[Senate Hearing 116-469]
[From the U.S. Government Publishing Office]
S. Hrg. 116-469
NOMINATIONS OF KIPP KRANBUHL, SARAH C.
ARBES, AND JASON J. FICHTNER
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
ON THE
NOMINATIONS OF
KIPP KRANBUHL, TO BE ASSISTANT SECRETARY FOR FINANCIAL MARKETS,
DEPARTMENT OF THE TREASURY; SARAH C. ARBES, TO BE ASSISTANT SECRETARY
FOR LEGISLATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES; AND JASON J.
FICHTNER, TO BE A MEMBER OF THE SOCIAL SECURITY ADVISORY BOARD, SOCIAL
SECURITY ADMINISTRATION
__________
FEBRUARY 5, 2020
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[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Finance
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U.S. GOVERNMENT PUBLISHING OFFICE
45-113-PDF WASHINGTON : 2021
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COMMITTEE ON FINANCE
CHUCK GRASSLEY, Iowa, Chairman
MIKE CRAPO, Idaho RON WYDEN, Oregon
PAT ROBERTS, Kansas DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming MARIA CANTWELL, Washington
JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania MICHAEL F. BENNET, Colorado
TIM SCOTT, South Carolina ROBERT P. CASEY, Jr., Pennsylvania
BILL CASSIDY, Louisiana MARK R. WARNER, Virginia
JAMES LANKFORD, Oklahoma SHELDON WHITEHOUSE, Rhode Island
STEVE DAINES, Montana MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana CATHERINE CORTEZ MASTO, Nevada
BEN SASSE, Nebraska
Kolan Davis, Staff Director and Chief Counsel
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
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OPENING STATEMENTS
Page
Grassley, Hon. Chuck, a U.S. Senator from Iowa, chairman,
Committee on Finance........................................... 1
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 3
Portman, Hon. Rob, a U.S. Senator from Ohio...................... 5
CONGRESSIONAL WITNESS
Alexander, Hon. Lamar, a U.S. Senator from Tennessee............. 2
ADMINISTRATION NOMINEES
Kranbuhl, Kipp, nominated to be Assistant Secretary for Financial
Markets, Department of the Treasury, Washington, DC............ 7
Arbes, Sarah C., nominated to be Assistant Secretary for
Legislation, Department of Health and Human Services,
Washington, DC................................................. 8
Fichtner, Jason J., Ph.D., nominated to be a member of the Social
Security Advisory Board, Social Security Administration,
Washington, DC................................................. 9
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Alexander, Hon. Lamar:
Testimony.................................................... 2
Arbes, Sarah C.:
Testimony.................................................... 8
Prepared statement........................................... 29
Biographical information..................................... 30
Responses to questions from committee members................ 66
Fichtner, Jason J., Ph.D.:
Testimony.................................................... 9
Prepared statement........................................... 70
Biographical information..................................... 71
Responses to questions from committee members................ 84
Grassley, Hon. Chuck:
Opening statement............................................ 1
Prepared statement........................................... 90
Kranbuhl, Kipp:
Testimony.................................................... 7
Prepared statement........................................... 91
Biographical information..................................... 92
Responses to questions from committee members................ 97
Portman, Hon. Rob:
Opening statement............................................ 5
Wyden, Hon. Ron:
Opening statement............................................ 3
Prepared statement........................................... 108
(iii)
NOMINATIONS OF KIPP KRANBUHL, TO BE.
ASSISTANT SECRETARY FOR FINANCIAL
MARKETS, DEPARTMENT OF THE TREASURY;
SARAH C. ARBES, TO BE ASSISTANT
SECRETARY FOR LEGISLATION, DEPARTMENT
OF HEALTH AND HUMAN SERVICES; AND
JASON J. FICHTNER, TO BE A MEMBER OF
THE SOCIAL SECURITY ADVISORY BOARD,
SOCIAL SECURITY ADMINISTRATION
----------
WEDNESDAY, FEBRUARY 5, 2020
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 10 a.m.,
in Room SD-215, Dirksen Senate Office Building, Hon. Chuck
Grassley (chairman of the committee) presiding.
Present: Senators Thune, Cassidy, Young, Portman, Sasse,
Wyden, Cantwell, Brown, Casey, Whitehouse, Hassan, and Cortez
Masto.
Also present: Republican staff: Brett Baker, Chief Health
Policy Director, Jeffrey Wrase, Deputy Staff Director and Chief
Economist; and Nicholas Wyatt, Tax, Infrastructure, and
Nominations Policy Advisor. Democratic staff: David Berick,
Chief Investigator; Elizabeth Jurinka, Chief Health Advisor;
Tom Klouda, Senior Domestic Policy Advisor; Ian Nicholson,
Investigator; and Joshua Sheinkman, Staff Director.
OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM
IOWA, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. Today the Finance Committee will hear from
three nominees. We will hear from a nominee to be Assistant
Secretary of the Department of Treasury; a nominee to be
Assistant Secretary of the Department of Health and Human
Services; and a nominee to the Social Security Advisory Board.
First we will hear from Kipp Kranbuhl, nominated to be
Assistant Secretary of Treasury for Financial Markets. This
position is responsible for Federal debt management and
essentially works to finance the Federal Government. Though
this position certainly does not set Federal fiscal policy,
which is done by the Congress, it carries out the day-to-day
operations to keep our government funded so that we can make
sure that all the programs are successfully financed.
Next we will hear from Sarah Arbes, who is nominated to be
Assistant Secretary of Legislation, Department of Health and
Human Services. Ms. Arbes has been Acting Assistant Secretary
for Legislation for the past 8 months, so I am pleased that we
are working to get a confirmation on that position. Senators on
this committee and their offices are likely familiar with Ms.
Arbes, as she was Deputy ASL prior to her serving in Acting
capacity. I greatly appreciated her assistance in efforts to
lower prescription drug costs and other issues we have been
working with the administration on. This is a bipartisan effort
on the part of Senator Wyden and me--and members of this
committee by a vote of 19 to 9. I know that we are working
through problems with HHS regarding its responses to written
inquiries and requests from me and other Senators on the
committee. I appreciate those efforts, and I am pleased that
the committee finally seems to be receiving some digital
production on some very longstanding requests.
However, in regard to that issue, I am frustrated by the
pace of negotiations and that certain productions so far have
been provided multiple times in an unusual format. I look
forward to resolving this issue quickly and hope our staffs can
continue a productive dialogue. I have long held that the
Department must be responsive to congressional inquiries, and I
ask that Ms. Arbes focus on ensuring a prompt and meaningful
and efficient response.
Can I call on Senator Alexander before you? Senator
Alexander, you are here to introduce a person we all know very
well. Go ahead.
[The prepared statement of Chairman Grassley appears in the
appendix.]
STATEMENT OF HON. LAMAR ALEXANDER,
A U.S. SENATOR FROM TENNESSEE
Senator Alexander. Thank you, Mr. Chairman and Senator
Wyden. It is a pleasure to introduce Sarah Arbes and to welcome
her husband and their two children here. Sarah joined my staff
in 2013. She has been a part of our health policy team, which
has done a lot of work with the Finance Committee and the
Finance Committee staff in a very successful way.
She has also been able to do something not many of us could
do. She worked with Senators Carper and Coons to actually amend
the Affordable Care Act. And that is a rare occurrence around
here. And that means she is a good listener and capable of
working across party lines to try to get a result.
She has been, as you indicated, at the Department of Health
and Human Services as the principal Deputy Assistant Secretary
for Legislation. She once worked for Senator McConnell. I found
her to be, as Senator Baker used to say, an eloquent listener,
so I am sure she heard what Senator Grassley had to say about
electronic records being easier for you to deal with, and maybe
she will be able to act on that.
If I may, I would like to also say a word about Kipp
Kranbuhl, the nominee for Assistant Secretary for Treasury. I
have known him a long time. His wife Page was my first health-
care staffer. I am delighted to see him nominated to be
Assistant Secretary. And I would add that if you have a
softball team, he is a great player and you can add him to your
group.
So thank you, Mr. Chairman, for your time and for allowing
me to come today on behalf of Sarah.
The Chairman. I know you want to go right away. Let me just
say one thing, and you kind of touched on it, so I will not go
into any big detail about it now. But we do a great deal of
oversight work, and we have had problems getting--we have been
getting paper until recently, instead of electronic
communication, on our oversight investigations. And I think you
must know something about it, because you brought it up. And
since you have some jurisdiction over--your committee has a lot
of jurisdiction of HHS, if there is anything you could do to
help us there, I would appreciate it.
Senator Alexander. I would be glad to. I know something
about it, because I saw you at breakfast. [Laughter.]
The Chairman. Okay.
Senator Alexander. I will be glad to work with you, Senator
Grassley and Senator Wyden, on that. And I am confident Sarah
will as well.
The Chairman. Okay. Thank you very much.
I interrupted my opening comment, and just a couple of
seconds here, and then Senator Wyden.
In regard to what we were just talking about, I also want
to note that the ASL serves as a top advisor to the Secretary
on legislative matters. The position is not directly
responsible for regulations issued by the Department or its
agencies, and I ask the Senators to keep that in mind as we
conduct the hearing.
Finally, we will hear from Jason Fichtner, nominated to be
on the Social Security Advisory Board, created as a
bipartisan--this is a quote from the law--``a bipartisan,
independent Federal Government agency established in 1994 to
advise the President, the Congress, and the Commissioner of
Social Security on matters of policy and administration,'' end
of quote.
The Social Security Advisory Board is comprised of seven
members, and Dr. Fichtner is one of three who are appointed by
the President.
Thank you for your willingness to serve, all of you, and to
be public servants and to serve this President in your
positions you have been appointed to. And we will look forward
to your testimony in just a minute.
Now, Senator Wyden.
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator Wyden. Thank you very much, Mr. Chairman. We are
going to consider three nominations this morning: Jason
Fichtner, to serve on the Social Security Advisory Board; Sarah
Arbes, who we know is nominated to serve as Assistant Secretary
for Legislation at the Department of Health and Human Services;
and Kipp Kranbuhl, who is nominated to serve as Assistant
Treasury Secretary for Financial Markets.
Now just a few comments on these nominees. If confirmed,
Dr. Fichtner is going to be diving into important work the
Social Security Advisory Board is doing with respect to
customer service and IT. The Board also is working hard to
address challenges that come with serving some of the most
vulnerable seniors who receive Social Security, individuals--
and I remember this from my days when I was director of the
Oregon Gray Panthers--who literally are unable to manage their
own finances. So this is an important position.
If confirmed, Mr. Kranbuhl will take on a job at the
Treasury Department that deals with a lot of challenging
subjects, including debt management, housing finance, and
stability of our financial markets.
Both of them are important roles that affect the well-being
of millions of Americans. The job is all about bringing an
even-handed approach and getting people from all sides to work
in a cooperative fashion, and I hope that will be the case with
all of these nominees.
Finally, Sarah Arbes is nominated to serve in a key role at
the Department of Health and Human Services. It is a key role
because it involves working directly with the Congress as the
Department's chief point of contact between us.
For example, as the chairman noted, we defied the odds
around here. We produced a bipartisan bill to stop
pharmaceutical price gouging, and that is front and center on
our agenda. It is something that I believe we can bring people
together on and build it around principles this committee has
outlined, starting with making sure those people who show up at
the pharmacy counter no longer feel they are getting mugged,
because that is the case today.
So we take our oversight role very seriously on these
issues. I think you know we have initiated a bipartisan effort
with respect to investigating skyrocketing insulin prices, and
some prices have gone up 13-fold in recent years. And the drug
is not 13 times better. It is essentially the same drug, and
has been for 50 years. So we are serious about these issues.
And as I say, the committee sort of defied the odds not too
long ago and produced a strong bill to rein in pharmaceutical
price gouging.
Now with respect to oversight specifically, we have sent a
number of bipartisan letters to Health and Human Services on a
variety of topics, including the appalling treatment of migrant
children and families at our southern border.
