we have been so good at it. So I want to
thank you for coming today.
Mr. Davis. Thank you, Mr. Ranking Member. If you don't mind
me, you know, kind of responding to what you said, I am glad
the discussion in State and Foreign Ops was on food security
because, as we know, the stable governing bodies in developing
nations all will have a stable and great access to a food and
fiber supply that Chairman Bishop talked about.
And the key to that process and us allowing to develop
better foreign relations with developing nations is to export
the ag research that we are able to invest in here in this
country. And I look forward to working with you both. I thank
you both for your consideration and also your leadership on
this issue. Both of you have been leaders when it comes to ag
research. And I look forward to working as a part of your team
this year throughout the appropriations process.
Mr. Bishop. Thank you very much, Mr. Davis. And at this
time, I would like to thank all of the members again for
testifying before our subcommittee today. We appreciate their
coming out and taking time to talk to us about their projects
and programs and the issues that are important to their
constituents. The input will be vital as we move forward in the
2021 appropriations process. At this time, I will recognize Mr.
Fortenberry for any comments that he would like to make before
we close.
Mr. Fortenberry. No, Mr. Chairman, I think this was a
productive conversation today. Appreciate your leadership.
Mr. Bishop. Thank you very much, Mr. Fortenberry. For
members who were not able to attend the hearing to testify in
person, if you wish to submit written testimony, please do so
by the end of the day today. The entire testimony will be
included in the record. With that, the subcommittee is
adjourned.
Tuesday, March 10, 2020.
UNITED STATES DEPARTMENT OF AGRICULTURE
WITNESS
HON. SONNY PERDUE, SECRETARY, UNITED STATES DEPARTMENT OF AGRICULTURE
Mr. Bishop. The subcommittee will come to order.
Good morning, and welcome to today's hearing on the
Department of Agriculture's fiscal year 2021 budget.
I am pleased to introduce our witness, Secretary Perdue.
The Secretary and I have a decade-long relationship, and we
share deep passions of our farming and our ranchers and our
rural communities. And it has been a pleasure to work
collaboratively with him over the last 3 years.
I also wanted to welcome Dr. Rob Johansson, USDA's Chief
Economist, and Ms. Erica Navarro, the Budget Officer, to the
hearing.
Thank you for coming today.
Over the past few years, natural disasters, trade
uncertainty, and increasing levels of farm debt and
bankruptcies have led to increasing stress and anxiety in the
agriculture community. And I want to thank the Secretary and
all of USDA's employees who have helped our farmers navigate
these very, very difficult and tough times.
Despite the likelihood that these challenges will continue
for some time, however, the administration has put forth a
budget that appears to be grossly inadequate, as it has every
year during its time in office.
This year USDA's budget request is $16.4 billion, which is
a reduction of three and a half billion dollars, or 18 percent,
in discretionary funding from the final fiscal year 2020 bill.
I continue to believe that many proposals in the budget are
bad for our farmers, bad for our rural communities, bad for our
vulnerable populations, and quite honestly, should be dead on
arrival.
Any budget has a statement of values and priorities, and it
has been clear for three years now that the administration
wants to dismantle some critical programs. Fortunately, the
Constitution gives Congress the power of the purse.
As in years past, we will not entertain the elimination of
programs such as Food for Peace, McGovern-Dole, the Commodity
Supplemental Food Program, some of EBT, and nearly all of the
Rural Housing Loan and Grant Programs.
We will also not entertain many of the proposed policy
changes, especially those which restrict SNAP benefits or
overhaul crop insurance in our conservation programs.
I was disappointed but not entirely surprised to see the
department is once again proposing a Harvest Box idea under
which SNAP recipients would get part of their benefits this
year as a box of food rather than through SNAP monetary
benefits. Sadly, this mirrors actions on the administrative
side.
When met with resistance during the 2018 farm bill debate
on the Able-bodied Adults Without Dependents, broad-based
categorical eligibility, and the standard utility and allowance
proposals, the administration moved forward with executive
rulemaking.
I worry that these rules disproportionately impact working
families with children trying to climb out of poverty.
The U.S. Census Bureau reported that in 2017, SNAP lifted
3.4 million people, including one and a half million children
out of poverty. The economy is still not working for everyone,
and the administration should not make it worse by decimating
one of the most effective safety net programs.
Now, Mr. Secretary, yesterday, ahead of your testimony, I
know it was late, and I trust that you may have seen it.
Congresswoman Rosa DeLauro and I sent a letter to you on the
Department of Agriculture programs and urged you to take some
decisive actions to ensure program access.
As you are very well aware, under the exigencies of the
coronavirus, COVID-19, States and localities are beginning to
employ social distancing strategies as a means of containing
the virus. For some this has meant temporary school closures,
and that jeopardizes access to school meals for students,
including the nearly 22 million children who rely on free and
reduced school lunches.
And while we applaud USDA's recent efforts to accommodate
the schools in California and in Washington State, we believe
that more can be done, such as waiving the congregate meal
requirement for schools outside of area eligibility.
And we feel like the Department of Agriculture should
immediately start working with the Department of Education, if
you have not already, to provide States with the resources and
the guidance to develop plans that will detail how students
will receive access to child nutrition programs before a school
shuts down.
Furthermore, with regard to SNAP, we would like to urge you
to immediately suspend any department rulemaking that would
reduce benefits or affect program eligibility. Enacting changes
at this time would really exacerbate the current economic
anxiety, and it would unnecessarily increase the burden on the
very people who need and will need this assistance.
I believe that as considerations of a broader economic
stimulus package progress, and there is discussion about that,
that we need to consider expanding the SNAP benefit, which we
believe will be a vital anti-recession tool just as it was
included in the temporary benefit boost when we did the
American Recovery and Reinvestment Act in 2009.
We look forward to hearing your comments on that, and of
course, in the very near future getting some specifics as to
how the department will work through these programs.
I am disappointed to see that rural broadband funding was
cut in your budget by $350 million. It is a program with
bipartisan and bicameral support. As chairman, I have made
rural development a priority.
We know that access to adequate broadband in a key
ingredient for success, and yet too many communities feel left
behind, unable to connect their businesses, their families, and
their schools to the modern world.
In the coming weeks, several of the mission areas,
including the farm production and conservation, rural
development and food nutrition service are coming to testify
about their specific requests. We will dive deeper into their
specific requests, and I pledge to do my very best to work with
you and our Ranking Member Fortenberry and our subcommittee to
develop a bill that addresses the needs of all of those who
depend on the USDA.
Mr. Secretary, I want to thank you for being with us today,
and I look forward to today's discussion, and I certainly want
to let you know that this subcommittee and this Congress wants
you and the department and all of us to do right and feed
everybody.
With that, I would like to note that our distinguished
ranking member, Mr. Fortenberry, is unable to join us this
morning. He contacted me yesterday and felt that it was
appropriate for him to remain home for the time being, and he
assured me that he would be well represented, and just like
Hallmark, he cared enough to send the best. [Laughter.]
Mr. Bishop. And at this time I would like to ask Mr.
Aderholt, the former chairman of this subcommittee, for his
opening remarks.
Mr. Aderholt. Thank you, Mr. Chairman.
And it is good to be here. I regret Ranking Member
Fortenberry is not feeling well, but we wish him the best.
I am sorry I was a little bit late. I was actually in a
briefing with former, and all of our friend, former FDA
Commissioner Gottlieb who was giving a briefing on the topic of
the day, the coronavirus, and so I was trying to get a little
bit of an update from him. So I apologize for coming in late.
But I am glad to be here this morning and glad to be here
with the Secretary, Ms. Navarro, and with Dr. Johansson. Thank
you all for being here and thank you for the job that you are
all doing at USDA.
You all know firsthand how important agriculture is to my
State of Alabama where one in five jobs is related to
agriculture or forestry, and agriculture is not only a part of
our past and our present, but it will be very much part of our
future. And I can say that for all Americans.
Before we dive into the budget request, I want to commend
you, Secretary Perdue, for your leadership and achievements
over the past 3 years. I was just thinking it is hard to
believe it has been 3 years that you have been on the job.
I remember when you first started on the job, and it is
amazing how time quickly flies, but due to your department's
efforts across the vast responsibilities that you have at USDA
and all of your employees have, you have touched the lives of
hundreds of millions of people in the U.S. and abroad in one
way or the other.
In particular, I want to express my appreciation for what
you and your staff have done and we will continue to do on
building infrastructure in rural economies across this Nation.
You, of course, traveled to the district that I represent
last year, and I appreciate you taking time out of your
schedule to travel to Northwest Alabama.
But your staff traveled to the district I represent at just
the end of last year and awarded a loan and a grant as part of
a first round of the Reconnect Program, and this funding will
support actually 8,000 rural households. It will support 57
farms, 44 businesses, 17 educational facilities, 14 critical
community facilities, and three healthcare facilities in rural
Alabama.
As USDA rolls out the second and the third round of this
loan and grant program totaling $1.7 billion, the department
will help to close the digital divide between the rural and
non-rural communities across the country.
I hope that we can continue to build upon this progress we
have made today with high-speed broadband infrastructure, as
well as other infrastructure needs, such as the installment or
repairing of drinking water and wastewater systems in our rural
communities.
On the matter of school nutrition, I do want to express my
appreciation for your providing the flexibility. Just this
morning I was meeting with one of my constituents, who is a
school nutrition worker, and I asked her in particular about
the flexibility, and she was very pleased with that, and that
is coming from the grassroots, from someone who is in that on a
day-by-day basis.
So your most recent actions are consistent with the
language that we have included in the appropriation bills and
reports, and as you likely know, the local school districts are
on the front lines, as I mentioned to the lady I spoke to this
morning, and they are making sure that our children get the
healthy, get the wholesome meals they need, and that they reach
out to many of us and ask for that flexibility.
And I am glad that we can work together and try to provide
some flexibility because it is working, according to the people
who are on the ground.
As it relates to the President's budget submission, I want
to continue my support for the funding request that will
provide greater customer service to farmers and ranchers that
are actually in the field, whether that be technology
information needs or requests for staff support and recovery
jump teams to assist producers affected by disasters.
However, I do want to voice my concern over the major
changes that are proposed to crop insurance and other safety
net programs. Farmers continue to experience very challenging
times in this day and age with decreasing crop prices and a
number of natural disasters.
So your support for American farmers and ranchers is
greatly appreciated. We look forward to working with you on
this subcommittee as we try to look at a number of key funding
decisions that are necessary to make sure that we have the
strongest farm economy in the entire world.
So I thank you. It is good to be back here today and to
have you here before our committee, as well as you, Dr.
Johansson and Ms. Navarro. Thanks for being here.
And I yield back.
Mr. Bishop. Thank you very much, Mr. Aderholt.
Secretary Perdue, without objection your entire written
testimony will be included in the record, and I will recognize
you now for your statement, and then we will proceed with
questions.
Secretary Perdue. Thank you, Chairman Bishop and
Congressman Aderholt.
If Congressman Aderholt thinks 3 years travels fast, what
does he think about 3 decades when our relationship began,
Chairman, in the Georgia State senate? So 30 years passes
pretty quickly as well.
But it is good to see you in this position, and we
appreciate your service.
And I did receive your letter. It is not in my prepared
remarks, but I look forward to addressing those issues in the
question and answer period of time over the waivers that we
have authority to do and a need that we may need some help in
that regard.
You know, it may come as a surprise to the committee, but I
actually sort of enjoy these kinds of hearings because as a
true believer in the three branches of government, I think this
is the way representative government should work.
You all have constituents that contact you all, and they
expect answers, and we are the implementers of a policy you
create through laws and bills, and it is appropriate for us to
be held accountable for how we are doing our job.
So I look forward to the questions actually. I will confess
now though having been a governor and created budgets for the
general assembly, you do know that the executive branch
sometimes eliminates things that they know that the legislative
branch, the keepers of the purse, will fulfill.
And so I have been guilty of that myself, and I thought you
were going to brag on us this year because I thought OMB and we
had gotten a lot closer this year than we have in the last
couple of years in that regard, but I know that there are some
things of interest that we all will talk about today.
But I think we in the farm community are glad to have 2019
in the books, behind us in the rear view mirror. It was a tough
year. We all know that, but I want to tell you that the safety
nets that you all create generally through the farm bill and
the ad hoc disaster programs have benefitted farmers and
ranchers all across this country in a wonderful way, and they
are very grateful for that in that way.
I think, again, just those standing disaster programs
provided $690 million in assistance, and then you all provided
another 4.5 for ad hoc disaster and WHIP-plus for 2018 and 2019
losses.
And then we had the Crop Insurance Indemnity Program, which
brought us almost over $9 billion, and then the President, at
his direction, on top of the $12 billion from 2018 in trade
assistance, it was $16 billion in farmers unfairly harmed by
the retaliatory tariffs in the way as well.
But in spite of that, as you all know, you know. You are in
a farming district, Chairman, and you know that farmers are
resilient, and even in spite of 2019 and hurricanes and all of
those things, they are optimists, and I am grateful to them.
We have got a great story in agriculture to tell. They are
the most resilient people that I have ever met, but as I said,
we are glad 2019 is in the books, and it is going to give us
2020, which is here, a new decade, and a new reason for more
optimism.
And we are optimistic. In our Ag. Outlook Forum, we talked
about technologies and the things, an ag. innovation agenda
that we look forward to. We do believe that new trade deals and
strong consumer demand in the United States abroad are a signal
for brighter days ahead once we get past this outbreak of
coronavirus.
Speaking of trade, obviously the phase one agreement with
China, the USMCA, Japan, the new deal with South Korea, in
addition to many other specific commodity wins, and what
Ambassador Lighthizer calls singles, smaller deals in other
countries, all will benefit, I think, from a demand perspective
going forward.
I think obviously the year round E15 for domestic
production of conventional ethanol will help as well, and then
last week you may be aware that we, as part of President
Trump's key promise to promote biofuels, we announced again the
Higher Blends Infrastructure Incentive Program. It is $100
million in grants to retailers to help provide more access to
consumers.
We believe when consumers have access, they are going to
make a smart choice with higher octane, better air quality, and
lower price fuel.
So you mentioned rural development. That is an important
part. We have been working across the sector in rural
development, increased rural prosperity. I think, again, as was
mentioned by Congressman Aderholt, these reconnect programs
have been well received, as you know in Georgia and many other
States.
We go and I think we had applications from 38 States in the
first round. We utilized that appropriations you gave us in a
leveraged kind of way to increase more than just the $600
million investment through 200 in grants, 200 in loan grant,
and 200 in loans out there.
We optimized that 600 million into more than that from an
investment standpoint in the broadband, which is absolutely
truly transformative. When you go to homes and farmsteads with
kids trying to do their homework and not even cell service to
fiber to the home, it is just unbelievable the transformation
that can take place in that family.
You talk about rural people and kids leaving the farm. This
is going to help bright young people stay on the farm whether
they are farming or jobs they can work for with connectivity in
those farms. It will help to stop the brain drain in that way.
It was by our count on the appropriations that you gave us
in the first round, it is going to change the lives of 431,000
rural Americans, and we have got a lot more to go. But we are
beginning to tell the success story of American agriculture as
well because we think it is a good one.
The miracle of American agriculture over the last 75, 100
years has been amazing in feeding this country and the world to
a large degree for several generations.
I visited with Ms. Pingree earlier this morning about the
ag. innovation agenda and her interest in some of those issues
that will align with what we are talking about, best aligning
our programs and research to provide farmers the tools they
need to innovate and be successful in that way.
So the kind of specific goals, we talked about a
scoreboard. We are going to measure these sorts of things to
increase production by reducing environment footprint,
production by 40 percent by cutting the footprint in half by
2050.
Those are good reach goals, but we think we can get there
based on the technology that is available to us.
So as you know, our colleague and another member that we
have three decades' experience was very instrumental in our
HBCU 1890 scholarship, and we are delighted to have those
moving along, and that is going to provide scholarships at HBCU
universities out here and really prepare kids for a great
education in these schools that will do better.
So this is one of the reasons we are excited about the
future in that regard. So while it has been an anxious but
productive year among that Nation's farmers, ranchers, and
producers, I am obviously here today to present the
administration's budget for the department, and we are proud of
the new loan program, $79 million to fully support $8.9 billion
demand for farm loans.
You mentioned there is more demand here. Working capital is
down over a period of years, and with these loans it is
estimated 35,000 farmers and ranchers will be helped. And I
think that supports that foundational principle of access to
wholesome and healthy foods.
The good news also, it includes funding to fully support
over 8,700 food safety inspection personnel who will ensure the
safety of meat and poultry and egg products at over 6,400
processing, slaughter, and import establishments there.
Two hundred million dollars to reduce trade barriers that
disadvantage ag. exports, open new markets; $100 million for
grants and incentives to promote domestic ethanol and
biodiesel, as we indicated; and we did put $250 million in
there for a fourth round of Reconnect.
I hope what we have demonstrated already that as we
continue to use the $1.1 billion that you all have done in two
tranches, applications are opening now. They will close March
16th, and we believe we will be oversubscribed again with these
rounds as well, and we are going to get those out as quickly as
possible.
We have got the foundation of the applications set up, and
I think some of the flexibilities you all gave us in the census
of where this underserved definition was will help us in going
forward in that way.
Also the rural development will support billions of dollars
for rural electric improvements, water, wastewater
improvements, community facility loans, rural housing loans,
and business and industry.
So in the face of the growing debt, I think the President
has done his best to offer a fiscally responsible budget that
does not try to kick this can down the road, but we need to get
a handle on it, and we have got a budget that we can work with
while we are executing fiscal constraint.
Again, Mr. Chairman, along with your help, we are going to
continue to do our level best to do right and feed everyone,
and I want to thank you for the opportunity to being here
today, and I look forward to your questions in an honest and
transparent way.
Mr. Bishop. Thank you very much, Mr. Secretary.
And let me take this opportunity to thank you and all of
the employees at USDA for the way that you have implemented the
disaster relief package that the Congress passed, $3 billion
for impacted communities that were affected by the natural
disasters over the last couple of years, as well as the block
grants.
And in behalf of all of the impacted communities in Georgia
and the impacted States and territories, I just want to extend
my heartfelt gratitude for your efforts in that regard.
Now I would kind of like to get to the issue of the day,
which is the coronavirus, COVID-19. Let me just read for you
briefly a statement that went out from the Food Research and
Action Center to its membership regarding the COVID-19
challenges.
And I quote, ``The COVID-19 virus that threatens negative
impacts on public health and the American economy presents
particular challenges for low income people. Social distancing
strategies reduce the chances of human-to-human contact. They
could entail families stockpiling food and other supplies, sick
workers without paid leave directed to stay home, and schools
closing for periods of time. Administrators and legislators
should consider, one, adopting disaster SNAP and disaster
provisions of other Federal nutrition programs to provide
nutrition resources for low income consumers who lack resources
to stockpile food and to make up for disrupted school meal
service; and, two, suspending implementation of rules changes
that weaken SNAP benefits and enrollment; and, three,
increasing SNAP benefit amounts to bolster the programs'
countercyclical impacts.''
Now, obviously, we are all concerned about the ongoing
coronavirus outbreak. Given how broadly USDA touches all
Americans' lives, we want to make sure that you are prepared to
respond to the outbreak and that you have adequate funding and
legislative authority to take whatever steps that you deem
necessary.
Can you let us know what USDA has been doing in response to
the outbreak and whether you anticipate any need for additional
funds or authorities?
And amid the outbreak, I am glad that USDA approved the
waivers from Washington and California to ensure that children
can still receive school meals even if the school is closed.
But it does seem that school closures will continue to tick up.
Have any other States submitted similar waivers?
And are you considering issuing a nationwide waiver?
Secretary Perdue. That is a good question, Mr. Chairman. I
want to tell you this is a time we all need to pull together
and put any kind of bipartisanship aside and do what we need to
do for our people. And I think that is your goal and that is my
goal as well at USDA.
We did issue waivers both to the two States that you
mentioned, as well as Alaska, but even more than that, what we
told people, statutorily our legal counsel tells us that we
have to be asked in that way.
What we have done because we have to be asked is we have
sent the message to all of the States that they can
preemptively assume a positive response once they ask and once
the waiver request comes in.
Certainly when schools close it does not make sense to have
to go to the waiver or the congregate feeding areas because
that is the purpose of closing schools. So we are waiving the
congregate feeding activity certainly in those low-income
areas.
We do not believe we have the legal and statutory authority
to do that in all areas of non-low income, and that is
something we need to look at together. We are pretty sure we do
not have to do that.
While we would love to do that, you know three years from
now there would be an OIG report saying we violated the law,
and you know how that goes.