We have also focused on the waste of taxpayer dollars on
public relations contacts for the head of CMS, a key part of
HHS.
I will tell you, Ms. Arbes--and of course you are hearing
this as you walk into your nomination hearing--at times it has
felt like prolonged bureaucratic root canal work trying to get
responses to our oversight inquiries.
Now, I am told there has been some recent progress on the
committee's bipartisan investigation of children's shelters,
and we appreciate that. I will tell you, my view is it has been
much harder than it needs to be to get the information this
committee and its members need to carry out our oversight
responsibilities.
Chairman Grassley and I feel it particularly important that
oversight gets short shrift, and we are also co-chairs of the
Whistleblowers Caucus. So these are important issues to us, and
we have worked productively with you in the past. We are
counting on you, if confirmed, walking in there and saying, we
are going to turn this around with respect to being responsive
and working with the Finance Committee in a bipartisan way and
taking oversight seriously, which means responses that do not
take eons and just have us waiting around forever and ever.
There needs to be improvement in how the Department
responds to the committee in that regard. And with respect to
the case we're working on that you know about, we expect the
remaining information to come to us within the next several
days. And I have made it clear, I need to see that information.
My colleagues want to see that information. And it is key to my
moving this nomination forward.
Thank you all for joining us. We have a lot to discuss. You
have a number of members who are going to be here for
questions.
Mr. Chairman, thank you, and I look forward to working with
you.
[The prepared statement of Senator Wyden appears in the
appendix.]
The Chairman. Thank you very much, Senator Wyden. Now,
Senator Portman for an introduction.
OPENING STATEMENT OF HON. ROB PORTMAN,
A U.S. SENATOR FROM OHIO
Senator Portman. Thank you, Mr. Chairman. It is my
pleasure. I appreciate your inviting me to do this this
morning. Kipp Kranbuhl is the nominee I would like to
introduce.
As you know, Mr. Kranbuhl is already working at Treasury
doing a good job there. For all the witnesses, we appreciate
your service, but for Kipp I have a special admiration because
he is taking his expertise in securities and financial markets
from where he was successful and where he could be continuing
to be successful and making a lot more money, and instead he is
stepping into public service again at the Treasury Department.
So I am pleased he is doing that. He will be nominated, and
I hope confirmed, for Assistant Secretary of Treasury for
Financial Markets, filling the role vacated by Matthew
Rutherford. He is currently the Principal Deputy Assistant
Secretary for Financial Markets, performing many of the same
duties he would be doing as the Assistant Secretary.
He has impressive education credentials, in addition to
apparently great softball skills, which I heard about for the
first time today from Senator Alexander. But on the education
side, and his skills side, he is the right person for the job.
He has a bachelor's degree in political science and economics
from Duke. He has an MBA from the University of Michigan. The
most important detail of his educational background is the fact
that he attended the same high school I did. In fact, I met
Kipp back when he was a senior in high school when I was
attending a reunion, and little did I know that I would have
the honor of introducing him some 25 years later to such an
important role.
In addition to all of his softball skills, he also has a
lot of skills and practical experience in financial markets,
making him well qualified to join Treasury in this job.
He first served as Deputy Assistant Secretary for Small
Business, Community Development, and Affordable Housing Policy,
eventually adding the role of Acting Assistant Secretary for
Financial Institutions. After 2 years total in both of these
roles, Kipp was asked to step in as the Principal Deputy
Assistant Secretary for Financial Markets, where he has been
since last August.
It is great to see his family with him here today. I notice
that his wife Page is here, who also worked for Senator
Alexander for many years. And I don't know, Mr. Chairman, these
HELP Committee staffers are kind of taking over around here.
[Laughter.]
But I am grateful that his children are here too. So to
Curry and Turner, thank you for being here, proud of your dad.
I would also like to recognize Kipp's mom who is here, Dr. Ann
Weichert Kranbuhl. She came all the way from Cincinnati today.
She is a distinguished oncologist in our community and
volunteers for the Cincinnati Children's Hospital Foundation
board of directors, where she works with my wife Jane. She has
clearly passed along her passion for public service to Kipp.
Based on his career experience and the work he has done so
far, I have no doubt that, if confirmed, Kipp will make us
proud in Cincinnati, as he has in his roles already. I believe
he will serve our country with honor and dignity, and I am
proud to support his nomination before the committee.
The Chairman. Thank you, Senator Portman. One person at the
table has not been introduced yet, so I will do my level best
to do justice to the outstanding qualifications of Dr. Jason
Fichtner. He is currently senior lecturer, international
economics, and associate director of the Masters of
International Economics and Finance programs at Johns Hopkins
University School of Advanced International Studies.
He is also a fellow at the Bipartisan Policy Center and on
the board of directors of the National Academy of Social
Insurance.
Dr. Fichtner previously worked at the Social Security
Administration, serving in positions that included Acting
Deputy Commissioner of Social Security.
Dr. Fichtner has a very impressive background that includes
stints at the Joint Economic Committee as well as at the
Internal Revenue Service.
Given the position he has been nominated to, I think it is
important to highlight the years he spent at the Social
Security Administration. It is one thing to understand how
Social Security as a policy is supposed to work, but entirely
different to have insight, which he has, into how a government
agency actually functions.
So I thank you all for being here, and we are going to
start with Mr. Kranbuhl. And for all of you, take time to say
whatever you want the committee to know about you or any policy
decisions you want to make, and introduce your family as well
if you want to do that.
So, proceed, Mr. Kranbuhl.
STATEMENT OF KIPP KRANBUHL, NOMINATED TO BE ASSISTANT SECRETARY
FOR FINANCIAL MARKETS, DEPARTMENT OF THE TREASURY, WASHINGTON,
DC
Mr. Kranbuhl. Thanks for the kind introduction, Senator
Portman, Chairman Grassley, Ranking Member Wyden, members of
the committee. Thank you for the opportunity to be here before
you today.
I am honored to be the President's nominee to be the
Assistant Secretary of the Treasury for Financial Markets, and
I am grateful for Secretary Mnuchin's confidence in me.
Before proceeding, I would like to take a moment to
acknowledge the love and support of my family, colleagues, and
friends, including those here with me: my wife of 16 years,
Page, whose years of public service working on Capital Hill for
Senator Alexander and others have inspired me; our two curious
and determined children, Curry and Turner; my mother, Dr. Ann
Weichert Kranbuhl; and my father, Dr. Michael Kranbuhl, who was
unable to join us today. Their tireless work as physicians in
southwest Ohio instilled in me the value of helping others.
For the past 22 years I have worked in the financial
markets and securities industry. Through this work, I developed
practical experience with many of the policy issues covered by
Treasury's Office of Financial Markets. This has enabled me to
appreciate the impact that many of our Nation's policies and
regulations have on all Americans.
Since the spring of 2017, I have been privileged to serve
in a variety of capacities within the Office of Domestic
Finance at the Treasury Department, and I have appreciated the
opportunity to engage with many of you and your staffs
throughout this time.
I began my work at the Treasury Department as the Deputy
Assistant Secretary for Small Business, Community Development,
and Affordable Housing Policy. After roughly a year, I was
asked to take on the role of Acting Assistant Secretary for
Financial Institutions. I held this position for nearly a year
prior to taking on my current role as the Principal Deputy
Assistant Secretary for Financial Markets, where I have worked
with Treasury's teams from the Offices of Federal Finance,
Capital Markets, and Public Finance.
In my time at Treasury, I have led or participated in
hundreds of stakeholder meetings in order to gather input from
a broad range of sources so as to inform our perspectives from
all sides. Through these efforts, I have worked with others at
Treasury to formulate policy recommendations that have led to
significant progress toward improving the competitiveness of
the American financial system, while ensuring that taxpayer
protection and safety and soundness are at the forefront of
everything that we do.
We have worked closely with our executive branch colleagues
in other departments and regulatory agencies, as well as
Congress, in order to reduce the risks to the financial markets
and the American people, while fostering the functioning of
vibrant financial markets.
We are also responsible for the financing of the Federal
Government and the management and issuance of Federal debt--the
Treasury Department's original purpose, and one of its most
important. Here, we have worked diligently and successfully to
maintain our commitment to achieving the lowest cost of
financing for the American taxpayer by expanding both our
product portfolio and our investor base.
Additionally, while keeping the interests of our Nation at
the top of mind, we have worked closely with our international
partners in order to prepare for the continuing evolution of
the global financial markets amidst ever-changing times.
As I approach the Treasury building each morning on my way
to work, I walk past scores of visitors who have come to
Washington from all parts of our country and who are lined up
to catch a glimpse of our Federal buildings and of how our
government functions. As I do, I am reminded of the
responsibility and commitment that I have made to each of them
as Americans. They inspire, focus, and motivate me.
If confirmed for this position, I look forward to
continuing to work closely with Congress, Secretary Mnuchin,
the outstanding Treasury staff, and others in the
administration, and to continuing to serve the American people.
Thank you again for the honor of this hearing, and I look
forward to answering your questions.
[The prepared statement of Mr. Kranbuhl appears in the
appendix.]
The Chairman. We will hear now from Sarah Arbes.
STATEMENT OF SARAH C. ARBES, NOMINATED TO BE ASSISTANT
SECRETARY FOR LEGISLATION, DEPARTMENT OF HEALTH AND HUMAN
SERVICES, WASHINGTON, DC
Ms. Arbes. Chairman Grassley, Ranking Member Wyden, members
of the committee, thank you for having me here today. It is a
privilege to appear--[stumbling]--I am so nervous. [Laughter.]
It is a privilege to appear before you as President Trump's
nominee to serve as Assistant Secretary for Legislation at HHS.
I would like to thank Secretary Azar and the many others at HHS
who have been helpful with my nomination at the Department.
Here with me today is my family--my husband Justin and our
two children, Reid and June; and my parents, Craig and Janie
Cudworth. They are my rock, and without their support I would
not be where I am today.
Finally, I wish to recognize the amazing HHS Legislative
Affairs team who work tirelessly every day to fulfill the HHS
mission to enhance and protect the health and well-being of
Americans, in part by serving this great institution. They are
the best team in Washington, and I am so proud to call each and
every one of them colleagues.
So I have to tell you, it is really surreal sitting on this
side of the dais. After nearly a decade as a Senate staffer, I
fondly remember sitting where your staff sits right now, giving
advice on hearing strategy, member interest, and ways to
advance your policy goals. It is those formative years that
have helped me prepare for the role that I am seeking your
support for today.
My experiences in both the majority and minority under
Chairman Alexander, Leader McConnell, and Senator Jim Talent
taught me about listening to constituents, the power of
bipartianship, and the importance of precedence. I owe each of
them a debt of gratitude for the unique lessons of leadership I
learned and the opportunity to serve alongside them as they
worked tirelessly for the great States of Tennessee, Kentucky,
and Missouri.
The Office of the Assistant Secretary for Legislation plays
a critical role in ensuring the communication between the
executive and the legislative branches that our founding
fathers envisioned. If confirmed, it would be my job to ensure
that you receive the technical assistance that you need to
draft legislation and answers to your questions about the
Department's programs.
Additionally, it is the responsibility of this position to
ensure that you are informed in a timely manner of the
administration's initiatives and policies, so that together we
can serve the American people better.
Over the last 3 years, I have been the Principal Deputy in
HHS Legislative Affairs. In this role, I am the policy lead for
our team. And when I think back to all the issues the
Department has collaborated with this committee on in that
time, I realize just how much we have accomplished together.
The list is long.
If you will indulge me just a moment, I will name just a
few. We are turning the tide on the opioid epidemic, lowering
the cost of prescription drugs, providing relief to Americans
who suffered after Hurricanes Harvey and Irma, protecting
American medical research from foreign threats, helping more
foster children find their forever homes, and strengthening
Medicare.
If confirmed, I pledge to continue my commitment to the
close collaboration between HHS, this committee, and Congress
that will help more Americans live longer, healthier, happier
lives.
Thank you again for the opportunity to be here today, and I
look forward to your questions.
[The prepared statement of Ms. Arbes appears in the
appendix.]
The Chairman. Thank you; and now Dr. Fichtner.
STATEMENT OF JASON J. FICHTNER, Ph.D., NOMINATED TO BE A MEMBER
OF THE SOCIAL SECURITY ADVISORY BOARD, SOCIAL SECURITY
ADMINISTRATION, WASHINGTON, DC
Dr. Fichtner. Thank you. Chairman Grassley, Ranking Member
Wyden, and members of the committee, thank you for the
opportunity to appear before you today. And, Chairman Grassley,
thank you for the very kind introduction.
I want to take a moment quickly to thank my friends who are
here today to support me, including my spouse Sara, who is
sitting behind me today. I also want to thank the President for
nominating me to serve as a member of the Social Security
Advisory Board.
Over a decade ago, I was privileged to serve in several
positions at the Social Security Administration, including as
the Acting Principal Deputy Commissioner of Social Security. In
that capacity, I worked with Congress, the White House, the
Social Security Advisory Board, stakeholders, and the public to
support the vital programs administered by the Social Security
Administration and to improve the service the organization
provides to the public.
I was also the Secretary to the Social Security Board of
Trustees. Additionally, I was instrumental in improving the
administration's communication materials to the public,
including the ``When to Start Receiving Retirement Benefits''
publication, a publication that informs people how Social
Security benefits fit into their retirement decision, and one
that is still used today.
I believe that my educational and professional experiences
make me an ideal candidate to serve on this Board. With respect
to my education, I received my undergraduate degree from the
University of Michigan, my master's degree in public policy
from Georgetown University, and my Ph.D. in public
administration and policy from Virginia Tech. Professionally,
along with my previous experience at the Social Security
Administration, I have worked as an economist for the Internal
Revenue Service and as a senior economist for the Joint
Economic Committee of the United States Congress.
I have a long record of published research on issues
related to Social Security's retirement and disability
programs, as well as retirement security issues in general. I
also have a long history of working in a bipartisan manner,
bringing people together to discuss, deliberate, and address
the challenges facing the Social Security Administration and
the vital programs it administers.
The Social Security Advisory Board makes recommendations to
the President, the Congress, and the public that, among other
things, will ensure the quality of service delivery that the
Social Security Administration provides, including increasing
the public's understanding of program benefits.
The heart of any organization is its employees, those who
work tirelessly every day to fulfill the mission and deliver
quality services. One of the accomplishments of which I am most
proud from my tenure at the Social Security Administration is
getting to know the employees of the agency, many of whom I
remain in contact with today, and some of whom have shown up
here today to support me. It is truly a great privilege to once
again be asked to serve the public and work with those at the
Social Security Administration.
The Social Security Advisory Board plays an important role
in advising how our Nation's important social insurance
programs can be improved and strengthened and providing advice
and guidance to the Social Security Administration on ways to
improve the administration of these very valuable programs.
Should I be confirmed as a member of the Social Security
Advisory Board, I pledge to continue working in a bipartisan
manner to ensure that our Nation's Social Security programs
provide the best possible service to the public.
Thank you again for inviting me to testify today, and I
would be happy to answer any questions.
[The prepared statement of Dr. Fichtner appears in the
appendix.]
The Chairman. We will have 5-minute rounds, starting with
this Senator and Senator Wyden, and then it looks like it's
Portman, Casey, Toomey, Whitehouse, Young, Hassan, Sasse,
Cortez Masto, and Thune.
First of all, we have always for nominees four obligatory
questions, so I will read the question and then each of you
would be expected to say ``yes'' or ``no'' or something like
that.
First, is there anything that you are aware of in your
background that might present a conflict of interest with the
duties of the office to which you have been nominated?
Mr. Kranbuhl. No, sir.
Ms. Arbes. No, sir.
Dr. Fichtner. No, sir.
The Chairman. Okay; thank you. Do each of you know of any
reason, personal or otherwise, that would in any way prevent
you from fully and honorably discharging the responsibilities
of the office to which you have been nominated?
Mr. Kranbuhl. No, sir.
Ms. Arbes. No, sir.
Dr. Fichtner. No, sir.
The Chairman. Okay; thank you for that.
Do you agree, without reservation, to respond to any
reasonable summons to appear and testify before any duly
constituted committee of the Congress, if you are confirmed?
Mr. Kranbuhl. Yes, sir.
Ms. Arbes. Yes, sir.
Dr. Fichtner. Yes, sir.
The Chairman. Okay. Finally, do you commit to provide a
prompt response in writing to any questions addressed to you by
any Senator of this committee?
Mr. Kranbuhl. Yes, sir.
Ms. Arbes. Yes, sir.
Dr. Fichtner. Yes, sir.
The Chairman. Now it might not surprise you, Ms. Arbes, I
am going to start out with that last point. You heard what
Senator Wyden said about the issue of our oversight. Maybe I do
not speak as strongly as he does, but let me associate myself
with his remarks on the importance of oversight.
So the first question deals with what Senator Wyden went
into. And then I also had this discussion with Senator
Alexander. In May of last year, Senator Wyden and I sent an
oversight letter to HHS regarding reports of mismanagement and
abuse occurring in facilities belonging to the HHS Office of
Refugee Resettlement and their grantees.
HHS initially refused to provide Ranking Member Wyden and
me with digital productions. And then when some digital
documents were provided, those digital documents were provided
in a manner that was unsearchable.
In the past, HHS has provided document production that can
at least be made searchable very easily. In most other agencies
of the Federal Government, we do not have any problem
whatsoever with digital communication.
So, a very simple question: would HHS commit to providing
consistent, usable, searchable digital productions to the
committee? And I would emphasize the words ``consistent,
usable, searchable,'' and I would even add ``sortable.''
Ms. Arbes. Sir, I am absolutely happy to take that back to
the Department. We will strongly consider finding ways to make
our documents searchable.
The Chairman. Okay. We have received some productions
electronically, but those productions until very recently have
been primarily unsearchable or unsortable. This makes such a
large amount of information very, very difficult to use. When
respondents to the committee provide digital production, it is
widely understood and expected that they are to be produced in
a searchable form, or at the very least, in a form that can be
converted into a searchable format easily.
So I need to ask again, could you commit to provide
consistent, usable, and searchable digital production to the
committee?
Ms. Arbes. So we are happy to have a further discussion
about searchable documents. What we have a difficult time with
is making documents editable. We do need to protect the
integrity of the documents coming from the Department.
But I do pledge to work with you and your staff, as we have
thus far. We have made a tremendous number of accommodations
for the committee and pledge to continue doing so on a case-by-
case basis.
The Chairman. Well, you know things like this happen. We
are told that, well, it is the Counsel of the Department that
is the problem, so we talk to them. And then they say it is the
problem of Legislative Affairs. You know, when we get this sort
of double-talk--and I am not accusing you of double-talk
because I am sure you are here to tell us what you can do or
not do, and I do not know what you can do or not do. But the
point is that it is kind of like, when we just ask all of you,
would you cooperate with information for Congress--the extent
to which all of you say ``yes''--and not just you three. I am
talking about, over a period of 25 years, I have been advising
people when they come to my office, and you are going to
respond to our request for oversight, maybe you ought to say
``maybe'' instead of ``yes.''
You know, because we do not really get the cooperation we
are promised, we cannot do our constitutional job of oversight.
So the bottom line of it is, basically you kind of feel like--I
do not know whether it is political people in these agencies or
whether it is the professional people, but it is just like they
are sticking their finger in our eye. Because it just does not
make sense that we would get a spreadsheet that is sorted out
over four things, and when we get it from the Department of
Defense, we can read it. When we get it from HHS, we cannot
read it. And that is kind of the problem.
So I think I will call on Senator Wyden.
Senator Wyden. Thank you, Mr. Chairman. And as always, we
are teaming up on oversight. And that will be my second
question.
But I want to start, if I could, Ms. Arbes, with respect to
the coronavirus. It seems that there are developments almost by
the hour every single day. And the administration says they are
evaluating their response every single day.
Can you tell me what that means to people in this country
who may have been exposed?
Ms. Arbes. Sir, I am not a--I am a communicator by trade; I
am not a public health expert. But I can assure you that our
public health experts are working around the clock to
communicate best practices to the American people as possible--
as much as possible.
Some of the same standards that apply for preventing the
flu also apply here: washing hands regularly, sneezing into
your elbow, other ways of prevention of disease. And if there
is additional
follow-up that I can provide that would be helpful for your
office, I am happy to share that with you.
Senator Wyden. So if you have been exposed, are you telling
people what they might do? In other words, I heard about
washing your hands. We have all heard about that. But my
question was, what does this mean to people who may have been
exposed? Those are our constituents, and of course they are
seeing these news reports hour after hour. So is there anything
else you can tell me about that?
Ms. Arbes. The risk to Americans is very, very low. And the
number of patients who have been affected in the United States
remains very, very low. And we pledge to continue communicating
with the American people and with Congress about ways that
Americans can lower their risk.
Senator Wyden. So how is the administration communicating
that information to the local and State health officials?
Ms. Arbes. The Centers for Disease Control has a
streamlined process for communicating directly with State and
local health departments. I would have to defer to them on the
specifics of exactly how that happens.
Senator Wyden. Okay, why don't you get us that? Can you do
that within, say, by close of business today?
Ms. Arbes. Sure. No problem.
Senator Wyden. Okay. And what will the Department do to
keep us, the Congress--as you know, the Finance Committee and
the HELP Committee play key roles in this. What are you going
to do to keep us updated with respect to the agency's actions?
Ms. Arbes. There is an Interagency Task Force that has been
created, that Secretary Azar chairs. From the Legislative
Affairs division, we are closely coordinating with our
interagency partners. We speak to or email each other multiple
times a day. We are also in touch with the health committees of
jurisdiction. Secretary Azar, along with CDC Director Redfield;
the NIH lead for Infectious Disease, Tony Fauci; and Dr. Bob
Kadlec, who is the Assistant Secretary for Program Response,
were up here with their State Department and Homeland Security
colleagues, and Chief of Staff Mulvaney just this morning was
briefing all Senators.
This is the second of two briefings. They also had one last
week, and we also continue one-off communications with our
principals at----
Senator Wyden. Let me finish with the oversight issue. We
have worked with you before, and you have always been very
professional. So I want to start with that, because I want you
to know I would take great exception with your comment that the
Department has made tremendous accommodations--those were your
words--to work with us on our oversight requests.
The reality is very different. I mean we were stonewalled,
and I use that word specifically, for months and months with
respect to these child shelters. That took place even after we
narrowed our request.
And with respect to documents, we do not want to edit your
documents. We just want to be able to search them. So I will
let you wrap up this round, because I think you can tell that
both the chairman and I feel strongly about it.
What are you going to do to turn this situation around? For
example, what I would do--unsolicited, but my opinion--I would
say I am going to report to this committee when you guys make a
request. I am going to give you a status report every 2 weeks.
You know, we are not going to have the Finance Committee in the
dark, because I am very disappointed with respect to Lynn
Johnson and the team. I went over all these things for weeks
when she was being considered.
So what do you think of that? When we have an investigation
that we think is important, and it is bipartisan, will you
commit this morning to give us a status report every 2 weeks?
Ms. Arbes. Absolutely, sir. If that works for your team, we
are happy to do that.
Senator Wyden. Done. Thank you, Mr. Chairman.
Ms. Arbes. May I--if it is all right, Mr. Ranking Member,
may I respond?
The Chairman. Yes, please. Go ahead.
Ms. Arbes. So one thing I want you to know is, I took over
the leadership of Leg Affairs just this summer. And it was the
first time I had an opportunity to see what was happening in
our oversight division. And there have been great strides in
being much more responsive in the Department.
Specifically to the ORR letter, we just in November were
able to pull a career staffer who spends full time responding
to this letter. And I think you have seen now increased
document productions, and you have seen a deliberative response
to that letter.