So we are trying to do everything we can statutorily to do
that. Back in the H1N1, you may remember. You were here. You
may remember that you all authorized kind of P-SNAP, which was
a pandemic SNAP. It was authorized for one year. I am not sure
it was ever really funded or utilized, but that may be
something you may want to consider as well that we look at here
now.
Mr. Bishop. Let us look at that together.
In my opening statement I noted how worried I am of the
SNAP rules----
Secretary Perdue. Right.
Mr. Bishop [continuing]. Disproportionately impacting the
working poor, and the Able-bodied Adults Without Dependents
Rule is set to go into effect in three weeks, and it will take
SNAP away from 700,000 people.
If those folks have to self-quarantine for 2 weeks, they
will not meet the requirement of the 20 hours per week work,
and they will be required to produce documents to be excused.
That will be creating some pretty challenging administrative
burdens.
So to go forward with the rule administratively, it seems
like, especially at this time when we are talking about
economic stimulus and relief, it seems particularly cruel.
Do you think it is a good idea to implement and to issue
the final SNAP rules during this outbreak when so many people,
especially the working poor, will need assistance?
Secretary Perdue. Mr. Chairman, I think I have got some
good news for that situation as well. There are longstanding
SNAP regulations that call for good cause, and States have the
discretion to determine good cause.
Obviously, if your job says you cannot come to work or you
are sick in that way, that good cause would eliminate the need
for work requirements under this rule. So that will be under
the discretion of the States to determine that good cause.
It is already there, and we would not have to do anything
different that way, other than those folks that are impacted by
the coronavirus either through their jobs, their own health,
would be fulfilling those work requirements.
Mr. Bishop. Thank you, Mr. Secretary.
My time has expired. So I will at this time be happy to
recognize Mr. Moolenaar for such questions as he might have.
Mr. Moolenaar. Thank you, Mr. Chairman.
And, Mr. Secretary, good to see you again, and thank you
for coming to Michigan recently. We appreciated your visit and
the work you are doing on some of the trade agreements and how
that is opening up new markets for agriculture products.
I wondered if we could just take a step back a minute. I
know you are kind of focused on the upcoming budget, but if you
had to look at sort of the bigger picture funding needs for
agriculture right in the short term as well as kind of the
long-term priorities, are there things that are right at the
top of your mind?
Secretary Perdue. As I mentioned earlier in my opening
remarks, I feel like you all have done a great job with the
farm bill, additional loan eligibility, loan volume, and loan
sizes there for farmers.
Many farmers that have never had to come to USDA, we see
them now. You all have appropriated that. The farm safety net
that you all created I thought demonstrated this year in 2019,
with a lot of weather challenges, that it works, both crop
insurance, both indemnities, both ad hoc disaster program, as
well as the other safety nets in NRCS and FSA.
So I think from that perspective, one of the things we
talked about is the Reconnect Program. I think that is a
transformative type of thing in rural communities. We hope we
have implemented that in a way that really would trust you all
to allow us to continue and do even more as we go forward.
In combining, I know that the President's budget has more
money in FCC. We think in these rural areas the difference that
we are making is incredible.
So I think from that perspective, obviously, farmers have
been mentioning another MFP payment. I am telling them that the
MFP was not a price support payment. It was a trade retaliation
issue, and if trade picks up, and right now China is doing
those things that seem to be getting prepared, but coronavirus
has those actual trade disruptions.
So if we see trade getting back and we do not see prices
improving, that is an indication we have got a supply-demand
equivalence issue.
Mr. Moolenaar. Okay. Thank you.
Just along the lines of trade, and you mentioned China and
the phase one agreement there, and of course, we were excited
about, you know, pork, soybeans, specialty crops like tart
cherries, opportunities perhaps there, but for the coronavirus.
I wanted to specifically, and you and I talked briefly
about the tart cherry situation with Turkey, and we appreciate
you have been doing some help for our cherry growers, but is
there more that can be done to assist in this area?
Secretary Perdue. I think, again, your tart cherry people
have been good customers of the Section 32 Program, as you may
know, over a number of years, and we are continuing to purchase
tart cherries to pass along to food banks and other poor that
need it in that way.
Most of the challenge right now, I think, is coming from
the Turkey imports, and there has been some investigation of
whether that could really rise to the level of an anti-dumping
situation that way.
Congress makes that determination. I think the industry
would have to bring those allegations, and it would be
investigated whether we could bring an action against Turkey
for dumping over less than the cost, in that regard.
That seems to be where most of the pressure is on the tart
cherry growers.
Mr. Moolenaar. And then the chairman had talked with you
about coronavirus. One of the questions people have about the
safety of our food supply, do we have any information to
believe that the coronavirus can survive in our food supply or
at least as it relates to meat and poultry plants?
Secretary Perdue. I appreciate that question. Absolutely
not. There is no evidence that it is a food-borne transmissible
illness, such as Salmonella or E. coli, those sorts of things.
It really depends just on safe hygiene. You do not want to be
eating with someone that sneezes on your chicken and you eat
it, but nonetheless, it is not a food-borne illness as we would
think of.
Mr. Moolenaar. Okay. And then when Chairman Glen Smith of
the Farm Credit Administration appeared before this
subcommittee last month, he noted that the farm credit system
evaluates whether the lending institutions are serving all
eligible borrowers, including young, beginning, and small
farmers.
What do you see as some of the greatest hurdles for a young
or beginning farmer, and what can we do to assist?
Secretary Perdue. I think there are two things you have
already done. I think the CRP Program that was in the farm
bill, this last one, helps young farmers.
There have been a lot of complaints about the riches of the
program. People were using it as a retirement, taking land out
of production where it was not available to young farmers.
What you all did there helps in that regard, and also the
loan guaranty program that you do there, helping us to work
with the farm credit system community banks in a guaranty
basis. They provide the boots on the ground, traditional
banking underwriting from knowing that customers, and the USDA
through your appropriations provides the funding on a 90-10
basis.
And that is a great program. We expect to see more of those
guaranteed loans moving forward. It is a great public-private
partnership that works using the resources you appropriate and
leveraging that amount through the private sector and them
doing the underwriting.
Mr. Moolenaar. Thank you, Mr. Secretary.
Mr. Chairman, I yield back. Thank you.
Mr. Bishop. Thank you, Mr. Moolenaar.
At this time I am pleased to recognize the gentlelady, Ms.
Pingree.
Ms. Pingree. Thank you very much, Mr. Chair.
And thank you, Mr. Secretary. I feel very privileged. I
have been able to see you at the Agriculture Committee, meet
with you in my office, and see you again here. It is kind of
like All Secretary Perdue all the time. It is great.
And I love the opportunity to talk about these issues with
you. So thank you and to your team for being with us today.
The first thing I would ask the chair, Representative
McCollum was not able to be in the committee today, and she
asked me to submit this question for the record.
Mr. Bishop. Without objection, it is submitted.
Ms. Pingree. I did not think you would object.
So just a little bit more. You have given us a lot of
background on the coronavirus and school meals, and obviously
you are hearing a lot about that because it is a big area of
concern.
And I can tell that the department has been thinking that
through. So I just want to follow up on a couple of questions.
I guess what you were saying earlier was on the waiver, you
cannot sort of pre-agree to take in all the waivers. You have
just said to people generally, ``We are likely to approve it.
Submit your request to us.''
Secretary Perdue. Yes. The way we understand the statute,
we have to be asked. What we are saying there is if you ask, we
are going to say yes on the waiver to congregate feeding. So
that is the opportunity there.
We are essentially saying we just have to fulfill the
statute by being asked, but the answer is yes.
Ms. Pingree. And how many requests? I know you said there
were three that you granted, which is great. Thank you for
working on those, but how many requests do you have in right
now?
Secretary Perdue. I think we have some from Utah. They are
kind of coming in as they go, and this, again, is a waiver for
when schools are closed. The waiver is actually for a
requirement when typically you have to have congregate feeding,
which defeats the purpose of social distancing and the
coronavirus. That is what we are actually waiving.
So we have done California, Washington, Alaska, and I think
we have some requests in from Utah now. There may be more this
morning. I have not checked.
Ms. Pingree. Yes. I think Maine has either requested or is
requesting, although we have been fortunate and have not had as
much of a challenge yet.
Secretary Perdue. Right, right.
Ms. Pingree. I mean, one question I had was if there is a
presidential declaration of an emergency, do you still have to
go through the waiver request?
Secretary Perdue. We do.
Ms. Pingree. You do. And I guess another concern that you
addressed briefly was on the districts that do not qualify 50
percent of free and reduced lunch. So you may have a district
that overall is, you know, not meeting the target, but has
pockets of schools.
Secretary Perdue. That is right.
Ms. Pingree. Do you need some authority from us? What were
you saying on that?
Secretary Perdue. Well, it would be helpful to have blanket
authority, but what we are doing, like the summer feeding
program, there is an open. In the low-income area, there is an
open where everybody can come, and there are also closed
systems where the groups know the students who are eligible to
do that, and they come.
Take, for instance, in a non-low income, you have got some
low-income students there. So they are eligible. They just have
to come and identify themselves, and they have to be able to be
fed as well.
In a low-income area, an open congregate area there where
they come and pick up food, anyone can come in that area and do
that.
Ms. Pingree. Got it.
Secretary Perdue. It is a little awkward for the low income
and others, but that is the way the statute is. You know, if we
had more flexibility, we could be more open in the others.
Ms. Pingree. I am sure that you would receive all the
support you wanted from this committee and others who are
concerned about it.
You also mentioned the P-SNAP program, which has not
apparently been used much. Are there barriers right now to that
being implemented?
That seems like it was kind of tailor made for what we are
going through now, and it has not come up.
Secretary Perdue. It has expired. It would require a
reauthorization. It expired. I think it was a year that way.
Ms. Pingree. Got it. Okay.
You know, we are all kind of trying to think ahead about
what has happened, what the challenges are, but what are you
worried about at the USDA about the impacts of coronavirus and
things that we may not be even considering yet?
Secretary Perdue. Well, I think internally and externally
we have over 100,000 people scattered around the country and
others. We had some requests for teleworking in Seattle, which
we granted. We had some in a Forest Service. It was 50 miles
away with no outbreak, and we said just sit back and relax a
little bit.
But we have issued guidance to our employees on the
internal side about just, first of all, all of the basic kind
of things of what to do.
We are refreshing, obviously, our pandemic plan. We are
testing our systems over telecommuting to see the stress
testing then to see if they are up to speed. Our IT person
feels that they are, but we want to check those out to make
sure if we have to utilize those.
That is internal operation because, as you all know, we
have got a lot of people that depend on USDA on a daily basis,
from farmers and ranchers to consumers out here, and we have to
carry on the work.
So it is mostly being prepared. Our motto is be prepared,
not panicked, and doing that, and that is what we are trying to
do ahead of time.
You know, you always want to ask yourself is there
something we could have, should have, ought to have done that
we would have looked at in the last part, and that is really
where we have been in all of the guidance and recommendations
to our internal team.
Certainly trade is one of those components people ask a lot
about. What about the phase one deal? We understand just from a
physicality standpoint of people getting the work. This may be
influenced some, but the good news is from China, they are
still doing many of those non-tariff trade barrier types of
things.
They are dissolving those and resolving those point by
point, indicating to us there as full intention to try to
fulfill the hard number commitment they made, and that is going
very, very well in spite of the coronavirus.
Ms. Pingree. That is great.
Well, I am out of time, but thank you so much for your
answers. I appreciate that.
Mr. Bishop. Dr. Harris.
Mr. Harris. Thank you very much.
And good to see you again, Mr. Secretary.
You know, the competition is intense this morning. We have
CDC a couple of doors down, and they have got a little problem
on their hands.
Anyway, let me first talk to you about a very important
issue from my district, which is the USDA inspection for
catfish. Now, as you can appreciate, not all catfish is the
same. In the Chesapeake Bay, we have the blue catfish, which is
an invasive species.
And just two days ago I am told tales of, you know, people
catching these 60 pound catfish that are basically eating
things that are native to the Chesapeake Bay to the point
where, you know, we have spent a lot of Federal dollars to
build up our blue fish population, our crab population, and you
know, this could all be for naught because of the blue catfish.
Now, blue catfish tastes good, I am told. The trouble is
that, as you know, in 2017 they moved the inspection of catfish
processing from FDA to USDA, and the current USDA regulations
are just too onerous for our watermen to make a profit catching
these invasive species.
So the invasive species just keep on going on instead of
what would make a great idea, which is, oh, yes, let us
actually harvest them and kill two birds with one stone. We
produce a product, American made product, and, by the way, we
take care of this invasive species.
So I am going to ask you. Could the department, for
instance, under their rules and regulatory scheme, exclude
invasive species from the more onerous requirements of catfish
processing regulations?
Secretary Perdue. I am not aware that we could if they are
used as a food source. Obviously, we take food safety very,
very seriously, and if they are being consumed like pork and
beef and chicken, I do not know that we could do that legally
in that way.
I am more interested in really the onerous part of what you
are saying of why the watermen feel like it is overbearing in
that way, and let us resolve that issue first.
Mr. Harris. Sure. No, Mr. Secretary, you know, it is
simple. You require an inspector there at all times when these
boats come in. And you know the way watermen work. You know,
sometimes they will go out. They will come in in the evening,
and you cannot have an inspector there right at that moment.
So hopefully we can work together and maybe eliminate that
because this is a huge problem for the Chesapeake Bay. You
know, we have two bills before the Maryland legislature asking
Congress to please, you know, provide some relief because these
are invasive species.
So I would appreciate it. I would appreciate working with
you on it.
Just a couple of other things in my limited time. I think
that you are doing the right thing when you are looking at work
requirement for able-bodied adults under the SNAP program. I
know that the department comes under a lot of criticism for
looking at that policy or toward that policy, but I just think
it is the right thing to do.
I think my constituents believe that we are a generous
Nation. We do have a safety net, but this actually helps people
out of the safety net while providing them, you know, support
during that.
The other thing that I am very interested in, but I do not
think we are going to get off the ground, although we should,
is the Harvest Box program because I think, you know, the trend
in America right now, and I know because my daughters do it,
is, you know, you have got to have home delivery or easy pickup
of groceries, and to blend that with the availability of
providing more availability of nutritious products in food
deserts, this all comes together as you now encourage private
vendors to create these market boxes and actually deliver them
to places where you would have no access, no access to healthy
food.
So I think, again, that is a project that I certainly
advocate for, and that I hope, you know, we can move somewhere
along those lines because I actually think it greatly
improves--you know, it is a win-win. It is a win-win for our
farmers. It is a win for those areas, especially the food
deserts where we would be getting food there.
We potentially could get nutritious food there where it is
very difficult to get food.
Finally, one thing is that--and, again, we are talking, you
know, we are with the CDC for people over there two doors down,
but you know, that COVID-19 problem arose from animals. I mean,
that is a transmission from animals sold in a market to humans.
We do not have the equivalent here as a focus on how we
control diseases, and now that we appreciate that a lot of
these novel viruses are going to be mutations with a reservoir
and an animal source.
So we need an entity that thinks about this, that spends
all of its time thinking about this like we have the CDC
thinking about it for humans, how to prevent transmission
human-to-human.
How do we control these kinds of diseases in the animal
population?
Secretary Perdue. That is a great question, obviously. That
is really what our whole purpose of our food safety inspection
system is all about. If you wanted to create a market out here
and just sell bats, that is not appropriate, and you would be
stopped from that, and that is the good news about really the
protein aspect. FDA does it on the vegetables and other eggs
and things like that. We create the protein in the Food Safety
Inspection Service.
And certainly vigilance from a research perspective over
the zoonotic diseases is very, very important in that regard.
If I could go back to a couple of things you mentioned, we
tested in Texas for rural areas' delivery of food that way, and
it worked very, very well. I think if we could be permitted to
do something on a choice basis, to allow half of the food
stamps to be delivered to people, I believe there would be more
assumption in limited pilot projects over choice, if we gave
people the choice, not mandate it, but gave the choice. I think
we would see a lot of uptake there.
The other thing over the E&T and the ABAWD rules, I wish
you all could have gone with me to Baltimore the other day to
an education and training facility. It was just the most
amazing thing.
These were machinists. They were teaching unemployed people
how to code these machines there and welding techniques. We had
employers. We had participants. We had training. It was great,
and we are trying to replicate that system out here.
We have got an obligation to help people move that have not
been employed to move out, not just cut them off, but our goal
is to help move them, move them to sustainability.
Mr. Harris. I appreciate that. Thank you.
I yield back.
Mr. Bishop. Mr. Cuellar.
Mr. Cuellar. Thank you, Mr. Chairman.
Mr. Secretary, I appreciate what you and your men and women
do for the country and certainly what you all do in Texas.
I want to ask you a couple of questions that we have added
in the appropriations bill. One is section 741 that deals with
what we call the 10-20-30 program, that is, 10 percent of the
funding from, and there is a list of programs, will go to areas
that have had 20 percent of its population at the poverty level
for the last 30 years, something Clyburn and some of us have
been working on.
My concern is I have asked some of the folks in Texas, and
they are not familiar with the 10-20-30 program. This is not a
rider. It is actually a section. It is a bill.
So I would ask you all to please have your folks make sure
they comply with this part because I did ask some of my Texas
folks, and they had no idea about the 10-20-30 program, which
is one.
Second, another rider that we added has to do with SNAP,
the SNAP program, and how the Department of Agriculture and the
Department of Education, you all can work together and provide
outreach for eligible college students.
So I want to see what sort of plans on the rider that I
added, see what plan you all can do with the Department of
Education to reach out more to the college students to get that
type of assistance, and of course, the 10-20 program.
And then finally, actually I was going to ask two, but I
will ask one more. Fever ticks, through the help of the
chairman and the ranking member, I have been able to add money
for fever ticks.
And in Texas, as you know, and I have been there with prior
Secretaries; I have been with them as we dipped the cattle. The
quarantine has not gotten smaller. What worries me, the
quarantine area has grown, and as you know, the cattle industry
in Texas and other parts is very important.
If this will continue to spread, it would cause great
damage to our cattle industry.
So one is the 10-20-30 program. Two is how you all can help
us with college students so they can be eligible due to
outreach, and of course the fever tick situation.
And, again, I appreciate you have got some real good folks
down there in Texas, and I appreciate the good work that they
do.
Secretary Perdue. Thank you, Congressman.
Before I say anything, congratulations.
With the 10-20-30 program, it is a common program in rural
development. And it may not go by that name, but obviously a 10
percent set-aside for high poverty areas that have been there
for 20 percent poverty for 30 years. That is the 10-20-30
program that came.
And so that is fundamental in our rural development
program. If your folks are not aware of it or do not feel like
we are in compliance there, then we want to hear about that
because that is pretty standard operating procedure in rural
development programs.
And certainly from the food, SNAP program for college
students, we do not make a distinction whether they are in
school or not. They come in. They are on their own that way.
Then they are eligible. They qualify, and we go forward in that
way.
You know, if they are working, certainly, and probably not
making a wage that disqualifies them, then they are eligible to
do that.
Mr. Cuellar. Right, and as per the rider, if you all could
just work with the Department of Education and just do that
outreach, we would appreciate it.
And on the 10-20 also, it is not only the rural
development. I mean, there are like a whole bunch of programs
there that I certainly want to make sure we work with you all
on that.
Secretary Perdue. Okay.
Mr. Cuellar. Anything on fever ticks?
Secretary Perdue. Yes, sir. I have been in the area and
talked with ranchers, and most of the refuge down there mostly
is Department of the Interior land in that area.
We have got a problem. There are the carriers of Nilgai and
deer as well, and many of the ranchers do not want to do the
things that it takes down there to quarantine their animals in
that way, but we are working with them.
I met with them down there and felt like we are making
progress on it in that way. It is an important thing, and I
think we have got it stopped. We have not eliminated it yet,
and that is the goal.
The challenge, obviously, is that many of the pests come
across the border, and we are limited sometimes in the
provisions there.
Mr. Cuellar. Right, and that is what I was going to ask
you, is the language that I have added was to work with the
Mexican officials.
Secretary Perdue. Right.
Mr. Cuellar. Because you do have wildlife that crosses, and
we cannot dip ourselves out of problems, out of this particular
situation because it is not only the cattle, but it is the
wildlife.
Secretary Perdue. That is right.
Mr. Cuellar. So, again, I appreciate that you have got some
good folks.
I would ask you to also look at your tick riders because I
have got a lot of comments from our folks that we need to have
more of a presence there with the tick riders down there, what
we call tick riders there.
But anyway, you all do a good job, but I appreciate it. Any
way we can work together or try to get you extra resources, we
would love to work with you on this.
Secretary Perdue. Thank you, sir.
Mr. Cuellar. Thank you.
Mr. Bishop. Thank you, Mr. Cuellar.