And my sincere pledge to you is that kind of response will
continue.
The Chairman. Okay.
Because they are not here, I am skipping over three members
of the committee to go to Senator Whitehouse.
Senator Whitehouse. Thank you, Mr. Chairman. I have a
number of questions, and I would like to inquire if there will
be time for a second round in order to accommodate them?
The Chairman. I think with the number of people we have
here, we cannot have a second round. And I do have an 11:30
meeting I have to go to. Go ahead with your first round.
Senator Whitehouse. Okay; can we re-start me?
The Chairman. Yes. Start his 5 minutes over again.
Senator Whitehouse. So let me start with Ms. Arbes. First
of all, welcome. I thank you for the good meeting in my office.
If you will recall, in the office we discussed the problem of
what in HHS/CMS arcana we call the rural imputed floor. And as
you know, that drives reimbursement to hospitals and providers
in various areas.
And as you further know, when Ms. Verma came in as
Administrator, she unilaterally undid the rule for imputed
rural floor under which we had been operating. And here is the
effect that happened.
I showed you this map when we were there together. Here is
Rhode Island [indicating]. Here is Massachusetts. Here is
Connecticut. We are the geographically smallest State. So these
are not big differences.
If you go from Rhode Island across the border here to St.
Anne's Hospital, it is probably a 5-minute drive. If you go to
Charlton, it is maybe 15. If you go to Sturdy, maybe 15 or 20.
These are hospitals that are very close to our border.
Because of what CMS Administrator Verma did, these
hospitals in Massachusetts get 1.2868 as their wage index. We
get 1.03.
I have been unable to get a serious or a straight answer
out of Administrator Verma about this, why a 25-percent
differential is appropriate in hospitals that close to each
other?
And if you go from our east border to our west border, it
gets worse. Here is Westerly Hospital in Rhode Island. It is
less than 15 minutes down the road to Lawrence Memorial. Here,
the margin favoring the Connecticut hospitals is 1.3525. It is
a 30-percent differential.
Can you explain under what circumstances it makes sense for
hospitals within an hour's drive of each other to be reimbursed
with differentials in reimbursement as great as 25 or 30
percent?
[Pause.]
Senator Whitehouse. No, you cannot. I understand that. And
it is an unfair question to you, because this is not your job.
But to the point that the chairman and the ranking member made,
trying to get information or responses out of that
organization, out of Administrator Verma's CMS, is so
infuriating that I now have to be having this conversation with
you, a good and decent person who is doing a different job,
because I have no other opportunity.
And I have hospitals for which this really makes a
difference. It is a $25-million hit that one hospital took.
That to me is unfair. And Administrator Verma has got FOIA
requests from our hospital association that she has not
answered. If you could see to getting that done, that would be
helpful.
And what we were told, what we were told when we first
questioned this, knowing full well what the damage was going to
be, this unilateral decision that she made, what we were told
was, ``Oh, this is part of a broader reform of the imputed
rural floor.''
Ms. Arbes, we have seen no sign of any ``broader reform''
effort. I do not think we have been told the truth. I do not
think we have been treated fairly. And I think information
requests from hospitals that are affected by this have been
stonewalled by Ms. Verma.
As you can see, I am very angry about this. We are not
being treated fairly. There is no good and legitimate reason,
and fair questions are not being answered.
So could you, and whoever is here from the organization as
your minder and handler, please take that back? I spoke about
it with Secretary Azar just this morning in the briefing you
discussed on coronavirus.
Ms. Arbes. Yes, sir. You have my word, I will take it back.
Senator Whitehouse. Very well. And I think you kept my copy
of this map, did you not?
Ms. Arbes. Yes, sir, I did.
Senator Whitehouse. You have that. Very good.
So just a quick question for Mr. Kranbuhl, and then we will
come back to you. 45Q, the carbon capture regulation--this
thing passed us practically unanimously. Everybody is for it.
It has been sitting over there for 2 bloody years. Can you
please kick loose that regulation?
Mr. Kranbuhl. I appreciate the concern you have. I will do
my best to certainly take it up with our team, sir.
Senator Whitehouse. Can you explain to me why it takes 2
years to write that regulation?
Mr. Kranbuhl. I cannot. I am not on our tax policy team,
sir.
Senator Whitehouse. I think even if you were on your tax
policy team, you couldn't explain why it took 2 years.
Thank you.
The Chairman. The next person, I guess, is Senator Cortez
Masto.
Senator Cortez Masto. Good morning. Congratulations on your
nominations. Welcome to your families.
Ms. Arbes, I am going to give you a break right now and
will go to the other two gentlemen who are sitting next to you.
Let me start with Mr. Kranbuhl. Last September, the
Treasury Department released its report on housing finance
reform. If you are confirmed to serve as Assistant Secretary
for Financial Markets, will you implement the recommendations
in the report that capital markets should still provide long-
term fixed-rate financing for mortgages?
Mr. Kranbuhl. In our report, we recommend that there should
be legislative guarantee. Obviously, if that is not in place,
we believe that the existing support should remain in effect
through the Preferred Stock Purchase Agreements.
Senator Cortez Masto. So that is a ``yes''?
Mr. Kranbuhl. We believe that should continue to exist and
are committed to doing so, yes.
Senator Cortez Masto. Okay; and if you are confirmed, will
you restrict Fannie Mae and Freddie Mac financing for vacation
homes, investment properties, and cash-out refinances?
Mr. Kranbuhl. In our report, we recommended that additional
study be done on a range of these topics, but we have not made
a recommendation to----
Senator Cortez Masto. And what is the time frame for that
study? And when can we expect a report back?
Mr. Kranbuhl. Actually, we recommended that FHFA conduct
that study. So I do not have a time frame for the agency's
work.
Senator Cortez Masto. Okay. And the Treasury housing
finance report recommended alternative approaches to the highly
successful National Housing Trust Fund, which has been
beneficial to the State of Nevada. The Housing Trust Fund
investments have provided housing for low-income elderly
people, and low-income families in Nevada.
If you are confirmed, will you recommend any changes to the
National Housing Trust Fund? And if so, what would you
recommend?
Mr. Kranbuhl. In our report, we did not make any specific
recommendations on altering the Housing Trust Fund or the
Capital Magnet Fund. We recommended improved approaches to
affordable housing goals, and to working toward greater
accountability to ensure their success, to demonstrate their
success.
We look forward to working with you, and continue to work
with others on coming up with ideas on ways to approach this
challenging topic.
Senator Cortez Masto. Thank you.
Dr. Fichtner, in 2017 the Social Security Advisory Board
held a roundtable with experts to solicit ideas for longer-
range research and program evaluations that the agency might
conduct.
One of the recommendations was to explore the sources of
economic insecurity in retirement, including fraud experienced
by seniors. Unfortunately, plenty of that fraud comes in the
form of Social Security scams. Individuals have filed nearly
73,000 reports with the Federal Trade Commission about Social
Security imposters in the first 6 months of 2019. That amounts
to about $17 million in reported losses.
Do you think the Advisory Board should be taking a closer
look at new and better ways that SSA could stem fraud related
to the impersonation of its employees?
Dr. Fichtner. The short answer is, yes, Senator. And good
morning. Thank you for being here. I appreciate that. But the
Advisory Board should definitely help the administration, the
agency, on what we can do to prevent fraud, waste, and abuse,
including obviously imposters.
One of the things I was glad to see was, I went on the
Advisory Board's website and they did have a warning to be
careful of frauds that are going on right now. So there is more
they can do, and, if confirmed, I will do----
Senator Cortez Masto. Thank you; and I would like to work
with you to the extent possible with the Board. This is an area
that I have worked on in the past, and I think it is something
that needs to be addressed. So I appreciate your comments.
Let me ask you this. What would be your top research
priorities for the Board?
Dr. Fichtner. So one is, obviously, reducing improper
payments, fraud, waste, and abuse, and that includes identity
fraud.
The second would be the research agenda programs, including
demonstration projects for those on SSDI whom we might be able
to help get back to work.
A third would be IT modernization. The agency still has
millions of lines of COBOL that it uses for----
Senator Cortez Masto. Say that again.
Dr. Fichtner. Millions of lines of COBOL. The agency has to
train people outside of Baltimore to keep up their systems. It
is like a form of indentured servitude for those who actually
code these programs. They have jobs for life right now. It is
still a process to move those systems over to more modern code.
So IT modernization is definitely one of the top priorities
we would help the agency with on the Board.
Senator Cortez Masto. Thank you; and again, congratulations
on your nominations.
Dr. Fichtner. Thank you, Senator.
The Chairman. Senator Casey?
Senator Casey. Thanks, Mr. Chairman. I want to start this
morning with Ms. Arbes--Medicaid in particular. This is a
program that, frankly, I think until recently a lot of
Americans may have under-appreciated. But until the threats to
Medicaid increased and the proposals to cut it, to change it,
on some days to even obliterate a lot of it, I do not think
many Americans had a full sense of how important it is to the
country.
It is a program that I think speaks to our values, about
how we provide health care for children, many of whom, most of
whom are in urban and rural communities. It is a program that
makes it possible for a lot of hospitals to stay open,
especially in rural America.
I represent a State that has 67 counties, but 48 are
considered rural. So Medicaid is not just about some distant
health-care program, it is about health care and jobs and the
viability of hospitals.
It obviously plays a determinative role in whether or not
someone can get into a nursing home. Most Americans are not
wealthy enough to pay for that care. Absent Medicaid, it cannot
happen. It will not work.
It is of great significance to people with disabilities,
especially children. And I do not understand, and will never
understand, the obsession by some to cut or to change it.
Now we have a proposal to block-grant Medicaid. I think it
is--I do not think it is lawful, but it is obviously an
approach the administration has taken. I have been asking for
information by way of letters to the administration. I have
written four, on four different occasions, to request more
information from the administration, whether it is from
Secretary Azar or Administrator Verma.
The first document I saw that was relevant to this question
of block grants was the HHS announcement. The press release in
this case was detailing HHS's, quote, ``healthy adult
opportunity'' guidance. A very strange name for what was being
proposed.
So I would ask you--and I know you have worked in the
Senate. You know how important this is to the chairman and
others, to make document production and the availability of
documents and information a high priority.
So I would ask you to commit to producing the documents
that are responsive to my requests.
Ms. Arbes. Sir, I am happy to work with CMS, to the extent
that we are able. But it is--we will be--at the end of the day,
the documents are with CMS, and we will work very closely with
them in partnership to be as responsive as we can be.
Senator Casey. Well, just to give you a sense of the
letters: March of 2019, October of 2019, February of this year.
You, I think, understand this, having done the work that you
have done. I hope we would be able to sit down and work out an
agreement as to how to get those documents.
It seems to be, in my judgment, at least in the work that I
do, an administration-wide problem. It is especially egregious
when you are talking about vulnerable Americans, vulnerable
Pennsylvanians, who are served by this program.
This is not some, you know, ``theoretical'' government
program. This is about people's lives. And I hope you would
approach it that way, were you to be confirmed.
Secondly, in the context of Medicaid more broadly, but in
particular managed care, I have written to Administrator Verma
asking that CMS investigate a particular company's conduct in
terms of how it provided managed care, and provide documents
detailing how CMS dealt with this particular case, which
involved the permanent injury to a child.
I had an opportunity to sit down with Administrator Verma
last year, late last year, and we might have--and I think we
do, based upon that meeting--some common ground. But I have not
received the information that I need that is responsive to
those questions about Medicaid managed care, an issue that cuts
across geographic boundaries and different areas of the
country.
So I would ask you, again, to commit to producing the
documents that I requested in the context of Medicaid managed
care.
Ms. Arbes. Sir, I am happy to follow up with the
Administrator and her team and check on the status and see
where things stand.
Senator Casey. Let me just--I will submit a question for
the record for Dr. Fichtner regarding Social Security, but I
will do that in writing and ask that you respond. Thank you.
Dr. Fichtner. Yes, sir.
The Chairman. Senator Brown is the next one.
Senator Brown. Thank you, Mr. Chairman.
I join--I know Senator Cortez Masto has strong feelings
about this too, on the Banking Committee. And, Mr. Kranbuhl, I
want to talk to you about that.
If you are confirmed, a key piece of your portfolio will be
housing finance policy, including GSE reform, as you know. I
understand you are involved in developing the Treasury
Department's housing finance reform report. In the Banking
Committee we held several hearings last year on housing
finance, Senator Crapo and I did.
We heard from a number of stakeholders. There was consensus
around a few key principles. They told the committee that
housing reform, finance reform, must preserve access to the
affordable 30-year fixed-rate mortgage; ensure a broad,
national market; and have GSEs that function like utilities,
with limits on returns.
They provide a government backstop. They treat lenders of
all sizes equally. Essentially, they preserve the duty to serve
in affordable housing goals. They preserve the family market.
They boost funds for affordable housing.
We know we face in this country an affordable housing
crisis. A quarter of renters--I think you know these numbers,
but they are so important--a quarter of renters spend half
their income on housing, and home ownership is out of reach for
more and more people in Rhode Island, and Nevada, and
Louisiana, and Washington State, and all of us.
We have huge racial disparities that are getting worse.
Black home ownership rate is back to the level it was,
unbelievably, before we outlawed housing discrimination. It is
back to those levels.
I am concerned the proposal you helped author will make
home ownership and rental housing even more expensive and less
available for families across the country. The affordable
housing goals and the duty to serve ensure that GSEs are
providing access to mortgage loans and affordable rental
housing for low- and
moderate-income borrowers, and in hard-to-serve markets like
rural areas, not just for suburban homes and high-cost
apartments.
In its report that you had a role in, apparently, Treasury
states that, quote, ``The GSEs' statutory mandate should be
reform''; that ``GSEs' statutory affordable housing goals
should be replaced.''
But when Secretary Mnuchin testified in September, he told
the Banking Committee that ``Treasury supports the duty to
serve, as well as the affordable housing goals.'' That is a
quote, the opposite of what is in your report.
So we are clear, does Treasury--clarify this, please. Does
Treasury support maintaining a duty to serve under-served
markets, contributions to affordable housing funds, and the
GSEs' affordable housing goals in any housing finance system?
What is its position?
Mr. Kranbuhl. Thank you for your question. I appreciate
your passion on the topic. Our position is that we believe that
these goals are all important; that they need to be revised,
reformed to allow for greater accountability. But we recommend
no cuts to any of these--any of these positions, any of these
goals.
Senator Brown. So ``important''? Does that mean essential?
Everything is important in this town, and in this government,
and in this Treasury Department. So does that mean duty to
serve, affordable housing goals, are those essential to what we
ultimately agree on? Or are they just ``important''?
Mr. Kranbuhl. Well, I believe they are essential to the
ongoing accessibility of affordable housing. Our recommendation
recommends that these be reformed so they can, as you said,
make more progress than has been made thus far.
Senator Brown. Thank you. We will continue to follow up and
watch, and thank you for that.
One other issue. I have found something that is really
troubling: the involvement of private equity in our housing
system. Across the country, we have seen private equity
companies buying up single-family homes, turning them into
rental properties, leaving them vacant, I assume for tax
reasons in some cases.
They were especially interested in buying up manufactured
housing communities and apartment buildings where they raise
rents and force out tenants. And if you are in manufactured
housing, you are in what we call a ``trailer park''--if you are
in one of those places and a private equity firm buys that park
and dramatically raises rents, you cannot really move your
house very easily at any reasonable kind of cost.
As part of its work on housing markets and affordable
housing, has Treasury been tracking the breadth and scope of
private equity investors, what they are doing, what they are
considering, as they buy up broad swaths of communities? Has
Treasury monitored private equity's impact on housing
affordability and quality?
Mr. Kranbuhl. Treasury is watching a range of impacts on
affordable housing in looking for solutions to improve the
crisis we face. Any recommendations you have to help us in that
process would be welcome.
Senator Brown. Okay. Thank you for the offer. What are you
doing about--are you personally aware, or have you heard
conversations among the right people at Treasury about a
concern about them buying these manufactured housing places?
Mr. Kranbuhl. We are aware of what you are describing, sir.
We certainly appreciate the current law requiring duty to serve
manufactured housing.
Senator Brown. So if you--do you recognize it as a serious
problem?
Mr. Kranbuhl. I would have to learn more about the specific
challenges it presents, but I certainly appreciate that it
could be a challenge.
Senator Brown. Could you outline, by letter to us, sort of
an evaluation of how serious it is with recommendations about
what you could do at Treasury, or what we could do in Congress?
Mr. Kranbuhl. I would be happy to work with you further to
answer any questions you have on this, and work with you and
your staff to try to make sure this problem is addressed.
Senator Brown. A year ago in the chairman's home State, I
met with a number of families that had had this happen to them,
and their rents were going from, I recall, upper 200s to $400,
over a year or so. And what that means to somebody who is
living there who may have spent $60,000 for their home, have
the plot in the housing community, and then see their rent
increase by 50 percent when they are already spending 50
percent of their income on housing is, it is just devastating
to the communities. And we have to find a way to fight back,
and we look to Treasury for leadership.
Thank you.
The Chairman. Senator Cassidy?
Senator Cassidy. Thank you.
I think I have had a chance to work with all three of you.
I am sorry that Senator Casey is not here, Ms. Arbes, because
he would be reassured regarding the Medicaid program. It is
voluntary. A State does not have to do it. It is only for the
expansion population. And it begins to put in accountability
measures that are sorely lacking in Medicaid right now.
And so I think we will find better outcomes for those
folks.
Mr. Kranbuhl, I am always favorably disposed to somebody
whose parents are both physicians, as I am married to a doctor
and I too am one, but let me specifically ask: I recently
learned that nearly $26 billion in matured unclaimed debt
presently sits on the books at Treasury. These funds are
related to the fact that Americans have made the patriotic
decision to purchase U.S. Savings Bonds backed by the full
faith and credit of our government.
The Senate is currently considering legislation introduced
by my Louisiana colleague, Senator Kennedy, to reunite these
funds with their owners or heirs.
Can you tell me more about the work Treasury is doing via
online tools to help Americans locate their mature savings
bonds? And remember, I have one worth $50 for my son, and I
cannot find the sucker. So what do we do about that?
Mr. Kranbuhl. I appreciate the question. It is something I
know we are working closely with Senator Kennedy and his team
on. Our Office of Fiscal Management is working to create a
digital platform, and I look forward to working with you more
on that in any way I can help.
Senator Cassidy. Do you think this would be enough to
resolve the issue? There are over $337 million in Louisiana
owed to my constituents, and unless they know to look on that
online platform--you know, if mama bought it and mama died,
they are not going to think about that.
So is the online tool going to be enough?
Mr. Kranbuhl. I am not certain it will be enough, but we
look forward to coming up with any ideas you might have and
ways we can help to improve that.
Senator Cassidy. So I take that as a pledge, if you will,
to work with me and Senator Kennedy as regards how to approach
this?
Mr. Kranbuhl. Yes, sir.
Senator Cassidy. Thank you.
Dr. Fichtner, I thought that Social Security had already
updated their IT systems, having, by the way--speaking of
giving you more about my life again than you care to know--been
the subject of identity theft, and yet you tell me there are a
million lines of COBOL. So what about all this money we have
already given you, so to speak? What has happened to it? And
how much inadequacy is there still there?
Dr. Fichtner. Senator, thank you. Information technology is
an ongoing improvement process. As you know, the Social
Security Administration is very, very large and has a lot of
records, including medical records. I am not sure about today,
but when I was there 10 years ago Social Security was the
largest repository of electronic medical records in the world.
The information volumes coming into the agency are large,
and those systems have to be updated in priority fashion. And
they are still trying to update them. And that includes
websites. That includes the ability for online filing,
processing claims, processing online requests for disability,
for retirement. That is an ongoing process.
The money has been spent wisely. I know the current
Commissioner has been talking to you about the agency's budget
needs. And I am also looking forward to seeing the agency's
budget request.
Senator Cassidy. So let me ask you this, then. There is one
of your colleagues, Social Security colleagues, or future
colleagues, who said recently on the House side she is
concerned that Social Security is used as a unique identifier
for medical records, because it gives one number which accesses
both your health record as well as your financial records.
And that one number used for both is double jeopardy, if
you will. Implicit in that is that she said if we were going to
improve the privacy that Americans have, we need to have one
identifier for one, another identifier for the other.
What are your thoughts about that?
Dr. Fichtner. I completely agree, Senator. And to Senator
Cortez Masto's earlier comment on identity theft and fraud, one
of the issues that Social Security is helping to work with
Medicare on at HHS now is moving over to a Medicare number that
is not the Social Security number, so there can be two separate
numbers. So I think that is very important.
Senator Cassidy. And would that Medicare number be only
once you become eligible for Medicare? Or would that number be
one that you would have that would protect your privacy of your
medical records throughout your life?
Dr. Fichtner. That I actually do not know, Senator. It is a
very good question, and I will look into it. But I think you
make a very good point, that there could be an issue of having
a separate health care record number.
Of course there are privacy concerns that people have about
having national identity numbers in general. There was always a
concern----
Senator Cassidy. So effectively Social Security is a
national identifier number now, it has just taken you in two
directions, and we only want it to go in one. Correct?
Dr. Fichtner. That is correct, Senator. And there has been
a lot of concern that Social Security has become a national
identifier, and that is one of the problems we have when we're
thinking about fraud, waste, abuse, and identity theft.
Senator Cassidy. So if I am going to keep an insurance
company--or we should not say an insurance company, but someone
less reputable, from delving into a--they steal my Social on
the dark web. Now they can get into my medical records, and
maybe into my genetic code, which gives implications about my
family members. We need to have a separate unique identifier at
least to increase the probability of separation.
Dr. Fichtner. That is correct. I would also say that,
regardless of what number we use and how many numbers we have,
we have to make sure those numbers are secure.
Senator Cassidy. Got it. Thank you. I yield back.
The Chairman. Before I call on Senator Cantwell, this is
how we will end this meeting, after Senator Whitehouse is done.
Senator Wyden and I are going to put our questions for a
second round in the record for you to answer in writing. And
then one sort of admonition here. Speaking for both Senator
Wyden and me, for Ms. Arbes, I hope you have taken home from
this meeting that we are very serious about getting this
oversight stuff wrapped up in a way that is information that is
searchable, sortable, so we can do our work right. And there is
no reason for this to go on the months that it has.
Senator Cantwell?
Senator Cantwell. Thank you, Mr. Chairman. And
congratulations to all the nominees.
I would like, Mr. Kranbuhl, to go back to housing, and
affordable housing, if I could. If you are confirmed as
Assistant Secretary for Financial Markets, one of the key
responsibilities will be housing finance and GSE reform. And as
my colleagues said, we are in the middle of an affordable
housing crisis, not just for low-income people but middle-class
families as well, particularly in the Pacific Northwest.
This is practically every corner of our State. Housing
prices have been soaring, and people are priced out of the
market. My colleague, Senator Young, and I on this committee
have been working to improve the Low-Income Housing Tax Credit
so that people can buy affordable housing. Treasury's recent
housing reform plan would restrict access for certain types of
loans, including the high-balance loans, which are the only
types loan borrowers can afford in markets like Seattle. It
also proposes to restrict types of loans that make it possible
for Fannie and Freddie to offer affordable pricing to low- and
moderate-income buyers.
So how would you increase affordability?
Mr. Kranbuhl. That is something we are working closely with
our colleagues at HUD to explore. The President has established
a White House Council on Affordable Housing to study these
issues, and we are actively engaged at Treasury on the topic.
I look forward to any ideas you might have to improve the
access to affordable housing. As you mentioned, it is a crisis
that needs to be addressed as best as possible.