Mr. Secretary, I am concerned about how your relocation of
ERS and NIFA is proceeding. As of the latest pay period, you
were short a total of 429 employees in Kansas City out of your
target of 576. That is about 75 percent short.
Because this has been such a, for lack of a better word, a
mess, you are backfilling ERS and NIFA in Washington with
retired staff, contractors, temporary staff, cooperative
agreements, and grants with universities and other groups.
They are doing the work of the permanent staff who left in
response to the move. We received other information from USDA
about the cost incurred in relation to the move that conflicts
with what we were told when the move was being planned.
By the way, we have asked questions about the cost of the
backfilling, and we have still not received answers.
Both agencies have hemorrhaged hundreds of years of
institutional knowledge, and the cancellations or delays of
future reports is inevitable.
Last week several of my House Agriculture Committee
authorizing colleagues expressed concern about delays that we
have been hearing about, some NIFA awards, especially the 1890
scholarship program.
The farm bill, which was passed over a year ago and the
funds still have not gone out the door. Timing is critical, and
as we move later in the year, the scholarship fund not being
delivered will impact the incoming class and the 1890's
abilities to attract the best and the brightest minds.
So I am afraid that the example of the 1890 Scholarship
program delays is the first signal of an oncoming wave of
program delays, missed deadlines, and report cancellations.
I think you stated to Representative Alma Adams that you
would specifically find out about the delay in delivering
funding awards with the 1890 Scholarship Program.
Can you share what you have learned since last week and why
there has been a delay of over a year?
And I had a meeting with a number of them last week also
who, when they found out that I would be entertaining you
today, asked me to please inquire on that. So I would like to
do that please, sir.
Secretary Perdue. Did you use the word ``entertaining''?
[Laughter.]
Mr. Bishop. I did actually.
Secretary Perdue. What I have learned since the question
the other day is where are we on that, and certainly the 1890
Program being a new program, some of the other delivery of
money at being obligated was obligated on time. The cycle of
one- and two-year programs in NIFA obviously go over a cycle,
and it goes all the way back to the shutdown of the mayor
putting us a month behind as we move forward. We are probably
another month behind. We expect all these obligations to be out
by March the 30th, and we prioritize the HBCU.
They have been notified they are going to get the money,
but you know, like a lot of people, and they want to see it in
hand, and we have not dispersed it yet, but they can plan for
these students, they can recruit these students coming in for
the fall is when it would be implemented, and we have notified
them of that.
Mr. Bishop. Yeah. Mr. Secretary, I am sure that you are
aware that these are some of the more delicate institutions,
the HBCUs and minority-serving institutions, and being able to
plan and to know exactly what cash they will have on hand will
certainly--is invaluable to them, and not being able to do that
puts them in great jeopardy. One, of being able to assure
students that they will be able to get in and have the
resources they need, and two, in just keeping their doors open
in many instances.
So, I would urge you, Mr. Secretary, to please, if, to the
extent that you can, try to expedite these funds, because they
are really sweating bullets, and they really, really are
concerned about having access to those dollars as soon as they
can possibly get them.
Secretary Perdue. Those were the written instructions we
gave to our folks this week.
Mr. Bishop. Thank you, Mr. Secretary. My time on this round
is just about over. So, at this point, let me recognize Mr.
Moolenaar.
Mr. Moolenaar. Thank you, Mr. Chairman. Just, Mr.
Secretary, I was hoping to follow up with you a little bit on
the tart cherries issue and, you know, in the first round, we
were discussing the pressure on the tart cherry industry, and
it comes from the what I would consider unfair trade practices
from Turkey, and my understanding is the--originally, the
International Trade Commission determined that counter-
available subsidies are being provided to producers and
exporters of dried tart cherries from Turkey.
The preliminary determination was an estimated counter-
available subsidy of 204.93 percent. The preliminary
determination of the estimated dumping margin was up to 648
percent, yet in January, the ITC determined that the tart
cherry industry is not materially injured or threatened with
material injury by reason of imports of dried cherries from
Turkey, and with that subsidy rate and the dumping margin, it
just seems to me that that--I don't understand how they came to
that conclusion, but my understanding is the investigation is
complete, and completed with a surprising end, and I just
wondered if there was anything we could do together to, you
know, help with these specialty crops that have been
disproportionately affected by these farm subsidies that the
ITC has failed to take action on, and wondered if you would
also be open to coming to mission and maybe touring a cherry
farm or other great specialty crop producers.
Secretary Perdue. I was surprised as well, Congressman, and
when we saw the initial percentages there, we thought we had a
win, and when the final adjudication was not, then I didn't
understand that. I think again from USDA, using the tools that
we have on Section 32 is really what we have available there
right now. We are open to other suggestions that you have, but
we are--as you well know, Michigan has a wide diversity of
specialty crops, and in that way, we addressed really some of
the sugar beet issues that were----
Mr. Moolenaar. Yes----
Secretary Perdue [continuing]. On this last year in that
way, but many others, but yes. I would--we look forward to
getting around in specifically these kind of areas, or having--
hosting them and telling us some of the challenges that they
face. Certainly, they feel like they have done in this case
what they needed to do. I don't know. I can't explain the
outcome.
Mr. Moolenaar. Okay. Thank you, and the other area I wanted
to just follow up with you on. We talked a little bit about the
ReConnect Rural Broadband Program, and you know, I appreciate
the work you are doing.
I know you have been making this a top priority as you
travel around the country, and I am just wondering what else
the federal government can do to address this divide between
rural and non-rural communities so that our rural communities
are not left behind? I think USDA is working on it. The federal
FCC is working on it. Are there other things we could be doing
to assist in this effort?
Secretary Perdue. I think again, all of us are working on
accurate mapping, which I think what you all did in the
flexibility on the latest rounds was we had been prohibited. If
two or three houses in a census track were served, they were
deemed unserved, or they were deemed to be served. Well, you
gave us a percentage of flexibility there.
I think again from maybe more flexibility and the
population there, and some of the flexibility of what it really
means on a location by location basis would help in that
regard, as well as the funding continuing, because we think
once we've got the foundation of these awards that are moving
very well, we and dealing with both telephone coops, electric
coops, and the private sector, we've seen all those come in.
Even communities have come in. So, I think if we just need to
continue to do more of it, our goal is to get this $1.1 billion
out as quickly as possible.
Mr. Moolenaar. All right, thank you. Thank you, Mr.
Chairman, and I yield back.
Mr. Bishop. Ms. Pingree.
Ms. Pingree. Thank you very much, Mr. Chair. I'm going to
take you on a whole different topic.
There has been a lot of attention to PFAS recently. I know
my colleague from Michigan has had a lot of issues in that
state, but we are hearing about it all over the country, and I
want to talk a little bit about the impact on our farmers.
Certainly, it is a touch time to be a dairy farmer, but even
tougher when something like PFAS affects your farm, the
contamination.
Interestingly, we really only know about two cases that we
have heard a lot about. The one in New Mexico, and then the one
in Maine. The New Mexico one is related to an Air Force Base.
The one in Maine is related to a sewage treatment byproduct
being placed on the land a long time ago. So, it is a very
complicated thing.
Once there is PFAS contamination, it pretty much stops
operations on your farm. It is very expensive to do the
testing, which is the responsibility of the farmer or often
left up to the farmer, and once you have that contamination
issue on your farm, it is very likely no one is going to buy
your milk again.
What our experience has been is that the Dairy Indemnity
Payment Program does not work well for farmers that are
impacted by PFAS, so I am just curious if this is on your radar
screen? Has this USDA taken a serious look at this? And how do
we make sure there is a pathway to getting those farms back
into production who have PFAS contamination?
Secretary Perdue. Certainly. We--I know DoD is looking at
the overall broader issue, but it certainly is and affects
dairy farms particularly. We have dealt specifically with this
New Mexico larger dairy and have paid the monthly indemnity
fee. You know, that doesn't account profitability. You still
lose that.
It reimburses for cost, but I think the good news is
recently, we are making some progress over at FDA checking over
once clean water, clean feed is able to be brought into the
cattle, then, there is a cleansing there. The meat can then be
utilized safely of the standards and the residue levels that
they have talked about.
The land, then, is different, and I have recommended, and
we are looking at just really purchasing those gals, and
relieving this person of having to milk those cows.
Ms. Pingree. Mm-hmm.
Secretary Perdue. While you dump the milk as we go forward.
It is a complicated effort in that way. We think we are close
to resolving the New Mexico issue in that way.
Ms. Pingree. Well, we will follow up with you after the
hearing. Our case is somewhat different in Maine. The New
Mexico case, in some ways, was fortunate because it was next to
a DoD facility. We don't have that same ability, but some of
the things in the Dairy Indemnity Program have not worked for
our farmer, but we will get the exact information to you.
I know we have been trying to work with the department, but
this case just hasn't been successful for a variety of reasons,
but as you can imagine, it is a financial disaster.
Secretary Perdue. I am not as familiar with the minutiae.
Ms. Pingree. I understand.
Secretary Perdue. Most of the PFAS issue in New Mexico was
water generated, water affected, not so much the land itself.
So, we would be happy to take a look at Maine.
Ms. Pingree. Great. That would be helpful, and just
finally, I have a perpetual question on the original of
livestock final rule.
Secretary Perdue. Mm-hmm.
Ms. Pingree. I know the common period on the proposed rule
ended in December. It is something the organic industry has
been waiting for a long time. So, are we closer to getting it
across the finish line? Do you have a timeline for sending the
final rule to OMB?
Secretary Perdue. On the origin of what we--? Just the--you
are--because I don't want to confuse this. That is the country
of original--?
Ms. Pingree. No. The origin of livestock. The organic rule
on origin of livestock. Dairy cows----
Secretary Perdue. Yeah----
Ms. Pingree [continuing]. In particular.
Secretary Perdue. Yes. I think we are. I think the
transition phase is really pretty close to going. I think it
is. If not, it is already there. There was an issue over
transition to organic standards, and I think the industry will
be happy with the certainty that provides, not being able to go
back and forth, and you know, kind of once organic, always
organic. In that way, I think the people who participate in
organic standards, I think, will be pleased with the rules.
Ms. Pingree. Great. Well, we are looking forward to seeing
that rule and having a resolution on that.
And with that, I yield back. Thank you very much.
Mr. Bishop. Thank you, Ms. Pingree.
Mr. Secretary, the Partnership for Public Service, a
nonpartisan nonprofit organization issues annual rankings of
the best places to work in the federal government using data
from the Office of Personnel Management, and in 2017, when the
USDA became, ``The most improved large agency,'' about moving
from ninth place to seventh place, all right, you said that
these rankings show that USDA is also a great place to work and
is improving every day.
For the last two years, however, USDA has ranked 16th and
17th. I am sorry. 16th out of 17 of the large agencies. Worse
yet, out of 420 agency subcomponents that were ranked in 2019,
USDA had 3 of the bottom 6: The Economic Research Service at
415, the Office of the Assistant Secretary for Civil Rights at
418, and the National Institute of Food and Agriculture at 419.
I think both know why ERS, Civil Rights, and NIFA were ranked
so low.
With respect to the department's ranking, since you
supported that finding in 2017, do you agree with the latest
finding?
Secretary Perdue. I think the data is the data.
Anecdotally, I don't get that sense as I move around and walk
around USDA. I think again, you have understood the NIFA, ERS,
and factually, we have had some issues in OSCAR as well that we
are working hard to do. It is a very important part of USDA's
program programs, and I think we are on the right track in that
regard. So, as far as me being able to explain that, I can't.
It doesn't match what I sense and feel as we get around and
talk to our people.
And while we are on that, I want to put in a good plug for
the USDA personnel. This last year, 19 disaster. We had another
MFP appropriation implementing the Farm Bill and frankly, with
the really frustrating ability to hire people in this economy.
And so, the people who have been there have done more with
less, and I appreciate that.
Maybe that might have some influence on it, because there
has been a lot of work to do the last couple years over
implementing the Farm Bill, as well as this disaster, MFP
payments, and others, but they--as well as the regular farm
programs. They have done a wonderful job. I am proud of them,
and I hope to make them all proud of me.
Mr. Bishop. We appreciate very much their hard work and
your hard work in leading the department. Let me switch gears
for a moment and talk about the Trade Market Facilitation
Program.
You have said on multiple occasions that you are telling
farmers not to expect or anticipate a third round of market
facilitation payments. I think that is good advice. As
optimistic as you and I and farmers may be now with the signing
of the phase one trade deal with China, the USMCA, and the
other trade deals, I am afraid that the initial retaliatory
tariffs did permanent, or at least long-term damage.
Farmers and producers have received temporary government
aid, but they lost stable and allowable markets that they had
cultivated for years. So, even as the first phase of the China
trade deal goes into effect, it doesn't mean that the farmers
are in the clear. Our markets will be slow to return, and the
bottom line is that the tariffs still are above pre-trade war
levels.
Last month, the Farm Credit Administration was up here, and
they said that loan officers are working with farmers to
diversify their portfolios to better handle these uncertain
times and this, sadly, includes recommending all farm income.
This is far from ideal. So again, as optimistic as we are about
improving fortunes, what lasting damage should we expect to
see, and do you think the events of the last three years are
likely to attract more people, particularly young people, into
farming?
Secretary Perdue. Mr. Chairman, I think when--we will not
be able to attract or retain young people in farming until we
can provide them a profitability proposal out here that allows
that economic sustainability to take place.
We saw a lot of young people come into farming in those
years of 2008 to 2013 that were kind of career highs of
profitability from agriculture. I brought a chart here that I'm
really stunned by--frankly, though, and I brought it just
because I'm excited about it, I'm optimistic. You're
optimistic, but farmers are also optimistic.
This is their--the red line is their index of future
expectations, and you can see it comes back to October of 2015.
The blue line is the index of current conditions, and then
future expectations.
This obviously took place before the coronavirus, but
farmers are optimistic out there I think with these trade
deals. We just need to make sure they come about. That's--your
question, I think the enforceability provisions on the phase
one, there's a lot of demand out there. The good news is we see
China taking action that can fulfill those numbers,
notwithstanding the corona slowdown now.
Mr. Bishop. Yeah. My concern is that in spite of that and
the valiant efforts that both Congress, the agency, as well as
some of our states like Georgia have done to try to fortify the
farmers that were suffering, particularly from the natural
disasters, we're still seeing an enhanced--an astronomical
number of bankruptcies, which means that many of our farmers
will not be around to enjoy that rebound once our relations
with China get back to normal. So, that's a concern, but it--at
this time, let me--we--I recognize Mr. Moolenaar.
Mr. Moolenaar. Thank you, Mr. Chairman, and Mr. Secretary,
thank you for the update and I--similarly, Chairman Smith from
the Farm Creditor Administration appeared before the
subcommittee last month and noted that the farm credit system
remains financially strong overall, but that certain sectors of
the farm economy are experiencing stress, and with respect to
the coronavirus, I'm just wondering if--and maybe this is a
question for Dr. Johansson.
If you as a department have any insights on how your latest
projections of growth might be--you know, with respect to trade
and how that's all going to be affected by the coronavirus,
have you had a chance to do any modeling, or any updated
information based upon this new situation?
Dr. Johansson. Thank you for the question, Congressman.
Yes, we've been looking at different projections of global
growth. More--I would say we focused more on the Chinese growth
projections and how that might affect phase one, knowing that
that would likely shift phase one purchases further out into
the year, just due to the fact as the Secretary mentioned,
while we can work forward on some of those agreements on SPS
issues, the actual purchases with shipping being slowed down in
ports and that kind of thing, we were likely to see those
purchases shifted out further.
More recently, we've turned our attention to thinking about
if we see some more global economic conditions slow down in the
first quarter here, or potentially in the second quarter, how
that will affect demand for agricultural products.
So, yes, I think normally we would look and see how much
purchasing power in emerging and developing economies, for
example, would be reflecting changes in economic conditions,
and it's likely that if there is a slowdown here in the first
part of the year, I think most forecasts show a rebound in the
later part of the year. So, again, we haven't published any
results, but we've been looking at that for sure.
Mr. Moolenaar. And do you have any idea how, you know,
the--obviously with the news of Italy kind of quarantining
everyone, and it--how does that work for agriculture exports to
Italy? How--you know, how--how does that affect things?
Dr. Johansson. Yes. Well, certainly, we would like to be
selling more products into all of Europe, and Italy included.
Certainly when they have a quarantine as they've imposed over
the last couple days, that will affect trade in and out of
Italy for sure.
I don't have any numbers in terms of how much our actual
exports are into Italy at this time. I think by and large the
Secretary mentioned our major trading partners, Japan, Mexico,
Canada, and China are all being benefited by the agreements
that we have in place.
Of course, we're acknowledging the practical limitations of
worrying about getting trade accelerated at a time when
countries are focused more on their public safety issues, but I
think that's a great question to look at, and we're certainly
trying to bring our modeling up to speed to reflect different
parts of the country that may be imposing different types of
import and export restrictions.
Mr. Moolenaar. Okay. Thank you. Thank you, Mr. Chairman.
I'll yield back.
Mr. Bishop. At this time, I'd like to yield to Mr. Pocan.
Mr. Pocan. Thank you very much, Mr. Chairman, and thank
you, Mr. Secretary. I apologize for not being here for the
first part. We have the CDC also, and these days, more people
are talking about coronavirus than agriculture, even in
Wisconsin. So--but no disrespect, and I do want to say thank
you very much for coming and visiting the facility on campus.
You're a man of your word. You're the only person I think I've
invited who has ever come to my district and followed up on
something in my seven years here.
So, thank you, and I really do appreciate that, and
hopefully we'll figure out a way to get that building done. You
know what the--I didn't tell you that day, and I should have,
is they cleaned it up for you. So, they swept up the
cockroaches and everything else, and I told them they shouldn't
have, because I wanted you to see it in its whole glory. But
you came, and I really appreciate that. So, thank you.
A couple of questions. Let me start with market
facilitation program. You know, we lost 10 percent of our dairy
farmers in Wisconsin, and it's been really a tough hole. Some
farmers get as little as two bucks through this program
depending on what they're growing.
2,600 farms got less than $1,000. The head of our farmer's
union in Wisconsin said that the true value of what farmers
lost, it didn't even make up the difference at all. So, it was
certainly something that allowed farmers to pay off some bills,
but it didn't clear their debts. These payments were next to
nothing.
The question I have is, you know, it really didn't solve
many of our farmer's problems. It was a very small amount to
many, and then conversely we found out that through the
assistance program and through some purchases, $67 million went
to JBS USA, a subsidiary of a Brazilian company. So, a
Brazilian company got 67 million, Wisconsin farmers in totality
got 43 million, less than one Brazilian company, and then some
farmers got as little as checks for two dollars. Can you help
me figure out how we're--what we're able to do next to help out
those farmers, especially as we still have some ongoing issues
with China?
Secretary Perdue. Certainly. Some of the--as you well know,
the dairy issues have been under duress for a while. The 2014
farm bill had hoped that it would be--serve dairy farmers
better. It didn't.
You all did correct that in the 2018 farm bill, and the
margin coverage program I think is going to be really helpful.
We saw a good windfall last year in 2019. So, your dairy
farmers that were still in business had a good year with the
dairy margin coverage program last year in that way. The market
facilitation program was an anti-trade tariff retaliation
program, and the exports that were--the damage that was done by
that was the way that was calculated.
Smaller dairies, so obviously it was based on production.
Smaller dairies would get less than those that were larger. It
was never a design to make people whole, and we'd have needed a
lot more billions of dollars to make dairy people whole over
the last five years in that way. So, that's where we were.
Mr. Pocan. If I can, Mr. Secretary, just a question,
because you brought it up, the margin protection program.
Secretary Perdue. Yeah.
Mr. Pocan. So, as I understand it, for farmers in
Wisconsin, they got about .20 centers per 100 weight of milk.
If you're selling milk at $29 a 100 weight, and the break even
point is about $32, the amount was pretty small actually that
dairy farmers got, and that's why I'm just trying to figure
out, because that's the problem, because I'd agree, the trade
assistance was more for my soy and corn folks, but still, it
was very, very small dollars, and even on the dairy side, it
didn't provide very much when they were already under water.
Secretary Perdue. As I indicated, it was a trade damage
program, not a price support program. So, where dairies were
under the economic duress of the last--previous five years, and
the--and the indemnity--crop insurance indemnity, or the dairy
program didn't perform as well as people had hoped under the
2014. I think you all have rectified that. If you look at the
numbers from 2018 of the Wisconsin dairies that participated,
and the amount of money they got from the dairy market margin
coverage program was vastly improved in that way.
Mr. Pocan. But I would love to work with you more, because
last year----
Secretary Perdue. Okay.