Senator Cantwell. Well, with that layup, I will tell you
that the best way to do it is to increase the amount of capital
for the affordable housing tax credit. Ninety percent of the
federally financed affordable housing that gets built in the
United States gets built with the tax credit.
So if we do not increase the amount of capital available to
that tax credit, we are not going to get out of this problem
very quickly. And our previous hearings in this committee have
distinguished from testimony that we are now paying 25 percent
more for the population because they do not have affordable
housing.
So to me it is an economic issue of: make this investment,
stimulate the economy, and then reduce the cost that these
people are bringing. We actually have hospitals in our State
that are now buying affordable housing opportunities because it
is cheaper for them to help finance affordable housing than to
see this rotation of patients come through their hospitals.
That is how dramatic the problem is.
So do you think increasing the affordable housing tax
credit is one of those options?
Mr. Kranbuhl. I think that we should explore all options,
including looking at the potential impact that the Low-Income
Housing Tax Credit could have on improving the situation.
Senator Cantwell. Well, one of the things that we could
easily do is fix the 4-percent floating rate that I think makes
the program less effective by creating a 4-percent floor. So we
can get that information to you, and you can look at that and
give us some feedback. But that might be a very cost-effective
way to just immediately provide 20 percent more housing in the
market.
But I am glad to hear my colleague, Senator Brown, talk
about the problems in Ohio. This is not just a Seattle problem
because we have a hot economy; this is a problem that is based
on demographic trends, according to Harvard analysis. I can
tell you, I have been a participant in so many reports
released. This is a huge shift.
It is an aging population that does not have enough money
for affordable housing. It is returning veterans who do not
have enough affordable housing. It is workplace market rate-
based housing too. It is the devastation that we have never
recovered from since the recession, and the lack of supply. It
is really a lack of supply issue that we have to correct.
So I hope that we can work with you and, Mr. Chairman, I
hope at some point in time we can have a hearing on this as
well--the possibilities of affordable housing solutions--
because it really is facing so many parts of our State. And I
can say particularly from an agricultural perspective, it is
hard to even get agriculture to work for us without affordable
housing. So I hope we can address this issue.
The Chairman. Thank you. Now, Senator Whitehouse.
Senator Whitehouse. Thank you.
The Chairman. For 5 minutes. Is that okay?
Senator Whitehouse. Sure. That should be fine.
Mr. Kranbuhl, as you know, we talked in my office about the
financial sector ringing right now with warnings about climate
change financial impacts. And I have brought this to the
attention of my colleagues in the July 18, 2018 letter that I
gave a copy of to you when we met. I sent another letter in
December of 2019 to all the members of the Senate Banking
Committee warning of these.
I have provided every colleague the binder that I gave to
you of reports relating these various economic risks. They
include--I will just go through a couple right now. The Bank
for International Settlements' Green Swan Report says that
central banks, regulators, and supervisors have increasingly
recognized that climate change is a source of major systemic
financial risks.
Is the phrase ``major systemic financial risks'' one that
is a serious phrase in the financial world?
Mr. Kranbuhl. It is a serious phrase, yes, sir.
Senator Whitehouse. It goes on to say, ``Climate
catastrophes are even more serious than most systemic financial
crises,'' and that ``exceeding climate tipping points could
lead to catastrophic and irreversible impacts that would make
quantifying financial damages impossible.''
``Catastrophic and irreversible'' is self-evidently
dangerous language, is it not?
Mr. Kranbuhl. Yes, sir.
Senator Whitehouse. Blackrock recently wrote to the
financial community that in the near future, and sooner than
most anticipate, there will be a significant reallocation of
capital. Indeed, they forecast an entire change in the way
financial markets operate, did they not?
Mr. Kranbuhl. Yes, sir.
Senator Whitehouse. Yes, they did.
McKinsey has put out a report: ``Climate change could make
long-duration borrowing unavailable, impact insurance costs and
availability, and reduce terminal values and trigger capital
reallocation asset repricing.''
Are those also significant warnings?
Mr. Kranbuhl. Yes, sir.
Senator Whitehouse. The Bank of England has warned that
``the combination of the weight of scientific evidence and the
dynamics of the financial system suggest that in the fullness
of time climate change will threaten financial resilience and
longer-term prosperity, and that, in particular, investments in
fossil fuels and related technologies may take a huge hit.''
And it is not just the Bank of England. Thirty-four central
bank presidents got together to warn the financial community,
and I quote here, ``Estimates of losses are large, and range
from $1 trillion to $4 trillion when considering the energy
sector alone, or up to $20 trillion when looking at the economy
more broadly. Average global incomes may be reduced by up to a
quarter by the end of the century.''
Are those serious warnings as well, from 34 central bank
presidents?
Mr. Kranbuhl. Yes, sir.
Senator Whitehouse. Cambridge University recently proposed
that the existence of a carbon bubble could discount global
wealth by U.S. $1 to $4 trillion, a loss comparable to the 2008
financial crisis.
Freddie Mac, which is not an environmental organization,
described, just on coastal property value loss, that the
economic losses and social disruption may happen gradually, but
they are likely to be greater in total than those experienced
in the housing crisis and the Great Recession.
And I did not have time to get it made up, because it just
came out, but a January 2020 report from the Stanford Graduate
School of Business notes that the financial risks from climate
change are systemic and singular in nature, and I quote here:
``Global economic losses from climate change could reach $23
trillion, three or four times the scale of the 2008 financial
crisis.''
For those of us who weathered that, that is a pretty
serious warning, is it not?
Mr. Kranbuhl. Yes, sir.
Senator Whitehouse. So my question to you is, given that
even Fed Chairman Powell has said, ``I think the public has
every right to expect, and will expect, that we will ensure
that the financial system is resilient and robust against the
risks from climate change,'' what are you doing at Treasury? It
seems to me you are ignoring these warnings. And if so, why?
And I would be delighted to have you take time answering it
now, but I also would make that a question for the record so
that I get as full and fair and complete an answer as I can.
Mr. Kranbuhl. I appreciate your passion on this topic, and
this important issue----
Senator Whitehouse. It is not just my passion. It is
frightening warnings from people who know their stuff and are
not even environmentalists.
Mr. Kranbuhl. As Secretary Mnuchin said, this is--climate
change is one of the range of important environmental issues
that becomes an economic issue because there is no question
that environmental issues impact our economy.
I hope that we can all work together to help solve this
challenging issue.
Senator Whitehouse. Well, let us take that as a QFR then,
if I may, so I can get a more specific answer to my specific
questions.
One, does Treasury take this seriously? Two, what
demonstrations are there that the Treasury takes this
seriously? Three, is Treasury ignoring this problem? Four, is
Treasury ignoring this problem because of pressure from the
fossil fuel industry? And if none of that is true, what are you
doing to protect our financial system against the catastrophes
that are so clearly warned of by so many sources? Fair enough
question?
Mr. Kranbuhl. Yes, sir.
Senator Whitehouse. Thank you.
The Chairman. And thank you, Senator Whitehouse.
In closing, obviously I should thank you once again for
your attendance and participation today, for the members who
were here as well as for you folks who are on the panel, the
nominees. I thank you for your willingness to serve in these
critical roles that you are up for.
And for the committee staff and members, for questions to
be submitted for the record, I ask that that be done by 5
o'clock Friday, February 7th.
Meeting adjourned. Thank you all very much.
[Whereupon, at 11:26 a.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Prepared Statement of Sarah C. Arbes, Nominated to be Assistant
Secretary for Legislation, Department of Health and Human Services
Chairman Grassley, Ranking Member Wyden, members of the committee,
thank you for having me here today. It is a privilege to appear before
you as President Trump's nominee to serve as Assistant Secretary for
Legislation at HHS. I would also like to thank Secretary Azar and the
many others at HHS who have helped with my nomination.
Here with me today is my family--my husband Justin and our two
children, Reid and June, as well as my parents, Craig and Janie
Cudworth. They are my rock, and without their support, I would not be
where I am today. Finally, I wish to recognize the amazing HHS
legislative affairs team who work tirelessly every day to fulfill the
HHS mission to enhance and protect the health and well-being of all
Americans in part by serving this great institution. They are the best
team in Washington, and I'm proud to call each and every one of them
colleagues.
I have to tell you that it's surreal sitting on this side of the
dais. After nearly a decade as a Senate staffer, I fondly remember
sitting where your staff sit now, giving advice on hearing strategy,
member interests, and ways to advance your policy goals. It's those
formative years that have helped to prepare me for the role I am
seeking your support for today.
My experiences in both the majority and minority under Chairman
Alexander, Leader McConnell, and Senator Jim Talent taught me about
listening to constituents, the power of bipartisanship, and the
importance of precedence. I owe each of them a debt of gratitude for
the unique lessons of leadership I learned and the opportunity to serve
alongside them as they worked tirelessly for the great States of
Tennessee, Kentucky, and Missouri.
The Office of the Assistant Secretary for Legislation plays a
critical role in ensuring the communication between the executive and
legislative branches that our Founding Fathers envisioned. If
confirmed, it would be my job to ensure you receive the technical
assistance you need to draft legislation and answers to your questions
about the Department's programs. Additionally, it is the responsibility
of this position to ensure you are informed in a timely manner of the
administration's initiatives and policies so that, together, we can
serve the American people better.
Over the last 3 years, I have been the principal deputy in HHS
legislative affairs. In this role, I am the policy lead for our team.
When I think back to all of the issues that the Department has
collaborated with this committee on in that time, I realize how much we
have accomplished together.
The list is long.
If you'll indulge me a moment, I'll name just a few. We are turning
the tide in the opioid epidemic, lowering the cost of prescription
drugs, providing relief to Americans who suffered after Hurricanes
Harvey and Irma, protecting American medical research from foreign
threats, ensuring quality nursing home care, helping more foster
children find their forever homes, and strengthening Medicare.
If confirmed, I pledge to continue my commitment to the close
collaboration between HHS, this committee, and Congress that will help
more Americans live longer, healthier, happier lives.
Thank you again for the opportunity to be here today. I look
forward to your questions.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Sarah Cudworth Arbes
(married name), Sarah Melice Cudworth (maiden name).
2. Position to which nominated: Assistant Secretary for Legislation,
U.S. Department of Health and Human Services.
3. Date of nomination: October 30, 2019.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: July 14, 1979, in Richmond, VA.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list all secondary and higher education institutions,
dates attended, degree received, and date degree granted):
Syracuse University (Syracuse, New York); attended 2004-2005,
master of public administration granted July 1, 2005.
The University of Oklahoma (Norman, Oklahoma); attended 1997-
2001, bachelor of arts in journalism granted May 12, 2001.
USDA Graduate School (Washington, DC); attended 2004, no degree
received.
Carl Albert State College (Poteau, Oklahoma); attended 1998-
1999, no degree received.
Louisiana School for Math, Science, and the Arts (Natchitoches,
Louisiana); attended 1995-1997, high school diploma granted May
24, 1997.
Franklinton High School (Franklinton, Louisiana); attended
1994-1995; no degree received.
Bowling Green School (Franklinton, Louisiana); attended 1993-
1994, no degree received.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment for each job):
June 2019-present; Acting Assistant Secretary for Legislation,
U.S. Department of Health and Human Services, Washington, DC.
March 2017-present; Principal Deputy Assistant Secretary for
Legislation, U.S. Department of Health and Human Services,
Washington, DC.
February 2016-March 2017; vice president (health and retirement
policy), Business Roundtable, Washington, DC.
February 2013-January 2016; Deputy Health Policy Director, U.S.
Senate Committee on Health, Education, Labor, and Pensions
(Chairman Lamar Alexander (R-TN)), Washington, DC.
January 2011-February 2013; Legislative Assistant, U.S. Senator
Mitch McConnell (R-KY), Washington, DC.
January 2010-January 2011; vice president, government affairs,
Retail Industry Leaders Association, Arlington, VA.
July 2007-December 2009; senior director, government affairs,
Retail Industry Leaders Association, Arlington, VA.
January 2007-July 2007; Legislative Assistant (Schedule C
Appointee), U.S. Department of Labor, Washington, DC.
November 2006-January 2007; Legislative Correspondent and
Senior Constituent Caseworker, U.S. Senator Jim Talent (R-MO),
Washington, DC.
February 2003-November 2006; Caseworker, U.S. Senator Jim
Talent (R-MO), Washington, DC.
October 2002-February 2003; media planner, Lyons and Sucher
Advertising, Arlington, VA.
September 2002-October 2002 (approx.); media assistant, Earle
Palmer Brown, Bethesda, MD.
Fall 2002 (approx.); waitress, McCormick and Schmick's Seafood
Restaurant, Reston, VA.
December 2001-September 2002; E. James White Communications,
media assistant, Herndon, VA.
Off and on employment between 2001-2004 (approx.); sales
associate, Bicycle Pro Shop, Washington, DC.
November 2001-December 2001; intern, U.S. Senator Tim
Hutchinson (R-AR), Washington, DC.
August 2001-October 2002; bartender, Mike's American Grill,
Springfield, VA.
June 2001-August 2001; sales associate, Village Cycle Center,
Chicago, IL.
10. Government experience (list any current and former advisory,
consultative, honorary, or other part-time service or positions with
Federal, State, or local governments held since college, including
dates, other than those listed above):
None.
11. Business relationships (list all current and former positions held
as an officer, director, trustee, partner (e.g., limited partner, non-
voting, etc.), proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, other business enterprise, or
educational or other institution):
None.
12. Memberships (list all current and former memberships, as well as
any current and former offices held in professional, fraternal,
scholarly, civic, business, charitable, and other organizations dating
back to college, including dates for these memberships and offices):
2017-present; participant, ASIA Families.
2002-2003; board member, the OU Alumni Capital Club.
2000-2001; chair, Union Programming Board, the University of
Oklahoma.
1997-1999; chapter president and founder, OU Circle K
International.
October 1997-present; member, Delta Gamma Fraternity.
13. Political affiliations and activities:
a. List all public offices for which you have been a candidate
dating back to the age of 18.
None.
b. List all memberships and offices held in and services
rendered to all political parties or election committees,
currently and during the last 10 years prior to the date of
your nomination.
2014 Election Cycle, phone bank volunteer, National Republican
Senate Committee (NRSC).
October 2014 (one week), campaign volunteer, Mitch McConnell for
U.S. Senate.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years prior to the date of your nomination.
None.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement received
since the age of 18):
The Professional Scholar Award, Maxwell School of Citizenship
and Public Affairs, Department of Public Administration,
Syracuse University.
10-year Federal service recognition.
15. Published writings (list the titles, publishers, dates, and
hyperlinks (as applicable) of all books, articles, reports, blog posts,
or other published materials you have written):
Cudworth, Sarah. (2007). ``The U.S. Coast Guard: Land-Based Law
Enforcement Authority and Effective Coordination With State and
Local Government.'' Student Association of Terrorism and
Security Analysis Journal on Terrorism and Security Analysis,
Volume 2, Pages 37-43.
16. Speeches (list all formal speeches and presentations (e.g.,
PowerPoint) you have delivered during the past 5 years which are on
topics relevant to the position for which you have been nominated,
including dates. Provide the committee with one digital copy of each
formal speech and presentation):
I did not prepare a PowerPoint presentation or a written speech
for any of the following public speaking engagements:
January 23, 2019; Role: Presenter; Organizer: Tarplin, Downs,
and Young; Audience: Clients of the organization; Topic:
Informal presentation of HHS priorities on Capitol Hill.
October 10, 2018; Role: Presenter; Organizer: America's
Physician Group; Audience: Board of Directors--2018 Colloquium;
Topic: Informal presentation of HHS priorities on Capitol Hill.
May 2017; Role: Presenter; Organizer: American Benefits
Council; Audience: Policy Board of Directors Meeting; Topic:
Presentation of HHS priorities on Capitol Hill.
September 14, 2015; Role: Panelist; Organizer: Ripon Society;
Audience: Members of the Ripon Society; Topic: Discussion of
Senate HELP Committee health-care policies in Congress.
May 19, 2015; Role: Presenter; Organizer: Enquiron, The
Partnership to Fight Chronic Disease and Population Health
Alliance; Audience: Webinar; Topic: Discussion of workplace
wellness legislation in Congress.
April 23, 2014; Role: Presenter; Organizer: Self-Insurance
Institute of America, Inc.; Audience: Legislative/Regulatory
Conference; Topic: Senate Republican staff perspective on
health-care reform.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
I have over a decade of experience serving four U.S. Senators
and three cabinet Secretaries. These positions have afforded me
a deep reverence for and understanding of the integral
relationship between the executive and legislative branches of
government, which is critical to the success of any agency's
Assistant Secretary for Legislation (ASL). From constituent
casework and congressional oversight to witness hearing
preparation and legislative technical assistance, the ASL
ensures Congress gets what it needs to govern while the
agency's mission is advanced. I have legislative and executive
branch experience in fulfilling all of these important
functions.
Additionally, I am a proven leader. In my current role, I
manage a team of two dozen employees--both career and political
staff--with a multimillion-dollar budget. I have established
and refined processes that ensure the agency and the Congress
are served in a timely, responsive manner, and that every
member of the team understands the mission and feels like a
valuable contributor toward the mission.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections (including participation in future
benefit arrangements) with your present employers, business firms,
associations, or organizations if you are confirmed by the Senate? If
not, provide details.
I am currently serving as the Acting Assistant Secretary for
Legislation and Principal Deputy Assistant Secretary for
Legislation at HHS. If confirmed, I will become the Assistant
Secretary for Legislation at HHS. I am not currently employed
by any other entity.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any current and former investments, obligations,
liabilities, or other personal relationships, including spousal or
family employment, which could involve potential conflicts of interest
in the position to which you have been nominated.
My spouse and I are currently invested in the following funds:
(1) SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and
(2) Vanguard Energy ETF (VDE). Upon re-entering Federal
service, I signed an ethics pledge that we would keep the value
of these funds below the Office of Government Ethics'
regulatory exemption level for sector funds--an agreement which
we have honored.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years (prior to the
date of your nomination), whether for yourself, on behalf of a client,
or acting as an agent, that could in any way constitute or result in a
possible conflict of interest in the position to which you have been
nominated.
None.
3. Describe any activity during the past 10 years (prior to the date
of your nomination) in which you have engaged for the purpose of
directly or indirectly influencing the passage, defeat, or modification
of any legislation or affecting the administration and execution of law
or public policy. Activities performed as an employee of the Federal
government need not be listed.
I was employed as a lobbyist at the Retail Industry Leaders
Association (RILA) between the fourth quarter of 2009 and the
fourth quarter of 2010, and at Business Roundtable (BRT) in
calendar year 2016. For the committee's convenience, I have
included in this submission RILA and BRT's Form LD-2s
(Attachment 1) and below is a summary of the bills I lobbied on
during the reporting period:
2009 Q4:
Health
Proposals related to Employee Retirement Income Security Act
(ERISA).
S. 391, Healthy Americans Act.
S. 1099/H.R. 2520, Patients Choice Act.
S. 1679, Affordable Health Choices Act.
S. 1796, America's Healthy Future Act.
H.R. 3200, America's Affordable Health Choices Act of 2009.
Labor
Proposals related to Family Medical Leave Act (FMLA).
Proposals related to Americans with Disabilities Amendments
Act (ADAA) rulemaking.
S. 1580/H.R. 2067, Protecting the America's Workers Act.
S. 1584/H.R. 2981, Employment Non-Discrimination Act of 2009.
S. 1647, Assistance for Unemployed Workers Extension.
S. 1681, Health Insurance Industry Antitrust Enforcement Act
of 2009.
H.R. 800/S. 1041, Employee Free Choice Act.
H.R. 1542/S. 910, Healthy Families Act.
H.R. 3326, FY 2010 Defense Appropriations Act (issues related
to binding arbitration in Federal employee contracts).
H.R. 3548, Unemployment Compensation Extension Act.
Pensions
Proposals related to pension funding, including legislation to
provide temporary pension-funding relief.
Tax
Proposals related to revenue raisers for health reform.
Work Opportunity Tax Credit (WOTC).
Technology
Proposals related to behavioral advertising and data security.
H.R. 2221, Data Accountability and Trust Act.
2010 Q1:
Banking
S. 1212/H.R. 2695, Credit Card Fair Free Act of 2009.
H.R. 627, Credit CARD Act and Durbin-Bond Consumer Discount
and Fee Transparency Amendment to H.R. 627.
H.R. 2382, Credit Card Interchange Fees Act of 2009.
Health
Proposals related to Employee Retirement Income Security Act
(ERISA).
S. 391, Healthy Americans Act.
S. 1099/H.R. 2520; Patients Choice Act.
S. 1679, Affordable Health Choices Act.
S.1796, America's Healthy Future Act.
H.R. 3200, America's Affordable Health Choices Act of 2009.
H.R. 3590, Patient Protection and Affordable Care Act.
H.R. 3962, Affordable Care for America Act.
H.R. 4872, Health Care and Education Reconciliation Act of
2010.
Labor
Proposals related to Americans with Disabilities Amendments
Act (ADM) rulemaking.
S. 910/H.R. 1542, Healthy Families Act.
S. 1041/H.R. 800, Employee Free Choice Act.
S. 1580/H.R. 2067, Protecting America's Workers Act.
S. 1584/H.R. 2981, Employment Non-Discrimination Act of 2009.
S.1756, Protecting Older Workers Against Discrimination Act.
S. 2882/H.R. 3408; Taxpayer Responsibility Accountability and
Consistency Act.
H.R. 2847, Hiring Incentives to Restore Employment (HIRE Act).
H.R. 4853, Work-Life Balance Award Act of 2010.
Tax
Work Opportunity Tax Credit (WOTC).
H.R. 2847, Hiring Incentives to Restore Employment (HIRE Act).
H.R. 3590, Patient Protection and Affordable Care Act.
H.R. 4872, Health Care and Education Reconciliation Act of
2010.
Technology: Issues related to behavioral advertising, data
security, and privacy.
2010 Q2:
Financial Services
S. 1212/H.R. 2695, Credit Card Fair Free Act.
H.R. 2382; Credit Card Interchange Fees Act of 2009.
H.R. 6247, Credit CARD Act.
Health
H.R. 3590, Patient Protection and Affordable Care Act
implementing regulations related to ERISA health plans.
Labor
Proposals related to Americans with Disabilities Amendment Act
(ADAA) and Genetic Information Nondiscrimination Act rulemaking.
Proposals related to Independent Contractor Classification Act
rulemaking.
Proposals related to OSHA 300 Log, chemical hazard, and
walking/working surfaces rulemaking.
Proposals related to persuader activity rulemaking.
S. 910/H.R. 1542, Healthy Families Act.
S. 1041/H.R. 800, Employee Free Choice Act.
S. 1580/H.R. 2067, Protecting America's Workers Act.
S. 1756, Protecting Older Workers Against Discrimination Act.
S. 3254, Employee Misclassification Act.
Homeland Security
Proposals related to the National Strategy for Trusted
Identities in Cyberspace.
Retirement
Proposals related to pension funding, including legislation to
provide temporary pension funding relief.
Tax
H.R. 2857, Hiring Incentives to Restore Employment (HIRE Act).
H.R. 3590, Patient Protection and Affordable Care Act.
H.R. 4972, Health Care and Education Reconciliation Act of
2010.
2010 Q3:
Health
H.R. 3590, Patient Protection and Affordable Care Act
implementing regulations related to ERISA health plans.
Labor
Proposals related to Americans with Disabilities Amendments
Act (ADDA) rulemaking.
Proposals related to the Independent Contractor Classification
Act rulemaking.
Proposals related to persuader activity rulemaking.
Patient Protection and Affordable Care Act issues related to
unemployment insurance.
Rulemaking pertaining to independent contractor
classification, OSHA Form 300 logs, chemical handing, OSHA enforcement,
regulations pertaining to Americans with Disabilities Act (ADA) and
point of sale machines and genetic information.