Mr. Pocan [continuing]. We actually hit our record of dairy
farmers that closed down. We're number one in the country for
farm bankruptcies, and we lost 900 dairy farms last year alone.
So, it is--it hasn't worked, and I guess that's what I'm trying
to stress is that as much as maybe from a DC numbers
perspective it looked good.
From a dairy farmer in Wisconsin perspective, it looks like
bankruptcy, and that's the problem we're having. So, we do need
to something else pretty quickly and substantially. I agree,
there's some over production, there's some other issues
absolutely out there. But if we keep losing at this rate, it's
going to really have a devastating impact in places like
Wisconsin.
Just in the second I have left, biofuels, can I try to--I
come late, and I go long. Are we working with the EPA--I know
it's the EPA program on the waivers, but obviously you know the
impact it has on the egg community. Are you working with them
to try to make it so that we can get rid of some of the waivers
that were granted so we can get back to ethanol production?
Secretary Perdue. We absolutely are hard, in that we--the
10th decision--the 10th Circuit Court decision was a benefit--
--
Mr. Pocan. Yeah.
Secretary Perdue [continuing]. There. We think that will
reduce the amount of refinery waivers that are--refineries that
are eligible for the waivers, which is significantly reduced
the number of gallons that are waived. It's been a real
hardship on the ethanol industry and those producers.
Mr. Pocan. Yeah. Whatever we could do. I know it would be
much appreciated.
Secretary Perdue. Okay.
Mr. Pocan. Thank you, Mr. Secretary.
Mr. Bishop. Thank you, Mr. Pocan. The gentlelady from
California, Ms. Lee.
Ms. Lee. Thank you very much. Thank you, Mr. Chairman.
Thank you, Mr. Secretary. I too apologize for being late, and
hopefully my questions aren't redundant, but thank you so much
for being here.
A couple of things I wanted to ask you with regard, again,
to COVID-19. One, in terms of food banks who are responding to
this epidemic/pandemic, will they be reimbursed, especially the
non-profits, for helping deliver food to individuals who cannot
for obvious public health reasons make it to food banks?
Secretary Perdue. The--we provided funds, administrative
and delivery and storage funds to them through the market
facilitation program over the market acquired program that
we're doing the $1.2 billion putting more--$1.2 billion through
the food banks. We did give them I think overall--I can't
remember how many millions of dollars we increased that for the
administrative costs, the logistics, and the storage and the
warehousing in that regard.
Ms. Lee. Has that been--since the public health----
Secretary Perdue. That----
Ms. Lee [continuing]. Emergency, or----
Secretary Perdue. No, that's been----
Ms. Lee [continuing]. Prior to that?
Secretary Perdue [continuing]. Prior to that, yes.
Ms. Lee. Prior to that, okay. So, the need obviously now is
greater, and the reimbursement rates and the level of
reimbursements will probably increase. And so is there a way to
make sure that given this public health emergency----
Secretary Perdue. I'm not aware that we have----
Ms. Lee [continuing]. That you're able to do----
Secretary Perdue [continuing]. Any authority or
appropriation to do that. We use that--other than through the
market facilitation program to do that, but I'm not aware that
we've got any direct type authorization, or appropriation to do
that.
Ms. Lee. Okay. Well, Mr. Chairman, maybe we'll look at that
and see----
Secretary Perdue. Okay.
Ms. Lee [continuing]. If in fact the need warrants us to
drill down a little bit, because this is going to be extremely
important.
Secretary Perdue. And many of these may be called upon to
serve the food kits when schools close as well.
Ms. Lee. That's right. So, thank you very much. Also, now,
considering the many low waged workers are going to lose their
hours----
Secretary Perdue. Right.
Ms. Lee [continuing]. Due to the cancellation of events,
people choosing for obvious reasons, again, public health
reasons, not to eat out, closure of office buildings. Will you
be calling on a suspension of the low cost meal allowance
nationally? People such as janitors, food service workers,
parking attendants, ticket sales people, you know, other people
who depend on a minimum wage just to barely get by, they won't
have sick time to cover lost wages.
Secretary Perdue. I think we look forward, as we all heard
yesterday over a more broad economic stimulus package, we look
forward to coordinating with you all in administration from the
food perspective there rather than going--I think there ought
to be a one government approach. I'm not sure exactly all the
plans for economic recovery in that way, but we know that food
should be an important part of it.
Ms. Lee. Okay. We'd like to work with you on that, and
also, we know this three month time limit, and to secure 20
hours a week when in fact people are going to be harmed now----
Secretary Perdue. Right.
Ms. Lee [continuing]. Even more so by the three month time
limit. How do you--I mean are there waivers that you right now
can, can grant with regards----
Secretary Perdue. The----
Ms. Lee [continuing]. To this time limit?
Secretary Perdue. There are. They are called Good Cause
Waivers. And the states have that discretion. Any time there is
an outbreak there if a job--they can't attend their job because
of not going to work or the company says don't come to work or
they have the illness themselves, the state can provide a Good
Cause excuse where they do not have to fulfill that work
requirement. That is----
Ms. Lee. And do you approve those waivers or does the
state----
Secretary Perdue. That----
Ms. Lee [continuing]. Just----
Secretary Perdue. That----
Ms. Lee [continuing]. Automatically do this?
Secretary Perdue. The state are already authorized to
provide a Good Cause excuse to do that. That is not a waiver
type of issue.
Ms. Lee. Okay. And then the other question has to do with
school meals that are served outside of the system. How about a
waiver--I think the provisions--well, first of all, is there a
blanket waiver right now as it relates to the reduction of the
price of meals and school waivers?
Secretary Perdue. Not a blanket waiver because our
attorneys have indicated that statutorily we don't have the
authority to issue a blanket waiver. But we have indicated to
the states if they as the answer will be yes.
Our attorneys have told us we have to be asked. We can't
voluntarily issue a blanket waiver. But if we are asked, the
states have indicated the answer is yes, they will receive a
waiver.
Ms. Lee. And then finally let me ask you the provisions of
Disaster SNAP versus Pandemic SNAP.
Secretary Perdue. Yeah. Right.
Ms. Lee. Can you kind of describe what those differences
are----
Secretary Perdue. Yes.
Ms. Lee [continuing]. And what that means in terms of
funding from this committee?
Secretary Perdue. Sure. To the best of my ability, the
Pandemic SNAP was something that Congress created during the
H1N1 outbreak a few years ago. It was--it expired after a year
and so it is no longer authorized under the P-SNAP.
I think we inadvertently left something up on a website
that indicated that, but as of right now there is not a P-SNAP
program because it was a program that was temporary and
expired. It might be--there might be a need for something like
that now.
The D-SNAP is a disaster program where it gives more
availability when they are not able to get to grocery stores or
food sources that--for cash assistance.
Ms. Lee. So is D-SNAP authorized?
Secretary Perdue. D-SNAP is authorized in natural
disasters.
Ms. Lee. And this would not be considered a natural
disaster?
Secretary Perdue. No, I don't think it would be. I would
have to consult, again, with our Office of General Counsel. I
don't believe we have the statutory authority to declare a D-
SNAP if that is to be--I don't think the public health
emergency qualifies for that.
Ms. Lee. Well, when you talk to your counsel, couldn't you
ask them is it broad enough for us to include a public health
emergency as part of this? Because if in fact the others--the
Pandemic SNAP is not authorized, and we can't use that----
Secretary Perdue. Right.
Ms. Lee [continuing]. D-SNAP is only a disaster related. We
have got to find some way to have a public health emergency
provision in one of these--somehow----
Secretary Perdue. I don't disagree.
Ms. Lee [continuing]. Designate that. Don't disagree.
Mr. Bishop. Will the gentlelady yield?
Ms. Lee. Yes.
Mr. Bishop. Would--what you are suggesting that you need
more authorization--you need more authority in order to do----
Secretary Perdue. Well, yes, sir, as I indicated earlier,
the----
Mr. Bishop. Public Health SNAP.
Secretary Perdue [continuing]. The P-SNAP is not--it
expired so there is no authorization or appropriation for the
P-SNAP. Funding is not necessarily an issue if we----
Mr. Bishop. Have authorization?
Secretary Perdue [continuing]. If we had authorization on
the disaster type----
Mr. Bishop. So we need to include that in whatever----
Ms. Lee. Yeah.
Secretary Perdue. Yeah, that would be one of the
possibilities.
Ms. Lee. Mr. Chair, yeah, I was asking in terms of this
next bill that we put forward, would this be reasonable for us
to look at to include in the next legislation as it relates to
next steps?
Secretary Perdue. That is one of the potential solutions.
Yes.
Ms. Lee. Okay.
Secretary Perdue. We would be happy to really work with you
on Technical Assistance to see if there are better or different
types of things that we can do or go back to a--I am not all
that familiar with the provisions of P-SNAP. But we would be
happy to work with you on a Technical Assistance basis.
Ms. Lee. Okay. Thank you very much, Mr. Secretary. And
thank you, Mr. Chairman.
Mr. Bishop. Thank you, Ms. Lee. Mr. Secretary, during your
hearing last week with the House Agriculture Authorizing
Committee, I was stunned to hear you say that you have had some
funding issues with respect to the Farm Service Agency.
If that is what you believe, it has never been reflected in
a budget request from the department. FSA has never asked for
more funds to hire up to whatever optimal staffing level that
was believed to be needed.
In fact, it was just the opposite. You are using attrition
and streamlining efforts to justify hiring reductions. So is it
your position that FSA's 2012 request of 1.1 billion dollars is
enough to fully fund an optimal workforce?
Secretary Perdue. Yes, sir. I think the 2021--the 2021
budget as requested will fully fund FSA. When we started hiring
up two years ago in that way, we did find a limitation over
budget.
Mr. Bishop. Okay.
Secretary Perdue. So that is what we expect going forward.
We think there is funding there now.
Mr. Bishop. Last year we provided $100 million more to FSA
than was requested. But this year the FSA request includes
reduction of $38 million which is attributed to staff attrition
and streamlining.
Why would you not want to put these resources towards
hiring new FSA staff, particularly since--for example, in
Georgia our customers are saying that they don't have enough
staff and that the staff that they have access to are not
accessible enough.
Secretary Perdue. Well, one of the things I mentioned
earlier, Mr. Chairman, it has been exceedingly frustrating to
be able to hire through OPM rules. And what we have to--we have
to post these jobs nationwide. And we may get a job applicant
from--that qualifies from Utah that doesn't want to move to
Georgia or vice versa. And that is kind of what the limitations
has been.
We appreciate some of the temporary direct hiring authority
which we believe we utilize in order to fulfill these offices
in optimum office productivity guidelines that way. But it has
been--it has been a challenge to hire people.
I never thought we would see a time where it is challenging
to hire people in the federal government. But people are--have
choices today. The economy--they have a lot of choices, and
many of them didn't want to move.
Mr. Bishop. Do you have a hiring plan?
Secretary Perdue. Yes, sir.
Mr. Bishop. Okay. Would you provide that to us. And would
you also provide the committee with the optimal number of FSA
employees and what it would take to actually----
Secretary Perdue. Absolutely.
Mr. Bishop [continuing]. Get there.
Secretary Perdue. Certainly. Certainly.
Mr. Bishop. Now, let me turn to another perennial concern
that we have.
Secretary Perdue. Okay.
Mr. Bishop. In October the Office of Inspector General
released on a report on its review of the FNS Nutrition
Assistance Program, disaster funding in Puerto Rico, following
Hurricanes Irma and Maria.
The IG found that what a lot of us already know and that is
that Puerto Rico does not have legislative authority to operate
a disaster nutrition program and as a result essential disaster
funding didn't get to the survivors until six months after the
hurricanes.
Further, the IG found that since Puerto Rico was unable to
operate a Disaster Nutrition Assistance Program was unable to
adequately plan for the hurricanes. Do you agree that Puerto
Rico should be a part of the Disaster SNAP program?
Secretary Perdue. And to answer the question, obviously, we
know that Puerto Rico has a block grant which should give the
territory more flexibility in fulfilling their issues.
I am not sure that putting them under a traditional SNAP
plan would help or hurt the territory. It looks like they would
have more ability to serve their people through the block grant
with limited rules and regulations in that way rather than
administering a traditional type of SNAP plan as other states
must do.
Mr. Bishop. The block grant though has a cap on it. And if
the need exceeds the block grant, they are out of luck. And
they have got people that will go unserved.
Secretary Perdue. Well, you all were very generous, as you
remember, to Puerto Rico in extending that beyond that time
period. And it was--I am not sure that the issue of serving
people was--limited to funding.
Mr. Bishop. And I do understand that, but it seems
cumbersome to have to wait until a disaster occurs and for
Congress to have to pass a special bill for Puerto Rico if that
were already in place, the provisions for that.
Secretary Perdue. But they get a block grant routinely. And
you enhance that with D-SNAP and others in that way. As I said
from--and we--you know, Mr. Chairman, we are limited in the way
of--states administer this program. That is one of the issues.
You all put all the money there, but states administer the
program. We have limited ability to control the quality of
service that states provide.
Mr. Bishop. And I understand that. And of course Puerto
Rico is not a state, but I am concerned--and there is a great
deal of concern about the territories being able to have the
resources they need when they need it.
And there seems to have been some disparity. And because of
that, we are trying to explore what we can do to eliminate that
problem re-occurring every time there is a disaster which may
require resources that exceed whatever the block grant cap is.
My time for this round has expired. Ms. Lee, do you have
additional questions?
Ms. Lee. Yes. Yes, Mr. Chairman. Thank you. Continuing with
our discussion on SNAP--as you know Low Cost Food Plan is not
currently used in SNAP, but many experts agree that the--is the
Thrifty Food Plan is outdated and does not accurately reflect
the cost or amount of food that needs to be consumed every day.
I believe we asked you for a report on low cost food and
helping to determine SNAP allotments per person. It was about a
year ago that we asked for that report. Do you have an update
on that report, Mr. Secretary? I think it is extremely
important that we know where this is.
Secretary Perdue. I am sorry, ma'am, if we have not
reported it. I don't have anything personally this morning, but
I will go back and look at that request and see.
But we--that is, that is obviously something we need to
work together on to determine what levels that you authorize
over food availability under SNAP. But if we haven't done that,
I will certainly enquire and find out why.
Ms. Lee. Thank you. Do you know when we should expect at
least a response on when we would get this report?
Secretary Perdue. Well, you should have received a response
eight months ago, but I--I will have to find out where it is in
order to answer your question. But we will be back with you----
Ms. Lee. Okay.
Secretary Perdue [continuing]. Directly on that.
Ms. Lee. Thank you very much, Mr. Secretary. And the other
issue, of course, is the rule that--you know, in terms of the
work requirement rule. Have you thought about considering
delaying this rule while COVID-19 remains a serious public
health threat. Something--this is very serious.
And I have mentioned this before how opposed many of us our
to this--really it is a cruel rule of taking food out of the
mouths of hungry individuals. And now with the public health
emergency added to this, why can't we just postpone or delay
this until at least this critical moment is over?
Secretary Perdue. Ma'am, what we are trying to do is
enforce the rules that was intended or the laws that was
intended--120 days, as you know, in that way. We give--you give
states the authority over 12 percent of a population, no
questions asked in order to do that.
Our goal as I mentioned earlier going to Baltimore to see a
job training center is we believe the ultimate best thing for
these folks are to help them to get a job of a livable wage
that they can provide for their families. We can--we looked at
delaying.
And frankly as I mentioned earlier, the Good Cause ability
that states have if there are extenuating circumstances of
disease or health or others, they are excused from that work
requirement based on their states' determination.
Ms. Lee. But in addition to states, just the rule in
general, Mr. Secretary, so many people--I think 60 or 70
percent of individuals who are working are utilizing SNAP
benefits because wages are so low.
And until we raise the minimum wage--until we make sure
that everyone has a living wage that they can afford to feed
their families, how can we do this because people are working?
Secretary Perdue. Well----
Ms. Lee. And----
Secretary Perdue. And if they make wages that qualify them,
they are still eligible for SNAP, and we continue to do that.
Ms. Lee. But the rule will not allow for that. It is a rule
that would----
Secretary Perdue. The rule simply goes back to the 1996 law
that says for--the population we are talking about, able-
bodied, adults, without dependents. Those are the people that
really don't have children to look after, don't have
disabilities. And really the--not even the elderly. The elderly
was qualified from 18 to 49 years old.
So if you are 50 above, it doesn't--that doesn't apply to
you in that population. We are trying to provide those folks--
and obviously President Clinton and others had quotes about the
goal was to move people into sustainable lifestyles, not
permanent dependence.
Ms. Lee. I agree with that goal. However, people are trying
to find work. And through no fault of their own, they can't
find work. A lot of our job training programs have been cut
back. I--I am very concerned by this.
I am former SNAP recipient--food stamp recipient myself,
and believe you, me, I couldn't be--I wouldn't be here today
had these requirements been in place. You--and again I didn't
agree with that--Clinton welfare reform law. And it has really
damaged the lives of so many women especially with children.
They couldn't finish their college education because of the
work requirements.
And so now with the economy the way it is, you know,
whether there is a public health emergency or not. People are
really--and especially in black and Latino communities, they
are trying to find work that pay decent wages. And they can't
find it.
Secretary Perdue. Ma'am, if they can't find work in an
economy of three and a half percent unemployment, I am not sure
when they can.
Ms. Lee. Mr. Secretary, when you look at the--it may be
three and a half percent for the general population, but in
communities of colors it is a lot higher. It is twice that.
Secretary Perdue. And we are continuing to issue waivers.
We have issued, I think, 80 something issues waivers for labor
market areas under these new rules in 18 different states where
there are pockets of unemployment issues.
Ms. Lee. Okay. My time is up. Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Ms. Lee. I have one other area of
inquiry, Mr. Secretary. And I think we will be about ready to
close out. It has to do with the swine inspection rule. We
currently await the Inspector General's report on worker safety
data that was used in developing the swine rule.
When the rule was proposed, USDA claimed that its data
showed a likely reduction in working injury rates for those
plants that chose to opt into the new system. Experts have
warned that there are significant limitations in the data that
was used by FSIS to draw its conclusion.
They go on to conclude that quote ``It is impossible for
FSIS to draw any statistically valid conclusion about worker
injury rate differences in the HACCP Inspection Model Program
versus the traditional plans''. Can you tell us how many
establishments have--are expected to opt in and approximately
what percent of the pork production would they represent?
And the Inspector General, of course, will soon be
completing her report on the data and the other information
used to draft the rule. If the report found flaws in the FSIS
analysis, will the department stop implementation while you
address any of the findings that she yields?
Secretary Perdue. Mr. Chairman, yes, the--this was decided
to go forward based on 20 years of pilot projects, as you may
remember, in five establishments that account for 15 percent of
the processed pork in the United States.
This has been tried for 20 years there. The data that we
have there in those establishments are the foundation for the
data that we provided in that way, which a 20 year pilot
project is a pretty long time to evaluate. That was the basis
that we felt comfortable moving forward on the Swine
Modernization Program that way.
Obviously, if they are a legitimate, factual data that we
would already be aware of it. If we--if someone can point us
something to accurate numbers that we are not aware of, we
would certainly reconsider. Our goal is not to hurt people.
Mr. Bishop. Right. So the answer is yes if the Inspector
General comes up with data that is inconsistent or does not
statistically support the implementation of the rule that you
will reconsider it. I guess that is the answer based on what--
--
Secretary Perdue. Yes.
Mr. Bishop [continuing]. What you just said.
Secretary Perdue. If it is valid, irrefutable evidence that
is real numbers certainly.
Mr. Bishop. Because and I--in all candor, these
recommendations have been made by various administrations of
both parties. So it is not just this administration that has
made those recommendation. The industry has been seeking it for
a while. And our concern is we just want to make sure that
worker safety----
Secretary Perdue. Yeah.
Mr. Bishop [continuing]. Is protected, the health, safety,
and welfare of the workers and of the public are our paramount
concern, and that is the reason that I am asking. And I hope
that you would reconsider if in fact the Inspector General's
report yields statistically significant problems.
Secretary Perdue. We share your concern on worker safety
and consumer safety. And the answer would be yes if we are
determined otherwise.
Mr. Bishop. Ms. Lee.
Ms. Lee. Very quickly. Thank you again, Mr. Chairman. Okay.
Mr. Secretary, let me just ask you about the WIC Program which
serves--what--6 million low income women and young children to
help ensure that they receive a healthy and appropriate diet at
a critical time that is crucial for children's development. So
I am sure you agree with this goal of WIC, right, Mr.----
Secretary Perdue. Yes.
Ms. Lee [continuing]. Mr. Secretary?
Secretary Perdue. Absolutely.
Ms. Lee. You agree with that. And so when--and I look at
the budget though, and I see the request of $5.5 billion which
is a level that is $550 million of last year's level. And I am
wondering how that was calculated.
I am really puzzled about this because the request as I
understand it is based on assumptions of the Nutrition Services
Administration's cost. And that level that you assume for the
average monthly recipient is $22.44 for fiscal 2021.
And so I am trying to figure out what the cost was for last
year, but why would you support this huge--and this is a big
cut, $550 million less when the need is even greater?
Secretary Perdue. Ms. Lee, as you know, the WIC Program is
a whosoever will, may come. And they going to be served in that
regard. These numbers, we believe fully support the amount of
people that will show up. We don't know. We have got lower
birth rates. We have had children who are later in life.
What we also see is a hesitancy after the free formula cuts
off after a year. People are eligible for two more years, but
they don't continue in that regards. We don't know why there
has been a lower utilization.
It may be economic issues and others, but these numbers
fully support. There is also a reserve if more people came.
There is a reserve there that--we are going to serve every
person that shows up for WIC services.
Ms. Lee. But it is my understanding that the level last
time was $25.85 per recipient per month. Now, this budget--if
our calculations are correct--is $22.44.
Secretary Perdue. I can't----
Ms. Lee. So that is reducing the amount per participant----
Secretary Perdue. I can't speak----
Ms. Lee [continuing]. Regardless of how many there are.
Secretary Perdue. I can't speak to that unless it assumes
lower number of people wanting to be served. It doesn't make
any sense that the per person cost--now, I think that some
math, it extrapolates the total there assuming the same number
of people show up. The trend line indicates that we don't
expect that to happen.
Ms. Lee. Yeah. And I would like to see your trend lines
and----
Secretary Perdue. Okay.
Ms. Lee [continuing]. And the basis for this because from
what I know--and this is just anecdotally--the need is
increasing, especially in communities where you have high rates
of poverty and where you have many low income women and women
of color who need WIC.
Secretary Perdue. Sure. And would you mind if our budget
analysist gives you the numbers here?
Ms. Lee. Sure.
Secretary Perdue. It looks like she has----
Ms. Lee. Mm-hmm.
Secretary Perdue [continuing]. Some numbers there----
Ms. Lee. Mm-hmm.
Secretary Perdue [continuing]. That support that.
Ms. Navarro. Thank you, Mr. Secretary. So for WIC, the
average per person monthly food benefit is actually increasing
between 2020 and 2021. So it goes from $41.14 to $41.91. And as
the Secretary mentioned, it really is the average participation
that is decreasing for WIC.
So for WIC per month, the 2020 budget assumed 6.4 million
participants where it decreases by $200 billion. So it goes to
$6.2 million--and for all the reasons that the Secretary
already cited, lower birth rate being the major factor.
Ms. Lee. Yeah. No. And I would like to drill down a little
bit because I chair the taskforce on poverty and opportunity.
And this is one program that has been identified as a strategy
to lift families out of poverty. And to see it being cut like
this tells me we are going in the wrong direction, but I would
like to see how you came up with these numbers. Thank you, Mr.
Chairman.
Secretary Perdue. We are all in for WIC. And whosoever
comes, get served.
Ms. Lee. Thank you very much, Mr. Secretary.
Mr. Bishop. All right, Ms. Lee. Mr. Secretary, Doctor
Johansson, and Ms. Navarro, thank you for being here today. We
look forward to working with you as we continue the Fiscal Year
2021 Appropriations process. And we will be sending a few
additional questions for the record. And we ask that you get
your responses to us by the deadline that is set by the
subcommittee.
Again, I thank you for your cooperation and for the job
that you do. We share the goal of making sure that we continue
to produce the highest quality, the safest, the most abundant,
and the most economical food and fiber and fuel anywhere in the
industrialized world. And we truly want to do all that we can
in the legislative branch to help you to do right and to feed
everyone.
With that----
Secretary Perdue. Thank you, Mr. Chairman.
Mr. Bishop [continuing]. The subcommittee is adjourned.
Wednesday, March 11, 2020.
FOOD AND DRUG ADMINISTRATION
WITNESS
STEPHEN M. HAHN, M.D., COMMISSIONER
Mr. Bishop. The subcommittee will come to order.
I apologize for my delinquency. I had to come from the
Capitol, had another hearing, and so I apologize for keeping
you waiting.
Good morning. I want to welcome all of you to today's
hearing this morning. Our hearing is to review the Food and
Drug Administration's fiscal year 2021 budget request. Our
witness is the Commissioner of the Food and Drug
Administration, Dr. Stephen Hahn.
Welcome, Commissioner. This is your first appearance before
this subcommittee, so we would like to take the opportunity to
very cordially welcome you. You come to the agency with an
impressive set of scientific and leadership qualifications, and
your leadership will be needed, definitely, to navigate the
vast and ever-changing issues under the FDA's jurisdiction.
I want to take the opportunity to highlight an issue that
is on the minds of many, many Americans right now: coronavirus,
COVID-19. The FDA plays a vital role in ensuring the safety and
the efficacy of any vaccines, therapeutics, or drugs that are
designed to address the coronavirus. It also monitors our
medical product supply to identify and to mitigate any
shortages that may result from the disruptions the coronavirus
has already caused on the global marketplace.
These are issues that we continue to monitor very closely,
and we are committed to making sure that the FDA has the
authority and the funding that it needs to continue its role.
We hope the recently enacted supplemental appropriations
bill will assist the FDA in carrying out its vital job during
this crisis. But I do want to note the observation of a leading
expert on public health. When asked what went wrong with how
the Federal Government handled this crisis, he replied, what
went right?
I will have further questions on the administration's
handling of the coronavirus outbreak, but I should also note
that we continue to actively monitor your efforts related to
youth use of vaping products.
The deadline for companies to submit pre-market
applications is just 2 months away. Preserving the ability of
adults to use vaping devices as an off-ramp from smoking while
preventing bad actors and youth-appealing flavors from
remaining on the market is a delicate balancing act, and we
look forward to hearing more about how you intend to accomplish
this while upholding FDA's mission.
I want to thank you for being with us today, and I look
forward to today's discussion.
Before moving on, I certainly want to note that our
distinguished ranking member, Mr. Fortenberry, is unable to
join us this morning. And, at this time, I would like to ask
Mr. Aderholt, who is the former chairman of this subcommittee,
for opening remarks.
Mr. Aderholt.
Mr. Aderholt. Thank you, Mr. Chairman, and good morning.
And good morning, Commissioner Hahn. Good to have you here.
And, as mentioned, of course, this is your first appearance
before the Appropriations Committee, so welcome, especially, to
that. And we have enjoyed over the years working with your
predecessors, and so we look forward to working with you as
well.
And congratulations on your new job. I know just in
December you were sworn in, so still somewhat new to the job,
but I know that you have hit the ground running because you
have had no choice, with the environment that we are in today.
Under different circumstances, we would probably ask a lot
of questions about the fiscal year 2021 President's budget, but
I suspect, as has already been mentioned, a lot of our
discussion today is going to center around the public threat
that we are seeing with the coronavirus.
I plan to focus my attention on a couple of key priorities.
One of the issues of how the coronavirus outbreak in China and
across the globe has forced us, as a Nation, to examine our
critical medical supply chain and the vulnerabilities of our
drug and device sourcing overseas. This increased attention to
our supply chain elevates another related and much-ignored
problem of how FDA treats these drug and device producers
overseas versus the production facilities in the United States.
Secondly, I would like to briefly explore what options you
think are available to increase competition of generic drugs to
make medications more affordable to the people faced with
daunting healthcare costs.
When the Health and Human Services Deputy Inspector General
appeared before this subcommittee less than 2 weeks ago, she
reminded the members here on this dais that over 80 percent of
active drug ingredients and 40 percent of finished drugs on the
U.S. American market, from ibuprofen to reduce fevers to
antibiotics to treat your infection, are produced outside the
United States.
These troubling dynamics take on special urgency given the
spread of the coronavirus. The FDA has identified at least 20
drugs that exclusively source active pharmaceutical ingredients
or finished products from China. FDA also issued an alert that
at least one Chinese drug maker has ceased production of a
human drug due to the coronavirus infection at a manufacturing
site.
And I think it is important that we reduce this national
vulnerability and that Congress act to make production of
critical drugs and other medical supplies on U.S. soil more
attractive. One such option involving FDA is a switch to
advanced manufacturing.
As I noted earlier, there is inherent unfairness in how
FDA's foreign and domestic inspections are carried out. This
could be another reason why production has moved off our
shores.
According to the Health and Human Services Inspector
General, FDA inspectors routinely conduct surprise inspections
in the U.S. to ensure that drug companies are producing
medicine in a safe, clean, and responsible manner. However,
when it comes to foreign inspections, FDA customarily gives
companies advance notice, often as much as 12 weeks, that
enables the drug suppliers plenty of time to clean up their
act.
This is counterproductive and creates an unlevel playing
field for companies trying to manufacture drugs here in the
United States. This is a real problem if our drugs are sourced
from over 150 countries, including China and India.
Now, moving on to the issue of generic drugs, one of your
predecessors noted that one of the greatest contributions that
FDA can make to the cost of medicine is to increase competition
with generic drug availability.
One such challenge appears to involve the orphan drug
review process. As I understand it, the law allows FDA to grant
7 years of market exclusivity to a drug manufacturer if the
drug is intended to treat a disease affecting less than 200,000
patients, or such exclusivity is granted if the manufacturer
cannot expect to recover the cost of the drug development and
marketing.
While the ultimate policy goal is to incentivize drug
development needed by many Americans with rare disease, the act
may be used to block competition. Our constituents struggle
with the high cost of healthcare, and if this is an area where
Congress can help, FDA needs to work with us to fix it as soon
as possible.
And so I would appreciate your input today as we move
forward through this hearing.
In closing, thank you not only to you but to your dedicated
staff for their work around the clock doing their part, too, as
we look forward and move forward with this coronavirus outbreak
that is affecting not only the United States but around the
world.
I thank you, and I yield back.
Mr. Bishop. Thank you, Mr. Aderholt.
At this time, Mr. Hahn, you can proceed with your opening
statement. We will take the entire statement for the record.
You may summarize if you would like, or you may take the full
time.
Dr. Hahn. Chairman Bishop, Congressman Aderholt, members of
the subcommittee, thank you for the opportunity to appear
before you today to discuss the President's fiscal year 2021
budget request for FDA.
As a cancer physician, researcher, and leader of complex
medical organizations, I have personally relied on and trusted
the FDA throughout my own career. It is my sincere privilege
and the honor of a lifetime to serve as Commissioner of Food
and Drugs.
As the gold standard for protecting health, the FDA is
trusted by Americans and admired around the world for its work
ensuring the safety, efficacy, and security of our Nation's
medical products and the safety of our food supply.
Behind me are the agency's center directors and other
agency senior leaders. They represent the more than 17,000 FDA
employees who serve the American public. I have been
overwhelmed by the professionalism, commitment to public
service, and remarkable expertise of FDA employees. I am
humbled to be working alongside them, and they work every day
to improve the lives of Americans.
I would also like to note that, in addition to their day
jobs, they are part of the all-of-government response to the
COVID-19 outbreak. Please join me in thanking them for their
service to our country.
There are three discrete areas I would like the agency to
focus on during my tenure as Commissioner.
The first is unleashing the power of data. The agency has
lots of data. Just think about the massive amounts of data that
we obtain and create with the thousands of drugs and devices
that we review each year. How can we, the FDA, harness the
power of these data to help, where appropriate, make us a more
nimble and better informed regulator? Utilizing data in a
smarter, more modern way can allow us to improve our regulatory
decision-making.
The second area we would like to focus on is more outward-
facing, and that is empowering American patients and consumers.
FDA has done terrific work incorporating a patient- and
consumer-focused approach. We want to continue building on this
progress, empowering the American public to be even more
informed about the products we regulate. In addition, we want
to increase our efforts to give consumers the background
knowledge and key information they want across all of our
regulated products.
And the third area we will focus on is innovation, choice,
and competition. We are operating in a time of unsurpassed
scientific and technological innovation, and I am proud of the
work that FDA has done in promoting such innovation.
In terms of choice and competition, as Congressman Aderholt
mentioned, take, for example, our work on generics. Ninety
percent of the drugs dispensed in this country are generics. In
the previous 3 fiscal years, we have seen record number of
generic approvals--900 in both fiscal years 2017 and 2018 and
over 1,100 in fiscal year 2019.
We know that more generics on the market means more
competition in the marketplace. A recent report found that a
39-percent reduction in average manufacturer price occurred
when a single generic was added to the market and that up to a
95-percent reduction in price was seen with six or more
competitors. We also have data to show that, for the period of
January of 2018 through July of 2018, this saved the American
consumer $26 billion.
We want to make this progress in other spaces as well,
including biologics, and we know we can. We look forward to
further advancing scientific and medical progress of this
country while maintaining FDA's gold standard of safety and
effectiveness.
I would be remiss if I did not mention our efforts in the
COVID-19 outbreak. This is the most recent example, in my
opinion, of how FDA adapts and responds to emerging public
health issues.
At present, this virus continues to spread and has reached
several parts of the globe. As of yesterday, CDC reported 647
cases in the U.S., although we have heard reports in the news
that that has increased, and CDC will update its data at noon
today.
FDA is playing a central role, Mr. Chairman, as you
mentioned, working closely with our public health partners. We
are helping our partners to conduct more widespread testing for
the virus by issuing emergency-use authorizations. And we are
also issuing guidance that allows for laboratories to develop,
validate, and immediately use newly developed tests to achieve
more rapid testing in the U.S.
We are also working very closely with partners to assist in
the development of treatments, vaccines, and other diagnostics
for the virus, as well as surveilling the medical supply chain
for potential shortages and disruptions.
This is the work of our agency at its finest. As the
outbreak evolves, we will be sure to update the subcommittee on
our work.
I would like to close by thanking the subcommittee for your
continued support of the agency. We all very much appreciate
that, including the investments you just provided FDA in the
recently passed supplemental bill. As you all know, FDA plays a
vital role in protecting and promoting the public health, and
this subcommittee's continued interest and support allows us to
fulfill our mission.
Once again, thank you for inviting me. I look forward to
answering your questions.
[The information follows:]
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Mr. Bishop. Thank you very much, Dr. Hahn.
Let me begin the questions.
The U.S. has lagged behind many other nations in its
ability to test patients for coronavirus. Administration
officials, including you, have made a series of what have
appeared to be confusing and inaccurate predictions over the
last few weeks about how many tests would be available and when
they would be available. People are frightened. They are not
being well-served by this lack of accurate information.
Let me run through a series of questions with you.
Did HHS or the White House decide to use CDC tests and to
limit them to being used in only 12 labs? If so, why?
Dr. Hahn. No, sir, they did not.
Mr. Bishop. Okay.
Why did FDA wait a month after the public health emergency
was declared and 17 days after problems with the CDC tests were
revealed before allowing the use of tests that were developed
by non-CDC labs?
Dr. Hahn. Sir, I can go through that if you want.
Mr. Bishop. Yes, sir.
Dr. Hahn. Okay.
At the beginning of the outbreak--and that was in January,
sir--prior to any U.S. cases, FDA reached out to developers who
we work with regularly and in the context of past public health
emergencies, as we have done in the past, to encourage the
development of tests and what we could do to actually
facilitate development.
In January, we began collaboration with not only CDC but
manufacturers around the development of a diagnostic test. And
as you probably know, sir, on February 4 we approved the
emergency-use authorization for CDC.
We have, since that time, worked with over 100 developers
on the development of diagnostic tests using a template we
provided.
And I just want to quote a developer who was quoted in the
trade press just recently about this. Commenting on FDA, ``They
have done all the work. They have even given us a cover letter
that they want and said, `Cut and paste it on your letterhead.'
They could not have made it any easier.'' And this is quoted in
the press.
We are now currently engaged with over 50 developers--and
we have been over the entire month of February--on what we call
pre-EUAs, which is really helping them back and forth on the
development of their tests. We review their data as it is
generated, and we provide feedback to help them develop those
tests, sir.
Mr. Bishop. Okay.
Now that the FDA is allowing these other labs to develop
and use their own COVID-19 tests, do you have an oversight
process in place to ensure that the tests are working properly,
both prior to FDA's review of the labs' own validations and
long-term? And if so, what is that oversight process?
Dr. Hahn. Sir, thank you very much for that question,
because I think that is an important point for the American
people.
Throughout the response and, frankly, even before this,
with the development of diagnostic tests, our role is to
provide the scientific rigor around these tests. And I am going
to approach this like a doctor, like I am.
If I have a patient in front of me who has come to see me
with a question about if they have coronavirus, what I want to
know is, when I take that test for that patient, the
information that I give to them is reliable. And, in
particular, what I want to say is, if the test comes back
negative, I have to be sure it is negative, because I know that
patient is going to go home and hug grandmom, and we want to
make sure that they are truly negative.
This gets to one issue of tests, which is sensitivity, to
make sure there are no false negatives. And one of the things
we have done throughout this with all of our developers,
including CDC, is actually pay a lot of attention to the
science behind this.
Sir, you were completely accurate about mentioning that we
have recently loosened somewhat our regulatory approach to this
to allow individual labs--and most of them are academic lab
centers--develop their own tests. These are CLIA-certified
labs, so they can perform high-complexity tests.
What we have told them is: You develop the lab. You do the
validation that you have always done and we know you do well.
You have 15 days to come back and give us that information so
that we can do an independent scientific check, but, in the
meantime, you can begin testing patients.
Mr. Bishop. Okay.
Do you have an estimate for how many tests will ultimately
be needed? And how do you plan to hit that number?
Dr. Hahn. Thank you, sir, again, for that clarification.
CDC would be best to ask regarding the number of tests that
will be needed, but I am very happy to take that to Dr.
Redfield and get back to you, sir.
But just to give you an accurate number of where we are
right now on tests, which is very similar to what we announced
at the press conference on Saturday from the White House, all
public health labs in this country have tests.
Now, there is some confusion, and we tried to clarify this
on Saturday, so I just want to be clear. I am talking about
individual tests, not test kits. Now, we send out test kits, or
the companies do, and they contain the capacity to do the test.
So what I am describing, sir, is the number of tests that would
be available.
There are approximately 200,000 tests that have been sent
out to the public health labs. CDC is responsible for this and
has been in constant contact with them, and particularly in the
areas of Washington, California, New York, providing additional
tests as needed.
There are two companies, Biosearch and IDT, who have
manufactured the CDC test and are presenting those--or selling
those around the world. Most of those, sir, are going to
nonpublic-health labs. As of this weekend, Saturday, 1.1
million tests were distributed, and we now have 2.486, so close
to 2.5, million tests in the system.
Now, with the current testing procedure----
Mrs. Lowey. I apologize. Several hearings at the same time.
Dr. Hahn. Yes, ma'am.
So, with that 2.486 million tests, the estimate is that
over 989,000 patients can be tested with the current testing
approach. Dr. Redfield has announced that they are looking at a
different approach that would allow just one swab and one test
per patient as opposed to two, which should increase the number
of patients who can be tested with what is in the system right
now.
And then the final point, sir, I would just like to make
is, we have been in touch every day with manufacturers, both
about the tests as well as all the reagents that are needed for
the tests, with the manufacturers--and there are two of them--
who are currently producing and sending out the tests for the
CDC test. They tell us that they should have 4 million
additional tests out in the system this week. They continue to
tell us the same thing. We will update you if there is any
change to that.
And, sir, just one last thing. We have been in constant
touch and on our website we have frequently asked questions
about these tests. We are updating it daily as we get feedback
from lab developers. And, today, we are going to establish a 1-
800 line so that--for 24/7, we will man it--anybody can come to
us and ask us a question about the development of tests and any
reagent shortage they might be seeing.
Mr. Bishop. I apologize for going over my time, but I
thought that the information that you were giving was very
important and critical, and so I extended my time. And I
apologize to my colleagues for that.
But, at this time, without objection, I would like to
recognize the gentlelady from New York, the chairman of the
Appropriations Committee, out of order, to make sure that she
is able to ask some questions before she has to go to other
hearings that are ongoing.
And, of course, if she would like to make an opening
statement, we will certainly entertain that.
Mrs. Lowey. You are very generous. I appreciate it.
And I am sorry that I missed your statement, but I think I
will go to a question regarding testing and automated approval.
In my home county of Westchester, New York, as you probably
know, 108 cases of coronavirus have been confirmed over the
past week of 173 statewide. The New York National Guard has
been called in to distribute food and sanitize public places
within a 1-mile radius where the virus is most dense.
New York is taking aggressive steps to combat the virus by
increasing testing capacity and has asked the Federal
Government for approval to use additional labs, including at
qualified hospitals, State facilities, and private labs, to
process tests as quickly as possible.
Things have calmed down a little bit, but I won't repeat a
lot of the questions and criticism that the Federal Government
has gotten from New York, because they organized quickly,
immediately.
So the first question I am asking: When will FDA approve
all of the requests of New York State for approval of
additional laboratories? And, specifically, when will FDA
approve automated testing at all requested sites, which could
result in much more rapid testing?
So I apologize if I missed your discussion of testing. Did
I? But if you could just answer me.
Dr. Hahn. Yes, ma'am.
Mrs. Lowey. And you will bear with me if he has already
answered it.
Yes?
Dr. Hahn. Congresswoman, I did not answer specifically the
New York question. I am very happy to do that.
I received permission early this morning, approximately
6:00 a.m., from Dr. Zucker from the New York State lab to
comment about our conversations. We have had extensive
discussions daily, several times a day, about the needs of New
York State and are providing maximum flexibility for their
laboratories.
As you know, the Wadsworth State lab has done a terrific
job. They were the second emergency-use authorization that we
issued, after the CDC. And they have done a terrific job of
developing a test. As they have explored the areas where they
want to expand, we have provided them with the appropriate
regulatory flexibility.
I understand that we have a call today with Dr. Taylor and
our folks here to provide what you are requesting. We just need
to understand the full scope of what they want.
They have done the validation testing. And what I did
mention, Congresswoman, which is really important, as a doctor,
I want to make sure that the test is valid and that the right
information is in the hands of the public health officials and
doctors so that, if you tell someone they have a negative test,
it is a real negative test, and they don't go home, hug
grandmom, grandfather, et cetera, and potentially spread
disease.
So that is so important, and the New York State labs have
done a terrific job. It is hard work, and it takes a lot of
effort and scientific expertise. We are working hand-in-glove
with them. We should have an answer today on that,
Congresswoman.
Mrs. Lowey. Have you had problems, by the way, in other
States of inaccurate testing, shortened periods of time,
lengthened periods of time? Or is New York the only State that
is doing its own testing?
Dr. Hahn. I am not aware of any inaccuracy in testing. Most
of the other States, ma'am, are using the CDC test and the kits
that are distributed by the CDC through this company IDT.
However, you know, we are aware that--and this is one of
the things that, you know, potentially CDC and Congress could
work on--the platforms that are used are varied across the
country. There are a number of different commercial platforms.
On our website and what will be available on the 1-800
number I am describing will be all of the flexibility we have
given around those platforms. Because it can't just be one
platform; we need to use the entire installed base of the
country to be able to run these tests.
However, Congresswoman, what is important is that, as we
expand to different platforms and different extraction
techniques--so you take the sample and you do the extraction to
put it in the test--we need to make sure that there is still
validity of the tests. Because what we don't want are
inaccurate results for the American people. That would make the
situation much worse.
Mrs. Lowey. Thank you.
Now, if I can get to my favorite issue, the looming
deadline of May 12, 2020, for e-cigarette manufacturers to
submit their products for review. I am worried about
enforcement and transparency. FDA likely has already received,
or soon will, thousands of pre-market tobacco product
applications. And after May 12, those products that have not
submitted an application should be promptly removed.
If FDA does not publicly list the products that applied,
how can State and Federal enforcement agencies know whether a
product can legally remain for sale? For example, how can we
know if Puff Bar puts in an application for mango but not cool
mint?
Dr. Hahn. Congresswoman Lowey, as you probably know, we
have to protect confidential commercial information.
Applications that we receive, as you completely say, by the May
12, 2020, deadline, it will be our responsibility to enforce if
we do not receive an application for a covered product, and we
will do so.
Mrs. Lowey. Wait a minute. These products are being sold to
the market, to the public. They are not doing this in secret.
The public should know which products are complying and which
are not.
Dr. Hahn. Congresswoman, I can get all of the information
around what we will do when that deadline comes in. I can tell
you that that deadline hasn't slipped. We will be receiving
applications. For those who have not submitted an application,
that will become part of our enforcement against those products
that aren't part of the application process.
Mrs. Lowey. Let's discuss Puff Bar for a minute and
disposable e-cigs.
I was optimistic when President Trump said he would clear
the market of flavored e-cigarettes. In the end, he listened to
his political advisors instead of public health experts and
announced a loophole-filled proposal that left thousands of
kid-friendly flavors on the market and allowed disposable e-
cigarettes to flourish. Now, young people are purchasing cheap,
easily concealable disposables.
Are you cracking down on flavored disposable e-cigarettes?
And most of these products, and Puff Bar's disposable in
particular, are new. They have come on the market after August
2016. Why hasn't the FDA taken them off the market?
I must tell you, I found out about e-cigarettes about 5
years ago from kids in elementary schools, with 60 percent in
elementary schools and junior high. What are we doing? Why are
these still on the market?
Now, I know you are new to the FDA. And I had many
discussions with your previous person. But I don't understand
what is going on.
You know, originally here--and I have been in this Congress
a long time--the FDA wasn't allowing products on the market
until they were reviewing them.
In any event, can you answer that question?
Dr. Hahn. Yes, Congresswoman. If it is okay with you, I
would like to go through exactly the questions that you asked.
And I----
Mrs. Lowey. If it is okay with my chairman.
But I think this is an issue that has been challenged for a
long time by many of my colleagues, because we are seeing it in
their districts as well as mine.
Thank you.
Dr. Hahn. Congresswoman, thank you.
Mr. Bishop. The chair defers to the chairwoman.
Mrs. Lowey. Oh, you are very kind.
But I think--I really see the urgency here. And I think--
you have been chair of this committee a long time--products
shouldn't be going on the market until they were approved by
FDA. Something is backward around here. They are on the market.
We have to fight to you to review them.
But, in any event, let me defer to you, because of the
generosity of the chair.
Dr. Hahn. Thank you, Congresswoman. And I did enjoy our
conversation about this--maybe not ``enjoy,'' but it was a very
fruitful conversation, I thought. Actually, I did enjoy it.
Just to preface this, the agency takes this issue very,
very, very seriously. I am a father, I am a grandfather, and I
am a lung cancer doctor. I have seen the ravages of tobacco,
and I have sat across from patients who have suffered from
that. What I don't want to see are more youth addicted to
nicotine and the potential for them to go on to combustible
tobacco products.
This is a significant and very, very high priority for the
agency. And I want you to know that Director Zeller is behind
me. We have a very close relationship. There is not a day that
goes by that we don't discuss something related to this
subject.
What I can tell you is that we used data from the 2019
Monitoring the Future Study to inform the guidance policy, but
it has three prongs. The first is, as you mentioned, the
flavors that are most appealing to kids in the cartridge-based
ENDS products.
But the second and the third prong are around any product
that has--and I can give you the exact wording here--``any ENDS
manufacturers that are not taking the appropriate precautions
that we find to protect youth are part of our enforcement
guidance.''
So the products you describe, if we find that in fact they
are being marketed to kids or in our active daily monitoring we
see those trends, we will act appropriately. And any one, not
just kid-attractive, but any one that is marketed--any of these
products that is marketed to minors will fall into the same
category.
We are, likewise, concerned about alternative sources for
kids, such as the disposables, and we are tracking that very
closely. And Director Zeller and I promise to be aggressive in
the enforcement associated with that.
Mrs. Lowey. Thank you. Now that we have solved the problem,
I will turn it back to the chair.
Mr. Bishop. Mr. Aderholt.
Mr. Aderholt. Thank you, Mr. Chairman.
As FDA knows very well, the men and women of this Nation
have an expectation that the Federal Government will protect
the health and well-being of its people. Your dedicated
professionals there at FDA know this very well. However, our
Nation has an inherent vulnerability when drugs are sourced
from over 150 countries, including China and India, as I
mentioned in my opening remarks.
Just let me just throw out a basic question to you. Do you
believe that our drug supply is safe?
Dr. Hahn. Congressman, I want to assure you, this
subcommittee, and the American people that we do, in fact,
believe that the American drug supply is safe and secure.
I do agree with you, sir, that we need to look at the
issues of redundancy of manufacturing, where the sources of
active pharmaceutical ingredients are as well as final drug
form.
This is an issue of utmost importance, and I think it has
been highlighted by what we have found in the coronavirus
outbreak, in that we have certain authorities around the
medical product supply chain that we can use. With drugs, drug
manufacturers are required to tell us if there is a shortage
that they are aware of. What we don't have is full and robust
information about the supply chain. And this, of course, is
what comes to the fore with something like coronavirus.
We have a number of legislative proposals we have put
forward, both in the drug, device, and animal drug sphere, that
we think will give us additional information to help keep an
accurate track of the supply chain.
Congressman, the other thing that I think is really
important is what you alluded to, and that is, a longer-term
solution is advanced manufacturing. This is certainly a drug
supply and a medical product on the prescription drug side but
also on the device side as well.
I think we have to do whatever we can to stimulate advanced
manufacturing in pharmaceuticals and also to encourage domestic
production. I think that will give us the appropriate
redundancy and allow us, for essential medications and vaccines
in particular, to ramp up when we need to.
Mr. Aderholt. And that leads me to my next question. In
this latest budget supplemental, we fought for and were
successful in providing you with roughly $20 million for
advanced manufacturing activities and, of course, new ways for
drug and vaccine manufacturers to help entice drug companies to
bring production back to the United States.
The $20 million supplemental was in addition to the $38.5
million that Congress provided in the fiscal year 2019 budget.
What is FDA currently doing to entice drug and medical
device companies to reestablish their manufacturing base here
in the United States?
Dr. Hahn. Thank you, Congressman. A really important
question and one of utmost importance, particularly in this
time of the coronavirus outbreak.
And thank Congress very much for the support that you have
given us over the years. It has been very, very helpful.
We are providing technical assistance and technical
guidance to manufacturers. As you know, we have oversight over
the manufacturing of drugs as well as biologics and devices.
And if we can shift to an advanced or even continuous
manufacturing approach, we want to be able to provide guidance
about what that oversight would look like so that there is some
regulatory certainty for pharmaceutical companies.
And we obviously see this even more and more from the
coronavirus, but what we need to do and what the goal of the
advanced manufacturing is is to improve the agility,
flexibility, and redundancy and to have more information about
the supply chain. We want to make sure that we do everything we
can to bolster this drug supply to support U.S. and, obviously,
international demand.
A couple of things, sir, that we have done with the money
that has been appropriated, $38.5 million so far: We have
established two new programs to advance the science of
technologies around influenza preparedness. So, obviously, that
is a really important issue, particularly in light of what we
are seeing now with coronavirus. And we have issued a draft
guidance to give regulatory clarity, which we are receiving
comments on, on continuous manufacturing for prescription
drugs. Just two examples of what we have done with the money so
far.
In terms of the supplemental funding, thank you very much,
sir, for that funding and for all of Congress. It is extremely
helpful.
We are currently working through the specifics on our end,
but we intend for this to be an all-of-agency approach since it
is not just prescription drugs but devices, animal drugs, as
well as biologics. And we are intending to pull together a
completely collaborative approach on this and build on what we
have already done.
Mr. Aderholt. My time is about out, so I will wait until
the next round.
Mr. Bishop. Ms. Pingree.
Ms. Pingree. Thank you, Mr. Chair.
And thank you so much for being here with us today and for
the work you are doing, particularly during this challenging
time. I know a lot of people at the FDA must be working a lot
of hours, and we greatly appreciate that.
It was interesting to read the story that I think was in
The New York Times today or yesterday which kind of led us
through some of the processes that maybe haven't gone right and
particularly some of the challenges in Washington State with
who is able to do the testing and did we have information
before they were technically able to release it. And I think it
is just yet another reminder of all the things that we have
been learning about what doesn't go right and what is good in
our system.
So, without, you know, looking back at that and second-
guessing all that at this moment in time, where we really have
to think about, you know, are we on track--and you gave us a
lot of very good answers about that.
I did have a chance to talk with our own health department
in Maine and our director of CDC in Maine. And we are very
fortunate because at this point we are still one of the States
that has not had a positive test. But we all know the
importance of being prepared and having the capacity to deal
with it when we do.
One of the things that he mentioned to me is that we still
need to expand the availability of testing to nongovernment
labs, like those in hospital systems. What do we need to do to
get them on line more quickly?
Dr. Hahn. Thank you----
Ms. Pingree. And I totally understand as well, I wanted to
say, I appreciate your focus on the importance of accuracy and
not having negative tests, but one thing that is clear is we
don't want to have too many hurdles in the way of getting this
capacity out there.
Dr. Hahn. Yes, ma'am. And it is completely a balance,
because you are right, we want to have a good test, but, on the
other hand, we can't throw up roadblocks to getting those tests
to the American people. Completely agree. That is exactly where
the agency is.
So, as you know, we recently issued some guidance, EUA
guidance, for flexibility around laboratory-developed tests.
Now, who are those people who would do that? They could be a
hospital system. They could be an academic center. In fact,
most of the ones--and there are 18 of them now around the
country who have done this.
What we have told them is, if you are a CLIA--and CLIA is
certification process through CMS Laboratory that does high-
complexity testing. If you are that laboratory, we know you are
a great laboratory. You can go ahead and develop the test. Here
are some recipes. Here are the reagents. Here is the
information about those tests. You can develop that test. We
call it an LDT, laboratory-developed test. You can do the
validation, because you know how to do that. Once you are sure
and confident to the validation, you get started with that test
testing. You can do that.
Now, we are requiring them to just let us know that they
have started so that we can keep track of who is doing this.
And then within 15 days they come back and give us the
validation information. We are doing the check of that.
And that, I think, answers the other question that was
brought up: How can we ensure that there is scientific validity
there? We are very confident of these labs. They are terrific
labs around the country. But everybody needs a second check,
and we are prepared to do that.
Ms. Pingree. So I apologize for my ignorance on this, but
are the in-hospital systems that I was being asked about, are
they already CLIA, or is that part of the problem, that they
have to be certified?
Dr. Hahn. Well, I can't speak to the specific labs, but
many large hospitals, certainly the academic labs, are CLIA-
certified labs.
Ms. Pingree. We don't have academic hospitals in Maine,
just our big not-for-profit systems.
Dr. Hahn. It could be very well that they are. Our team is
very--I mean, I have told you we can----
Ms. Pingree. We will follow up.
Dr. Hahn. We can definitely follow up on it.
Ms. Pingree. Yes. Okay.
Secondly, how do we ensure that those labs are sharing the
results with State health departments so, as these things are
growing, they have the information they need to do the work
with the public and the preventative work?
Dr. Hahn. Congresswoman, you are asking all the right
questions here. The Coronavirus Task Force that I am a part of,
the White House task force, we have been addressing this issue,
because what we do need is to develop, like with flu, a system
where there is, you know, the ability to report that. CDC--and
I believe Dr. Redfield spoke to that today--is working with the
White House task force to actually develop that system.
We have information now about public health laboratories,
because they do have the requirement to report to CDC. But a
nationwide reporting system for coronavirus would help very
much to address the issues that you have brought up.
Ms. Pingree. So do you anticipate--and I can hear you
saying maybe this isn't exactly in your domain, but--that we
will expand that requirement that other testing labs are
reporting to State health departments so that they can track
what is going on?
Dr. Hahn. I can't speak for the CDC right now, and that
would be a question that is best addressed to them. But, ma'am,
we can get back to you with the answer to that question.
Ms. Pingree. Great.
Well, thank you. I am out of time, but I really appreciate
your answers. Thank you.
I yield back.
Mr. Bishop. Thank you, Ms. Pingree.
Mr. Moolenaar.
Mr. Moolenaar. Thank you, Mr. Chairman.
Commissioner Hahn, thank you for being here with us today.
And I want to thank you and then all the professionals at the
FDA for their work, just ongoing work in protecting public
health but also especially during these trying times. So we
appreciate that very much.
Dr. Hahn. Thank you, sir.
Mr. Moolenaar. I wanted to ask you--on March 9, the FDA and
FDC issued warning letters to seven companies for selling
fraudulent COVID-19 products. And my understanding is they were
asked to respond to the letter to correct the violations, and
what I am wondering is, have they responded?
And, also, do you have the resources you need to identify
and issue warnings to companies that may be making bogus
claims, but also to take enforcement or legal action against
these companies?
Dr. Hahn. Thank you, Congressman, for asking that question.
We are taking this extremely seriously, just like we do in
all of the medical products space, but particularly during this
time. I think you are highlighting a really important point,
which is that we do not want false information about what works
in this outbreak.
We did announce that we issued these warning letters. I can
get more information about the followup with those. I don't
have that right now.
But I can tell you that in all the spheres of medical
products we have a progressive approach, which includes some of
the things that you have spoken about. Again, I can provide
more information about that.
Mr. Moolenaar. Okay. Thank you.
Dr. Hahn. Thank you, sir.
Mr. Moolenaar. Well, thank you for doing that. I think that
is important.
Dr. Hahn. Yes, sir.
Mr. Moolenaar. Also, I had received yesterday a letter
responding to a letter that I and 56 colleagues had sent
regarding the use of dairy terms in the labeling of nondairy
products, and I want to thank you for that response. We have a
lot of dairy in my district. And the use of dairy terms on
nondairy products may cause consumers to mistakenly believe
that these products have similar nutrient levels as real milk,
which is not accurate.
Can you provide us an update on the FDA's ongoing work to
provide clarity between dairy and nondairy products to ensure
that consumers are not being misled?
Dr. Hahn. Yes, sir. As I mentioned in my opening statement,
one of our priorities for the upcoming year is, in fact,
empowering the American consumer. And you are bringing up an
excellent point, sir. We want the most accurate and up-to-date
information in the hands of the American public.
And I share your concern that the labeling of some plant-
based dairy alternatives may lead consumers to believe that
these products have the same key nutritional attributes as
dairy products even though these products can vary widely in
their nutritional content.
We have been working diligently. This is a fairly
complicated issue, as you know. And we are evaluating and
analyzing the full variety of those plant-based products to get
the most up-to-date information into the hands of the American
public.
We are also aware, sir, of some challenges on the legal
side for labeling restrictions, some challenges we have had
under the First Amendment. We are working through those, as
well, with the agency's lawyers.
But we are working closely with industry on this. We want
to hear from stakeholders, industry, also consumer groups,
about what is the best information that we can get out.
I want to emphasize also that we are a science- and data-
based organization, as you know, and we want the science and
the data about nutritional facts labeling to be present on the
labels for the American people.
Mr. Moolenaar. Great. Thank you.
Also, I wanted to talk with you a little bit about, when
Congress passed the Drug Quality and Security Act, we
recognized the need for the FDA and States to work together to
ensure safely compounded medications. And the language that we
put in the--recognized revisions made in the new MOU for human
compacting released in September of 2018 encouraged the FDA to
work with stakeholders.
And I understand that the goal is to have States sign on,
but about half of the States have said that at this point they
haven't signed on or aren't willing to sign on. Can you
elaborate on the status on this?
Dr. Hahn. Yes, sir. This is a really important point,
because we are trying to balance certainly the safety of
compounding--as you know, there have been some high-profile
outbreaks that have occurred with respect to infections and
compounding--but also with not making this overly burdensome on
States.
We have received a lot of feedback about this. And just to
make it clear from the beginning, we want every State to sign
this MOU. That would be really important, because we want to
have the cooperation and work very closely with the States.
So we are working hard on the MOU. We are looking at
revisions, and we hope to be having something out in the coming
months. But, again, just to state, we want as many States as
possible to sign this memorandum of understanding.
We also understand completely that access to compounded
drugs is critical for some patients, and we don't want to deny
that access to those patients. So finding the right balance
between safety and getting those drugs in the hands of patients
will be really important. It is one of the things that we are
doing in this MOU.
And if I have a moment, I can just tell you some of the
things that are in the MOU that might help the States. We have
increased the threshold for what is called ``inordinate
amounts'' to 50 percent from 30 percent, which should help a
lot in terms of advancing this.
We have removed the burden on the States to need to take
action when a compounder distributes more than that. And we
have allowed them to just notify us so that we have that
information, rather than their taking action.
And we also awarded a grant to the National Association of
Boards of Pharmacy to actually put together an information-
sharing system, which we think will really help the States move
forward on this important subject.
Mr. Moolenaar. Great. Well, thank you.
And, Mr. Chairman, thank you for that added extra time.
Mr. Bishop. Mr. Pocan.
Mr. Pocan. Thank you, Mr. Chairman.
And thank you, Commissioner, for being here. I just want to
say you do have big shoes to fill. I think Commissioner
Gottlieb is someone we all had a great working relationship
with, as I know we will as well. I have great respect for him.
Yesterday, we had him come to the Progressive Caucus and
present. And you don't have a whole lot of, honestly, Trump
appointees, American Enterprise Institute employees come by to
the Progressive Caucus, but he got it because we respect him so
much. So I look forward to having that relationship.
Help me to make sure I understand this. So you said 989,000
people can get tested with the tests that are out there right
now. But, as I understand it, we can only process about 16,000
a day right now. So, at that rate, that would take 61.81 days.
And if we get it up to 20,000 by the end of the week, what they
are hoping for processing, that would still be 49.45 days.
Is that math correct? Am I understanding that we only
process that few and that is the reality? You can have tests,
but unless they are processed, they are nothing.
Dr. Hahn. Congressman, I think you are heading down the
right path in the way of thinking. It is complicated, as you
know. There is the up-front processing of the sample, where you
extract out what you need to do the test, and then there is how
you run the test and the process that you do.
One of the things that we have done--and, again, this is a
dynamic process----
Mr. Pocan. Just as quick as possible, because I have so
many questions.
Dr. Hahn. I am sorry. Yeah, we are expanding the platforms,
both on the----
Mr. Pocan. So where are we today? Are we at 16,000?
Dr. Hahn. I can get that information to you, sir.
Mr. Pocan. But does that sound about right, 16,000?
Dr. Hahn. I can't speak to the absolute number.
Mr. Pocan. Have you seen Scott Gottlieb's----
Dr. Hahn. I have.
Mr. Pocan. Because he put it out there.
Dr. Hahn. I have a huge amount of respect for Dr. Gottlieb.
Mr. Pocan. So do you think he is close to right, or do you
think he is way off?
Dr. Hahn. I think that I would want to get you the most
accurate information possible, sir.
Mr. Pocan. Okay. And I think it is really important,
because it is--it appears not truthful if we say there are
989,000 people that can get tested but you can only process
16,000 a day. That is a real problem. We have to way ramp that
up.
So I heard you talking about how you are giving them
information, you are having them let us know if they can ramp
it up. We should be aggressively ramping this up. If his
numbers are right--and I would bet--I would say ``my hair,'' if
either one of us had it, that he is right, because he often
is--that is a real problem. And I think we should be more
honest that we can't process that many.
So that number should be off the top of your tongue right
now, I really believe, if we are going to be honest with
people. This is the problem that I keep hearing from people.
They feel like they are not being told the total truth. And
because of that, there is a lot of misinformation.
So, if that 16,000 number is way off, say that. But if it
is pretty close to 16,000, we need to get that kind of
information out as well.
Dr. Hahn. Yes, sir.
Mr. Pocan. And so I would really appreciate that, like,
sooner rather than later, sort of, so we know where we are at
on that. Because, again, it is not fair to say there are 2.486
million tests that can cover 989,000 people if, indeed, 16,000
a day. That is 2 months to process that. So I just think that
is a really big asterisk, so big it barely fits in the room.
Dr. Hahn. We will get that information to you, Congressman.
Mr. Pocan. Okay. Thank you.
Also, are we facing shortages of--and I have a few
different areas--one, the reagents needed to run the
coronavirus diagnostic test? Two, of the three drugs that
people are being treated with the most, I am going to massacre
the names, but ciprofloxacin, azithromycin, and piperacillin?
And the final one is, is it true that we are rationing
sedatives necessary for people on ventilation as a result of,
for example, any serious respiratory illnesses, that those are
being rationed right now too?
So I guess the questions are the reagents, those three
drugs, and the sedatives.
Dr. Hahn. Congressman, we are aware of pressure in the
supply system on the reagents for these tests, and our medical
device shortage group has been 24/7 working on this issue. We
have a lot of frequently asked questions on our website. I
mentioned earlier today we are going to----
Mr. Pocan. Could you just answer those questions----
Dr. Hahn. Yes, sir.
Mr. Pocan [continuing]. Because of my very, very limited
time.
Dr. Hahn. Okay. We are out there with the laboratories,
providing them alternatives for these reagents. When we become
aware of shortages, we are going to let the American people
know----
Mr. Pocan. So what is the supply we have right now for
reagents? You probably know that off the tip of your tongue.
Dr. Hahn. So we know--we have been reaching folks. We know
that there are pressures particularly around RNA----
Mr. Pocan. Is it a 2-week supply that is about what is out
there right now?
Dr. Hahn. Again, we have to contact multiple----
Mr. Pocan. We need those--I mean, honestly, no offense,
those are not answers you are giving me. Like, those should be
at the tip of your tongue right now. We really need to know
that.
How about those drugs?
Dr. Hahn. We are not aware of any shortages of those drugs.
Mr. Pocan. Of those three?
Dr. Hahn. Right.
Mr. Pocan. Okay.
And then how about--we were told there is rationing of the
sedatives for people on ventilation, and there is a real
concern about that.
Dr. Hahn. We are not aware of any----
Mr. Pocan. I am seeing nodding heads, though, behind you
from your staff.
Ms. Woodcock. Intermittent shortages of propofol.
Mr. Pocan. Okay. Thank you.
But that is the kind of stuff that daily--like, I am not
happy CDC is--they were going to only update every 3 days. They
took numbers off. They said they were going to put them back
up, but their numbers are still way off. I just think this
stuff is real important for us too.
In the 30 seconds I have left, I don't know if you can
answer this, but who is distributing tests? Who is getting the
tests out there? What agency?
Dr. Hahn. Right now--to public or nonpublic health labs?
Mr. Pocan. Public.
Dr. Hahn. To the public, CDC is.
Mr. Pocan. Okay. Do you know this? I was told a military
base in Afghanistan that is 75 miles from the Iranian border,
they have people who have flu-like symptoms. They are testing
negative for flu. There are five known coronavirus cases in an
Afghan town a mile away. And they can't get tested. They have
no tests for coronavirus.
Do you have any knowledge of that? Because that is
something that is really worrying me.
Dr. Hahn. I do not, sir, but if you give us the
information, we will go to CDC and work on that.
Mr. Pocan. Yeah. We have contacted the Department of
Defense, and, yeah, we should get that out to CDC. Thank you.
Dr. Hahn. Thank you.
Mr. Pocan. Appreciate it.
Mr. Bishop. Dr. Harris.
Mr. Harris. Thank you very much.
And I am sorry China put us behind the eight ball on
coronavirus by delaying the announcement of the disease for a
month or a month and a half and arresting physicians who
actually brought it to light. But that is the way communist
countries work.
Commissioner, on the topic of China, I think there is a
note here that you have announced that foreign inspections are
not going to be conducted through April 2020. You are
postponing your inspections outside the U.S.
Now, I have to ask you--because China makes a significant
amount of, certainly, raw materials for our drugs, some of our
drugs--how can we possibly trust them? How can we trust the
safety of the drugs and the precursor that we are going to
import from China if we are not going to do inspections?
I mean, the Government in China has already proven they
can't be trusted. I mean, you know, they watched for a month,
month and a half, they watched this coronavirus epidemic start
that now may become a pandemic because of their actions. How
can we trust them?
And going to the future, what does the FDA plan to do to
make sure of the security of our drug supply from Chinese bad
action?
Dr. Hahn. Thank you, Congressman, for that question.
First of all, in the current state, FDA is confident of the
safety and security of the American drug supply. We acknowledge
exactly what you are saying. We have postponed our surveillance
inspections in China and other high-risk areas for the
protection of our employees, and we are following the State
Department guidance regarding travel.
That being said, for for-cause inspections outside of
China, we are taking those on a case-by-case basis and only
looking at the most mission-critical and essential travel.
We do have a number of ways that we can look at the safety
and security of the drug supply. Inspections are not the only
tool that we have. We have something called the PREDICT system,
which is a computerized algorithm that allows us to look at
where we would assess imports and inspect those imports that
are coming from countries that we believe would be at the
highest risk. We have updated that system to actually include
the fact that we postponed some of these inspections, and that
is allowing us to change our screening approach.
Mr. Harris. Okay. Thanks.
Just a very brief question about the premium cigar issue,
because, look, we have to go after those devices and those
tobacco products that are targeted or used by young people, but
I don't think premium cigars falls into that category. You
know, I have a shop right down the street, and I don't see
teenagers going in for it.
So does the FDA plan to provide any further modifications
to the applicability of the deeming rule as it relates to
premium cigars? Or will the FDA consider delaying the upcoming
May compliance deadlines for premium cigars until a resolution
can be reached on this very small subset of, really, adult
products?
Dr. Hahn. Sir, we acknowledge the importance of this issue
as well as the comments you made regarding who uses the premium
cigars.
As you probably know, the premium cigar issue is part of an
ongoing legal action. We will maintain the May 12, 2020,
deadline. That will be maintained.
We do have a number of approaches that we can use with
premium cigar makers that will make it easier for them to
approach this May 12, 2020, deadline, including the substantial
equivalence pathway, and we are glad to share that information.
Mr. Harris. Sure. Thank you very much.
Just briefly, on the naloxone co-prescription, I think
naloxone is an important tool in our toolbox against deaths
from the opioid epidemic. Could you please provide an update on
FDA's consideration on recommending co-prescription of
naloxone?
Dr. Hahn. Yes, sir. This is actually--you are right--a very
important issue for FDA and for the Nation.
We are making efforts just in general around naloxone, for
that to be available on the over-the-counter market. That is
one issue.
The second is we have designed, tested, and validated the
key labeling requirements to facilitate that. And in April we
approved the first generic naloxone, as you know.
We are working hard with government officials as well as
industry for the co-developed product, sir.
Mr. Harris. But very specifically the co-prescription. And
you understand, I mean, that is----
Dr. Hahn. Yes, I totally understand.
Mr. Harris. I mean, that is one way to get it into the
hands or into those households where there is a risk because
narcotics are being written into that, you know, prescriptions
are written. I mean, what is the FDA doing about co-
prescription?
Dr. Hahn. So we are working with industry as well as other
government agencies to help in the development of that.
Mr. Harris. Of that. Okay.
Dr. Hahn. Thank you, sir.
Mr. Harris. And just finally, as you know, I am interested
in making certain that, when it comes to cannabis-derived
products, that we make certain that they don't--I think that
they should be regulated pretty broadly until we have more
scientific evidence.
What is the FDA doing about CBD and the very broad--I mean,
I don't have my computer. I could search for ``CBD''; the first
10 things will claim health benefits of it. What is the FDA
doing?
Dr. Hahn. Yes, sir. So we are taking that really seriously.
As you know, we have a working group in the agency, and we just
issued a report to Congress. Congress gave us money to actually
do the sampling so we could have some more information.
We have a knowledge gap, sir, that makes it difficult for
us to know how to proceed in several areas. But what I can tell
you is the following: We have taken action against companies
who have made false claims about CBD products--curing cancer,
treating Alzheimer's. And those are the highest-risk areas. We
will continue to enforce that.
We are exploring the possibility of some regulatory
approaches from an enforcement approach that should help us
actually get to the right place and prioritize the highest-risk
areas.
Mr. Harris. Okay. Thank you very much.
And I yield back, Mr. Chairman.
Mr. Bishop. Ms. Lee.
Ms. Lee. Thank you very much, Mr. Chairman. Thank you for
this hearing.
Thank you for being here. Good to meet you, Commissioner
Hahn.
Okay. For the last week I have been drilling down, and my
staff has been working on this, I have been doing the research,
trying to figure out this whole issue of hand sanitizers.
Lo and behold, I learned that it is considered a drug and
subject to FDA oversight. Didn't know that.
Now, manufacturers are required to notify FDA if there is a
permanent discontinuance or an interruption in the manufacture
of a drug. Yet, I then found that it is only the life-
supporting or life-sustaining drugs that they are required to
report shortages of.
Now, given the public health emergency we are in, of course
the first priority, washing hands for 20 seconds. But second to
that is the use of hand sanitizers. I have been in three
cities, can't find hand sanitizers anywhere at all.
Many communities, rural communities, unhoused people who
are living on the streets, communities of color, a lot of
people don't have access to water, and this is the only kind of
alternative they have, and these are the directions from our
own government to use. But if it is not available or if people
can't afford it, what do we do?
So I was looking at alternatives. And New York, of course,
now they are using incarcerated workers to produce their own
hand sanitizer. And then I said, well, what else can we do
since our own government is not telling us what to do? And I
had asked Dr. Redfield, Dr. Fauci, Secretary Mnuchin.
Congresswoman Norma Torres asked the Ex-Im Bank director,
because we heard that, of course, the sanitizer is being
exported.
So I decided to try to figure out what to do myself. And so
online, there is a recipe for making it yourself. Two thirds
cup of rubbing alcohol, one third cup aloe vera gel, mixing
bowl, spoon, funnel, two-ounce spray bottle, liquid soap
container, masking tape, and pen.
So I am saying this to you because we are telling the
public that this is important to have. It is important also
even if there is access to water, using doorknobs, you know.
Well, you know all of the issues.
And so what in the world is going on? And why is there
such--why are we so quiet about it? No one could answer my
question. Secretary Mnuchin just said he would take it to the
task force because we were told it is the White House task
force that is looking at this.
But this is a big issue. It may not seem to be that big of
an issue. But if people don't have access or can't wash their
hands and this is the only thing they have and our government
is telling them to use this and they can't find it, what do we
do? Do we make our own?
Dr. Hahn. Thank you for that question, Congresswoman. And I
just want to acknowledge something that you said that I think
is very important. This is very important for the American
people and something that FDA takes seriously.
It is regulated, as you say, under our authorities with
drug, with CDER, the Center for Drug. And in that area, drug
manufacturers are required to tell us if there are shortages.
We are aware that there are pressures in the hand sanitizer
manufacturing. And what we do is we proactively go to
manufacturers, talk about their supply, try to match them up
with the supply chain, and try to ask them and get them to ramp
up the manufacturing. This occurs across the medical products
sphere.
Ms. Lee. Okay, but just on hand sanitizers, this is not
happening because it is not available.
Dr. Hahn. Congresswoman, I can get you the most up-to-date
information that we have about what we are hearing back from
manufacturers, because we agree that getting as much out there
as possible is important.
Ms. Lee. It is very important. But let me tell you, though,
in the meantime, if the direction is to--the public health
requirements are to use hand sanitizer short of being able to
wash your hands and you can't find it, what do you tell people?
What do we tell our constituents?
Do you believe this recipe I just laid out serves us well?
I mean, should that be posted as an alternative until the
supply is there? Or what do we tell individuals now?
Dr. Hahn. So your question is a good one. I don't know that
recipe, and I don't want to give the American people false
information about recipes. But we will look at that, yes,
ma'am.
Ms. Lee. But people are using this because they can't find
this. And then oftentimes when you try to get it online, it is
$150. I mean, go and check it out yourself. Nowhere in
Washington can you find it.
Dr. Hahn. Yes, ma'am.
Ms. Lee. And so FDA--and I was surprised, and so that is
why I am really glad you are here today, now that I found that
it is FDA that has the oversight responsibility and
manufacturers are required to report these shortages. But
somehow you have got to get the word out to people what to do
in lieu of this if, in fact, this is not available.
Dr. Hahn. Yes, ma'am. We have a drug and devices shortage
group. They are leaning in on this. They are talking to the
manufacturers every day. And we have posted on our website all
the shortages that we are aware of. I can get up-to-date
information to you, Congresswoman.
Ms. Lee. Thank you very much. Thank you, Mr. Chairman.
Mr. Bishop. Thank you, Ms. Lee.
Mr. Cuellar.
Mr. Cuellar. Mr. Chairman, thank you so much. And I
apologize, we have Homeland, we have Defense committees, and we
have Ag, of course.
Dr. Hahn, again, thank you. I want to say thank you for the
great work you did at the MD Anderson there in Texas, in
Houston. I appreciate all of the work. And what is it, about
140,000 patients that you all look at and people that have been
suffering from cancer. And I just want to say thank you for the
work that you all do there at MD Anderson.
Dr. Hahn. Thank you, sir. That was all due to the great
people in the State of Texas.
Mr. Cuellar. Thank you so much.
A couple of things. One, compounding. I understand we have
to find a balance, making sure we have safety, but at the same
time, if there are any folks that do have special needs, and
that we set up a scientific framework that works. Because if
you look at it, in the old days, when we looked at pharmacy,
that is the way they started off. I mean, that is originally,
you know, instead of going to the big companies, that is the
work that used to be done, compounding.
Tell us what you are doing to make sure that we set up a
balanced approach and have a scientific framework that works,
protects safety, but still addresses some of the special needs
for patients.
Dr. Hahn. Congressman, thank you for that question. And you
are absolutely right, this has to be a balanced approach.
We recognize that some Americans very much depend on
compounding to get the vital medicines they need. On the other
hand, we are aware of outbreaks that have occurred, safety
issues that have occurred in the past regarding compounded
drugs.
So trying to get the most appropriate framework in place
that has the balance there, ensure supply, but at the same time
make sure that it is safe as well is really important.
I can tell you a few things that we are doing. We are
trying to streamline the processes around this to make it
easier for compounders. But also, as you know, we are working
on a memorandum of understanding with the States to try to make
it less burdensome on them.
We are pushing that forward, hopefully in the next couple
of months, but we have had to receive feedback from them, and
that is appropriate, and other stakeholders to make sure we get
to the right place and achieve this balance.
We are continuing to create the 503 bulk substance list. As
you know, compounds are nominated. We have to assess them and
add them to the list. And thank you very much. Congress
provided us additional funding for that. We can hire some more
people to actually expedite that. The sooner we expedite it,
the better place we will be with this.
And then, finally, we have created and are bolstering what
we call the Compounding Center of Excellence, which really will
help us pull a lot of resources together and address this
really important issue.
Mr. Cuellar. Okay. Well, thank you for that work.
Let me bring it to the opioid crisis. Smaller communities
are really being hit hard and I just want to see what we are
doing to address the issue.
I know all of us have been talking about coronavirus, but
we still have so many people that died from opioid overuse. Can
you tell us what you all are doing to address that issue,
especially helping the small communities?
Dr. Hahn. Yes, sir. You are absolutely right. It is not as
if the other issues and challenges that face us go away during
coronavirus, and this would be one of them.
Just quickly, my perspective on this is as a cancer doctor
who completely understands the need for a balance between
making sure these opioids are in the hands of people who need
them, but at the same time making sure that we are trying to
reduce the dependence on these.
And there are a couple of areas that we are working on.
One, as I mentioned earlier, we are working on Naloxone, both
as the combination products, but also getting an over-the-
counter Naloxone. This is the reversal agent for opioids, which
would be a really important thing.
We are also working in chronic pain. So how do we develop
abuse deterrent drugs--not we, but innovators around the
country--to actually get them on the marketplace to help with
what we know are the known factors associated with abuse.
I think it is also really important, we are encouraging
manufacturers and research in the area of nonopioid approaches
for chronic pain. Because as you know, sir, that is where we
have often seen some of the problems of the epidemic, is in the
chronic pain situation. And this is an all-of-agency effort,
and we are definitely taking this seriously, and just to
express to small as well as large communities our concern for
this and our ongoing effort to make sure this is a top priority
for us.
Mr. Cuellar. All right. And I certainly understand. I mean,
right now the media attention, the Members of Congress, the
general public is on. The coronavirus is a serious situation.
But at the same time we still have other issues that we need to
continue working.
So to your men and women that do a good job, thank you so
much. And good to see another Texan.
Dr. Hahn. Thank you, Congressman.
Mr. Bishop. Thank you, Mr. Cuellar.
Dr. Hahn, there has been a great deal of press attention on
the shortage of the N95 respirator mask in the marketplace and
the Strategic National Stockpile. We have a national shortage
partly due to China shutting down exports of masks that are
manufactured there. HHS says that we have about 1 percent of
what we would need in a pandemic.
As medical devices, N95 masks are under FDA's jurisdiction.
Does FDA know what the supply of those masks is? Can you tell
us the most important things that Congress can do to help you
address existing and potential interruptions in the supply of
medical products in the United States?
The budget request includes a legislative proposal to
require medical device manufacturers to notify FDA of potential
supply shortages, just as drug manufacturers do. The emergency
supplemental provides funding to assist FDA with supply chain
interruption work, but it did not provide the requested
legislative authority.
Do you still believe that the legislation is needed even
with the additional funds that we provided last week? And to
get something through Congress fast, would it make sense to
limit such legislation to products that the Secretary deems
needed for the outbreak, and perhaps to sunset it after the
outbreak ends, while we consider long-term measures?
Dr. Hahn. Thank you, sir, for that question. And, yes, we
still believe that our request around legislative authority on
devices where masks would be in part of are necessary so that
we have a more accurate picture of the supply chain.
You bring up a very good point, sir, and this is true for
other devices as well as the N95 masks. So just a little
background, the N95 masks, there are two different types. One
are FDA authorized for the medical situation, and the other are
for industrial, authorized by NIOSH.
There is one important difference between the two, and that
is high volume or high pressure spray of liquids, such as in
the operating room if you are a surgeon and blood is coming
your way. So that is the major difference.
What we did to try to increase the supply of these masks is
issue some regulatory flexibility, that was Monday, a week ago,
to let medical providers know that they should follow the CDC
revised guidance about this. You can use either one of those
two types of masks. And there is a lot more of those other
masks available than the surgical ones that I mentioned. You
can use those other masks in the nonsurgical setting. It is all
according to the CDC guidance. And we believe that flexibility
should help.
I also understand that there are some liability issues
around this that manufacturers have mentioned, and that is a
separate subject than what FDA does.
I can tell you, sir, that we are in constant touch with
manufacturers over the respirator N95 issue. We know that there
are spot shortages. We know that there are shortening of the
supply chain associated with this and there is demand. We are
staying on top of it. If any shortages are identified by FDA,
we will let the American public know.
Mr. Bishop. Okay. Let me switch gears for a moment.
The safety of our food supply is very important, and we
have undoubtedly made improvements in our food safety systems.
Recent recalls, of course, are reminders that we still have
work to do.
Key indicators of FDA's performance are down significantly
between 2018 and 2019. Notably, domestic inspections down 18
percent, import visual exams down 25 percent, and import
samples down 21 percent.
Congress has funded over 2,700 human food FTEs for the
Office of Regulatory Affairs to address this. Unfortunately, at
the end of calendar year 2019, the Office of Regulatory Affairs
has only allocated 785 positions for the compliance and
inspection staff, not to include import and lab staff, who work
on food safety.
What accounts for the declines in inspections in recent
years in domestic inspections, import exams, and import
analysis? And what accounts for their not filling positions in
human food inspection and compliance activities?
Dr. Hahn. Sir, I will address the filling positions issue
first, because that is a critical need at the agency.
We have spent a lot of time since my arrival at the end of
December looking at the issue of human resources and hiring
qualified people to do these inspections. We have made a
substantial amount of progress in the last 2 months, but we
have a lot more progress to do to get the appropriate people
here. And so we are doing everything we can to ramp up the
number of inspectors.
The volume of food that comes into this country both from
an import point of view but also domestically produced is
substantial. We have a couple of different ways that we are
approaching this in addition to inspections.
And one of the things that we asked for is additional
funding for an artificial intelligence-based approach to this
so that we can keep up with the demand around inspections. What
this will do is allow us to better target where we need to do
the inspections and where it is best for us to look so that we
have more information.
We have done a pilot around this, and we have actually
determined that we think this can substantially increase our
ability to do that.
Mr. Bishop. But we have funded 2,700 FTEs, but you are only
utilizing 785 positions.
Dr. Hahn. Sir, we are working very hard to fill those
positions. We have cleared a lot of obstacles just recently on
that.
The other point I want to make is that we do depend upon
and work very closely with our State partners to do these
inspections as well.
Mr. Bishop. Okay. We would to like to hear a little bit
more about that.
Mr. Aderholt.
Mr. Aderholt. Thank you.
Dr. Hahn, I am aware that there are therapeutic antibodies
that can be used to treat some viruses. Is the use of these
therapeutic antibodies something that could treat COVID-19?
Dr. Hahn. Sir, we have been approached by innovators, by
developers around this.
So there is a class of drugs called antiretrovirals, drugs
that would treat a specific virus, in this case coronavirus.
There are monoclonal antibodies, as you describe, that would be
another step in the treatment.
We are aware of innovators--and I can't give you specific
details about that because of confidential commercial
information--who are also looking in that space. And we have
been approached by many, and I mean many groups, innovators,
manufacturers, around all of these particular therapeutics. And
then of course we have the vaccines, which is a much longer-
term thing.
Across that entire spectrum of treatment, the
antiretrovirals, the monoclonal antibodies, and the vaccine, we
are accelerating our work with the manufacturers to get as much
regulatory clarity, but also to help them with the development
process and to get them into patients as quickly as possible.
Obviously, some of these are new and unproven therapies.
They are going to have to go through clinical testing in order
to get them into patients on a routine basis.
Mr. Aderholt. Is there anything that can be done to help
sort of by rapid grant emergency use approval to ramp up this
manufacturing?
Dr. Hahn. We would love to work with Congress on this right
now. We have the appropriate tools and people to actually
interact. We would love to share ideas with you, sir, about
what more could be done to accelerate this. This is, as you can
imagine, with the group behind me, a top priority in terms of
trying to accelerate the development of these therapeutics.
Mr. Aderholt. And we have heard media reports that blood
banks across the country are experiencing shortages. To our
knowledge, individuals cannot get affected with COVID-19
through a blood transfusion, is my understanding.
Can tell us if you have heard from blood banks and if they
are experiencing any shortages?
Dr. Hahn. Congressman, thank you very much for asking that
question.
First of all, you are absolutely right, we have no evidence
that COVID-19 is transmitted through blood in the blood supply.
No evidence of that.
Secondly, we are aware, and it has happened within the last
several days, that there are some concerns about people not
donating blood because of the restrictions that we might have
on group gatherings, et cetera.
Consistent with local health authority recommendations, we
encourage Americans to continue to donate blood because this is
a vital issue for many Americans around the country.
So let me just state that again. Consistent with local
health recommendations about what sort of settings folks should
go to, we encourage Americans to continue to donate blood and
blood products.
Mr. Aderholt. Okay. And of course I know your background is
not infectious diseases but rather oncology. But could you tell
us, give us a comparison from what your understanding is as a
medical doctor and the research you have done, what the
casualty rate for just the regular virus is as opposed to
COVID-19, for especially say over 65-70 years of age?
Dr. Hahn. So the White House COVID-19 task force is working
on this. Dr. Birx and Dr. Fauci are definitely leaning in on
this and are doing the modeling associated with this.
I can tell you on a broad scale, because as you pointed
out, I am definitely not an infectious disease doctor, the
following. This appears to be a particularly problematic and
lethal virus for elderly and those with underlying
immunodeficiency states. Those who are getting chemotherapy.
Those with other coexisting medical problems, in some cases,
severe diabetes, dialysis, et cetera. So the mortality rate
seems to be higher in those patients.
Interestingly enough, and a welcome bit of information, is
younger folks often don't even know they have it even though
they have got infected. Now, the interesting thing about that
is that is both a good thing, because we don't want them to be
sick, but also a negative, because people don't know that they
have been infected.
With respect to the mortality, there is a range here. You
probably know that there is a range of number of people who die
of flu every year, and that can be 10,000, 20,000 according to
CDC statistics, all the way up to 65,000 to 70,000.
I don't yet have--and I believe Drs. Birx and Fauci are
working on this--the estimates for the exact mortality rate
associated with COVID-19. We believe that it is going to be
relatively close or perhaps even higher than a bad flu
outbreak.
But again, I would recommend, sir, that we wait for Dr.
Fauci and Dr. Birx to finish their modeling and let the
American people know.
Mr. Aderholt. Do you know what, for the regular flu, for
those that are, say, over age 70, what the regular flu, the
casualty rate is at?
Dr. Hahn. So we know that from the CDC data that those
numbers can vary between 0.1 and 0.4. We also know that it can
be significant in the elderly. I can take that question to Dr.
Redfield and get an accurate answer for you, sir.
Mr. Aderholt. Yeah, and I would like to know what compared
to, say, with a diagnosis of the coronavirus, how that compares
to that age group, you know, if it is, you say 0.4, 0.8,
whatever percentage it is for a regular virus, the normal virus
that is very common, as opposed to what the coronavirus would
be and how those two numbers compare.
Dr. Hahn. Yes, sir. I will ask Drs. Redfield, Fauci and
Birx to get those data. And as soon as they are available from
them, we will make sure that you all have that.
Mr. Aderholt. Thank you.
Dr. Hahn. Thank you, sir.
Mr. Bishop. Ms. Pingree.
Ms. Pingree. Thank you very much, Mr. Chair.
I am just going to take an entirely different tack here. So
a brief moment of not talking about the coronavirus.
One of many colleagues brought up CBD, and I know, I saw
the pained look on your face when that came up. I do appreciate
that you submitted the report to Congress last week. It is an
issue that has been of great concern to my constituents, the
hemp growers around the country. It is, as you know,
complicated and it has been challenging.
I think many of us were disappointed that the report didn't
provide more clarity in concrete steps forward. I know you are
focused on safety, and you reiterated in your testimony today
about the companies that are marketing products and the many
ways that human and animal health and safety may be put at
risk.
But you haven't taken any robust action to issue regulatory
guidance that would clear the market. I know you have written
some letters, but it doesn't seem like that is enough.
And aren't you concerned that having no guidance and total
inaction is actually worse for public health and safety than if
you did do something? I mean, right now it is just out there
and there are false claims and people aren't sure what to do.
So how do you see this timeline moving forward?
Dr. Hahn. Congresswoman, thank you for the question. And I
did appreciate our conversation about this. And as we discussed
and as I mentioned previously, there has to be a balanced and
pragmatic approach here.
These products are out there and we have to acknowledge
that. The American people are telling us that they want to use
these products because they think they are beneficial. We want
to make sure that we have the data to inform those decisions. I
am thinking particularly in the dietary supplement side of the
world.
So we are exploring this enforcement guidance, just as you
state, to provide some clarity, clarity to the American people,
clarity to the industry.
It has taken us a bit of time within the agency to get to
this point. I am pretty comfortable that we are going to work
forward in the next few months to actually get this. We are
working through the process within the Department and the White
House to get to that point.
And it will be a balanced approach, acknowledging the fact
that you can't make claims about cancer, Alzheimer's, et
cetera, you really can't target vulnerable populations,
pregnant, lactating women, teething rings for babies, and other
vulnerable populations, but that we know there are agents out
there that people believe could be helpful.
And we need to gather data and do research. And so a major
part of our effort is to actually do that and kind of figure
out what we can tell the American people.
And then what we do moving forward? Is it more on the
enforcement prioritization? Is it rulemaking? We don't want to
rush to that judgment until we have the data to make the right
decision. But acknowledging 100 percent what you are saying,
which is more clarity is needed regarding this from this
agency.
Ms. Pingree. And just to be clear, I have a tremendous
number of constituents who see an enormous amount of value in
the product, and as you said, are already using it for a whole
variety of reasons. I have people who are producing the
product. And I think one of challenges is, too, though,
legitimate growers, legitimate manufacturers right now sort of
knowing that there is just such a plethora of stuff out there
and claims out there it makes it hard for the serious producers
to really move forward.
The fiscal year 2021 requests $5 million. How do you see
that being helpful to accelerate your process? Is that enough
money? Where are we with supporting this effort?
Dr. Hahn. Thank you very much for that, because one of the
things--I mean, the critical need here, besides getting the
enforcement policy forward and providing regulatory clarity, is
conducting the research and gathering the data.
We have opened a portal to collect data. We would very much
value working with legitimate manufacturers to see how we could
gather those data about safety and efficacy. We are so
interested in bringing that forward, putting that together, and
helping us to inform the right way to move forward.
We are interested in learning about manufacturing, what are
the best manufacturing principles, making sure that the content
is what it is and what it is said to be. All of those things
need to be addressed moving forward.
So we are going to use the funds, both from an informatics
point of view, but also to do the research and data collection.
Ms. Pingree. I also understand that U.K. food safety agency
recently provided some advice on the upper limits. Do you
communicate with other countries and how they are looking at
this, EU counterparts? Do you imagine that there would be an
upper limit guidance?
Dr. Hahn. It is a really good question. We have looked at
this internally. And I think the context here is really
important. And, yes, we have talked to other regulars that can
answer that upfront.
But as you probably know, CBD has gone through as an active
pharmaceutical agreement through the pharmaceutical--for a drug
pathway, and is a part of an approved drug for the treatment of
two very serious pediatric seizure disorders.
What we have learned from that is that we do have to be
careful on the safety side. Those drugs are terrific for these
indications. But it has given some insight into this.
It would be very difficult and not a lot of science and
data behind being able to establish that upper limit at this
point. And we don't want to put something out that
unnecessarily either restricts, but also perhaps makes a
mistake on the safety side as well. I don't see that happening
right now until we gather additional information.
Ms. Pingree. Great. Well, I yield back. And thank you very
much for your answer.
Mr. Bishop. Thank you, Ms. Pingree.
Dr. Hahn, a 2017 HHS inspector general report on FDA's
domestic food safety inspections included a number of troubling
findings, such as, one, the FDA wasted its inspectors' time
going to facilities who were out of business or not operating;
two, even when inspectors found very serious violations, FDA
did not always take actions to remedy the problem, often
relying on voluntary actions by the facility; and three, that
the FDA consistently failed to conduct timely follow-up
inspections. In half of the cases FDA took no action within the
year and in 17 percent of the cases it never did a follow-up
inspection.
What corrective steps has FDA taken to address these
inspector general findings?
Dr. Hahn. Sir, thank you for that question.
We take very seriously the inspector general's findings
around this. We discussed earlier that we are hiring
inspectors. We are increasing the training of inspectors. We
are using other techniques, artificial intelligence, et cetera,
to actually buff up the approach that we are taking and have a
more targeted approach to this where there is the highest risk
associated with the products.
But, again, sir, I want to acknowledge the fact that we
totally hear you about those and we are working internally to
address all of those and increasing our capacity to do the
appropriate inspections.
Mr. Bishop. Thank you.
The dietary supplement industry has ballooned since passage
of the Dietary Supplement Health and Education Act of 1994.
This is a $60 billion market, but we don't actually know how
many products are out there, because manufacturers are not
required to notify FDA of the products that they make.
Your budget asked Congress for the authority to require the
disclosure of this information. This is known as product
listing. Can you tell us more about why this proposal is needed
and what the benefits will ultimately be?
Dr. Hahn. Mr. Chairman, I would like to thank you because
you totally laid out the issue here for the agency.
You are right, this is a pretty big industry, and we have
limited authorities and resources. Really haven't kept up with
the quickly expanding marketplace that we see.
And the American public depends upon us to help reassure
them about the safety of some of these products. It is becoming
increasing complicated. And our program is actually quite small
compared to that market.
So the additional $3 million in resources that this
subcommittee previously provided in 2020 will have an impact,
both around the guidance we can provide industry but also
around the ability to surveil the industry and take action when
necessary.
On the authority side, we are seeking those new authorities
in the fiscal year 2021 budget to require, as you state, all
supplements to be listed with FDA. Because that is the start,
sir, is understanding what is out there and then assessing what
claims are being made, and that will help us in prioritizing
our enforcement actions.
We think this will give us a better understanding of the
landscape and it is the beginning of a journey regarding this
to help the American people make the absolute best decisions
they can.
Mr. Bishop. Thank you.
Mr. Aderholt.
Mr. Aderholt. Thank you. And as we wrap up here, I just got
notice that the World Health Organization has declared the
coronavirus a pandemic. I understand from the reports that the
organization had previously resisted from that classification,
but it is now going forward to that. Just your thoughts on
that.
Dr. Hahn. Yes, sir. This is typically, as you point out, a
World Health Organization designation and I am not privy to
what the World Health Organization's thinking is. They have not
been willing to call this a pandemic.
Their assessment now, as you point out, and I thank you for
that information, is that this fulfills the criteria of a
pandemic, which is basically widespread global cases of the
coronavirus outbreak.
That doesn't change what we need to do in this country. We
still need to take the appropriate precautions that CDC is
asking us to do. Wash hands. If you are a vulnerable
population, take the appropriate steps.
We recently from the coronavirus task force have a terrific
guidance document. It is a two-pager that says: How do you keep
your home safe? How do you keep the workplace safe? How to keep
schools safe? It has got very practical advice around this.
These are the things that the American people need to be doing
now, and it is very important guidance, washing hands, social
distancing, all of those things.
So the fact that the World Health Organization has declared
this a pandemic, as you described, is important information. It
doesn't change what we need to do internally to protect the
country. And I think we need to address other issues from a
travel perspective, and that is what the coronavirus task force
is doing.
Mr. Aderholt. Let me ask you this, to keep it from people
going into hysteria, and especially with the classification as
a pandemic.
The average person out there, I assume that if they get a
sore throat or if they get a cough or a low grade fever it
doesn't automatically mean they have the coronavirus. How do
you tell the general public and anybody that gets a sore throat
or something to go in hibernation for 2 weeks or is it truly
just a sore throat? Is there anything, distinguishing thing
that we could be helpful? Because we are going to run into a
lot of constituents that are going to have this question, and
family members, whatever. So just your advice and comments on
that.
Dr. Hahn. Congressman, this is an excellent question and
really important for the American people. And there is a lot of
guidance from CDC and coronavirus.gov around this. We can help
make that available to your constituents.
I am going to go doctor here on you, sir, and that is, if
you are a patient who is or a person who is concerned that they
might have coronavirus, we recommend that you contact your
provider. If you don't have a provider, there are local public
health services that you can contact regarding this.
You notice I am not saying go in to see the provider. Let
the provider provide guidance about this.
And it all depends on your situation. I will give you
couple examples. If you are a 20-year-old with a sore throat,
that is a different situation than if you are someone who is
getting cancer chemotherapy and you are 60. And the
recommendations from your provider will be different, both
about what you should do immediately to treat yourself and what
you should do from a testing perspective.
So we really very much depend upon our provider base and
the State public health officials to provide guidance to
patients about this.
A couple things, though, that are general. One is, if you
are sick you shouldn't go to work. You should stay home and
recover. No matter where you are, you should really at all
times wash your hands.
If you are well, you are a younger person, for example, and
you are around someone who is a vulnerable person, and this is
in the CDC guidance, you should basically act like you might be
a carrier of coronavirus to protect that person.
We know that the people most at risk and the most
vulnerable are the elderly and those with significant
underlying conditions, such as cancer treatment, such as severe
diabetes, such as some people with cardiovascular diseases, et
cetera. They are all listed on the CDC website, and that is the
absolute best guidance we can give the American people.
Younger people are at lower risk, maybe not even knowing
they have it, and that is why this guidance. If you are around
somebody who is vulnerable, just be careful, you should act as
if you have it and protect them.
Mr. Aderholt. Okay. Just in concluding, I want to just end
by, as we had talked earlier about the treatment of foreign
drug inspections. And I know that there is an argument to be
made out there by FDA that talks about that there are other
ways that you can inspect drug facilities, I think you alluded
to it today, and there are other tools that can be used.
But considering FDA's treatment of foreign drug
inspections, granting what the Office of the Inspector General
says is there is up to 12 weeks' notice, does FDA treat
domestic drug or medical device manufacturers differently?
Dr. Hahn. Excellent question, Congressman. Thank you very
much.
So we have the same rigorous standards for foreign as well
as domestic manufacturers. Now, there are complications. Some
countries where we don't have in-country people we are required
to get visas before we go in.
But I want to be clear about something. FDA has conducted
foreign inspections that are unannounced. We have done that and
will continue to do so when appropriate.
And unannounced inspections only are done for a for-cause
basis. So when a reason is identified, such as a report of an
injury or an illness related to a product, we can and have done
a for-cause unannounced inspection. And pending the travel
restrictions that we have now right now, we will continue to do
that.
The other point I want to make is that this is a
postponement of inspections. This is not a cancellation of
inspections. So even the routine surveillance inspections, we
are planning to go back and to the best of our ability,
depending on how long the travel restrictions are in place, we
are planning to go back and do those surveillance inspections.
Mr. Aderholt. But is it generally that a lot of overseas
companies get 12 weeks, up to 12 weeks' notice at times?
Dr. Hahn. They can at times, but I can tell you,
specifically to your question, we have done unannounced visits
in both China and India.
Mr. Aderholt. Okay. Thank you.
Mr. Bishop. Dr. Hahn, thank you for being here today. We
appreciate you taking time out to share your knowledge. I am
sure that the American public is sitting on the edge of their
seat listening.
And we wish you success in leading the FDA. We look forward
to continue to work with you and to your efforts at the FDA.
We will be sending some additional questions for the record
and we ask that you get your responses back to us by the
deadline set by the subcommittee.
Again, we would like to thank you.
And with that, the subcommittee is adjourned.
W I T N E S S E S
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Coffey, Ann...................................................... 1
Davis, Hon. Rodney............................................... 78
Fong, Phyllis.................................................... 1
Gonzalez-Colon, Hon. Jenniffer................................... 71
Hagedorn, Hon. Jim............................................... 73
Hahn, S. M....................................................... 117
Harden, Gil...................................................... 1
Murrin, Suzanne.................................................. 51
Paradis, Peter, Sr............................................... 1
Perdue, Hon. Sonny............................................... 81
Perry, Hon. Scott................................................ 70
Schrier, Hon. Kimberly........................................... 75
Smith, G. R...................................................... 31
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