Nominations of National Labor Relations Board (NLRB)
appointees Becker, Pearce, and Hayes.
S. 910/H.R. 1542, Healthy Families Act.
S. 1041/H.R. 800, Employee Free Choice Act.
S. 1580/H.R. 2067, Protecting America's Workers Act.
S. 1756, Protecting Older Workers Against Discrimination Act.
S. 3254, Employee Misclassification Act.
S. 3772/S. 182/H.R. 12, Paycheck Fairness Act.
H.R. 3149, Equal Employment for All Act.
H.R. 4213, Unemployment Compensation Extension Act of 2010.
Tax
H.R. 2847, Hiring Incentives to Restore Employment (HIRE Act).
H.R. 3590, Patient Protection and Affordable Care Act.
H.R. 4872, Health Care and Education Reconciliation Act of
2010.
Technology
Issues related to behavioral advertising and data security and
privacy.
2010 Q4:
Health
H.R. 3590, Patient Protection and Affordable Care Act
implementing regulations related to ERISA health plans.
Labor
Issues related to Americans with Disabilities Amendments Act
rulemaking.
S. 910/H.R. 1542, Healthy Families Act.
S. 1041/H.R. 800, Employee Free Choice Act.
S. 1580/H.R. 2067, Protecting America's Workers Act.
S. 1584/H.R. 2981, Employment Non-Discrimination Act of 2009.
S. 1647, Assistance for Unemployed Workers Extension.
S. 1681, Health Insurance Industry Antitrust Enforcement Act
of 2009.
S. 2790/H.R. 4092, Pandemic Protection for Workers, Families,
and Businesses Act.
H.R. 3326, FY 2010 Defense Appropriations Bill and issues
related to binding arbitration in Federal employee contracts.
H.R. 3548, Unemployment Compensation Extension Act.
H.R. 3911, Emergency Influenza Containment Act.
General FMLA-related bills.
Retirement
Issues relating to pension funding, including legislation to
provide temporary pension funding relief.
Tax
Issues related to revenue raisers for health reform.
Work Opportunity Tax Credit (WQTC).
Technology
Issues related to behavioral advertising and data security.
H.R. 2221, Data Accountability and Trust Act.
2016 Q1:
Health
Issues related to the House of Representatives Health Care
Task Force.
S. 2045/H.R. 2050, Middle Class Health Benefits Tax Repeal Act
of 2015.
S. 2075, American Worker Health Care Tax Relief Act of 2015.
H.R. 879, Ax the Tax on Middle Class Americans' Health Plans
Act.
Retirement
RIN 1210-AB32, Department of Labor Proposed Definition of
Fiduciary.
RIN 1545-BM58, Internal Revenue Service Nondiscrimination
Relief for Closed Defined Benefit Pension Plans.
RIN 1210-2A25, Department of Labor Proposed Definition of
Fiduciary.
2016 Q2:
Health
Issues related to the House of Representatives Health Care
Task Force.
RIN-3046-AB01, Equal Employment Opportunity Commissions final
rule on Employer Wellness Programs.
Retirement: Issues related to Pension Benefit Guaranty
Corporation funding.
2016 Q3:
Health
RIN-3046-AB01, Equal Employment Opportunity Commission's final
rule on Employer Wellness Programs.
Issues related to Affordable Care Act 40-percent excise tax on
health benefits.
Issues related to final Qualified Entity Rule from Centers for
Medicare and Medicaid Services.
Issues related to regulations on Health Reimbursement
Arrangements.
Issues related to the House Health Care Task Force Better Way
Project.
2016 Q4:
Budget
Issues related to Federal budget process reforms.
Issues related to FY 2017 budget.
Provisions related to repeal and replace of the Affordable
Care Act.
Health
Issues related to Affordable Care Act 40-percent excise tax on
health benefits.
Issues related to the exclusion and deduction for employee
health benefits.
Issues related to ERISA pre-emption.
4. Explain how you will resolve any potential conflict of interest,
including any that are disclosed by your responses to the above items.
(Provide the committee with two copies of any trust or other
agreements.)
For the two funds my spouse and I are currently invested in,
within 90 days of confirmation, we will divest of these
holdings and provide the committee with a copy of the
divestiture. As for any lobbying recusals, I have fulfilled the
terms of the most recent ethics agreement signed upon re-
entering Federal service (Attachment 2). For any conflict of
interest questions that may arise while I am serving in the HHS
position, I will seek the advice of the HHS career ethics
officials.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency
(e.g., an Inspector General's office), professional association,
disciplinary committee, or other ethics enforcement entity at any time?
Have you ever been interviewed regarding your own conduct as part of
any such inquiry or investigation? If so, provide details, regardless
of the outcome.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? Have you ever been interviewed
regarding your own conduct as part of any such inquiry or
investigation? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
Attachment 1
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
______
Attachment 2
October 31, 2019
Ms. Elizabeth Fischmann
Associate General Counsel for Ethics
Designated Agency Ethics Official
U.S. Department of Health and Human Services
Room 710-E, Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201
Dear Ms. Fischmann:
The purpose of this letter is to describe the steps that I will
take to avoid any actual or apparent conflict of interest in the event
that I run confirmed for the position of Assistant Secretary for
Legislation, U.S. Department of Health and Human Services.
As required by 18 U.S.C. Sec. 208(a), I will not participate
personally and substantially in any particular matter in which I know
that I have a financial interest directly and predictably affected by
the matter, or in which I know that a person whose interests are
imputed to me has a financial interest directly and predictably
affected by the matter, unless I first obtain a written waiver,
pursuant to 18 U.S.C. Sec. 208(b)(1), or qualify for a regulatory
exemption, pursuant to 18 U.S.C. Sec. 208(b)(2). I understand that the
interests of the following persons are imputed to me: any spouse or
minor child of mine; any general partner of a partnership in which I am
a limited or general partner; any organization in which I serve as
officer, director, trustee, general partner or employee; and any person
or organization with which I am negotiating or have an arrangement
concerning prospective employment.
Within 90 days of my confirmation, I will divest my interests in
the following holdings:
SPDR S&P Oil & Gas Exploration & Production ETF (XOP);
Vanguard Energy ETF (VDE).
Until I have completed this divestiture, I will not participate
personally and substantially in any particular matter that to my
knowledge has a direct and predictable effect on the financial
interests of any holding of either of these funds that is invested in
the sector that is the focus of the fund, unless I first obtain a
written waiver, pursuant to 18 U.S.C. Sec. 208(b)(1), or qualify for a
regulatory exemption, pursuant to 18 U.S.C. Sec. 208(b)(2).
I understand that I may be eligible to request a Certificate of
Divestiture for qualifying assets and that a Certificate of Divestiture
is effective only if obtained prior to divestiture. Regardless of
whether I receive a Certificate of Divestiture, I will ensure that all
divestitures discussed in this agreement occur within the agreed upon
timeframes and that all proceeds are invested in non-conflicting
assets,
If I have a managed account or otherwise use the services of an
investment professional during my appointment, I will ensure that the
account manager or investment professional obtains my prior approval on
a case-by-case basis for the purchase of any assets other than cash,
cash equivalents, investment funds that qualify for the exemption at 5
CFR Sec. 2640.201(a), or obligations of the United States.
In order to avoid potential conflicts of interest during my
appointment as Assistant Secretary for Legislation, I, my spouse, or
any minor children of mine will not acquire any direct financial
interest in entities listed on the FDA prohibited holdings list or in
entities involved, directly or through subsidiaries, in the following
industries: (1) research, development, manufacture, distribution, or
sale of pharmaceutical, biotechnology, or medical devices, equipment,
preparations, treatment, or products; (2) veterinary products; (3)
healthcare management or delivery; (4) health, disability, or workers
compensation insurance or related services.; (5) food and/or beverage
production, processing or distribution; (6) communications media; (7)
computer hardware, computer software, and related internet
technologies; (8) wireless communications; (9) social sciences and
economic research organizations; (10) energy or utilities; (11)
commercial airlines, railroads, ship lines, and cargo carriers; or (12)
sector mutual funds that concentrate their portfolios on one country
other than the United States. In addition, we will not acquire any
interests in sector mutual funds that concentrate in any of these
sectors.
I understand that as an appointee I must continue to abide by the
Ethics Pledge (Executive Order No. 13770) that I previously signed and
that I will be bound by the requirements and restrictions therein in
addition to the commitments I have made in this ethics agreement.
I will meet in person with you during the first week of my service
in the position of Assistant Secretary for Legislation in order to
complete the initial ethics briefing required under 5 CFR
Sec. 2638.305. Within 90 days of my confirmation, I will document my
compliance with this ethics agreement by notifying you in writing when
I have completed the steps described in this ethics agreement.
I have been advised that this ethics agreement will be posted
publicly, consistent with 5 U.S.C. Sec. 552, on the website of the U.S.
Office of Government Ethics with ethics agreements of other
Presidential nominees who file public financial disclosure reports.
Sincerely,
Sarah Arbes
______
Date: September 21, 2017
MEMORANDUM FOR ELIZABETH J. FISCHMANN
Designated Agency Ethics Official
SUBJECT: Notification of Commitment to Recuse
This memorandum is to provide you with further details of the recusal
arrangement I have implemented to ensure that I comply with certain
provisions of Executive Order 13770 (the Ethics Pledge). This recusal
obligation is in addition to those detailed in my signed Ethics
Agreement dated September 21, 2017.
During the 2 years before the date of my appointment, I was a federally
registered lobbyist. Accordingly, under Executive Order 13770 (January
28, 2017). the Ethics Pledge, I will not for a period of 2 years after
the date of my appointment, or participate in any particular matter on
which I lobbied within the 2 years before the date of my appointment,
or participate in the specific issue area in which that particular
matter falls, unless covered by a waiver issued pursuant to section 3.
The Office of the Counsel to the President has advised that, as used in
the Ethics Pledge, the term ``specific issue area'' means a
``particular matter of general applicability.'' This second term, a
particular matter of general applicability, has been defined in
regulations issued by the Office of Government Ethics as ``a particular
matter that is focused on the interests of a discrete and identifiable
class of persons, but does not involve specific parties.'' 5 CFR
Sec. 2640.102(m). It may include governmental action such as
legislation or policy making that is narrowly focused on the interests
of a discrete and identifiable class of person. It does not extend to
the consideration or adoption of broad policy options that are directed
to the interest of a large and diverse group of persons. In accordance
with guidance from the Office of Government Ethics and interpretations
of the executive order, and alter examination of any relevant
information regarding the nature of my lobbying assignments (including
reports filed under the Lobbying Disclosure Act), it has been
determined that I must recuse from the following particular matter and
``specific issue areas'':
1) H.R. 879, Ax the Tax on Middle Class Americans' Health Plans
Act, all provisions;
2) H.R. 2050 and S. 2045, Middle Class Health Benefits Tax Repeal
Act of 2015, all provisions;
3) S. 2075, American Worker Health Care Tax Relief Act of 2015,
all provisions;
4) RIN-3046-AB01, Equal Employment Opportunity Commission's final
rule on Employer Wellness Programs;
5) House of Representatives Health Care Task Force;
6) House Health Care Task Force Better Way Project;
7) Affordable Care Act's 40% excise tax on health benefits;
8) Final Qualified Entity Rule from CMS;
9) Workplace Wellness rules;
10) Regulations on Health Reimbursement Arrangements;
11) Federal budget process reforms;
12) Exclusions and deductions for employee health benefits;
13) ERISA pre-emption.
In order to help ensure that I do not participate officially in these
matters, I have taken or will take the following steps, similar to
those outlined in my Ethics Agreement (1) Matters from which I am
recused will be delegated to another Deputy ASL, or elevated to the
ASL, as appropriate, for disposition without my input or
recommendation, and (2) I have advised my immediate administrative
staff and other appropriate ASL staff of this recusal and directed them
to screen all mailers that are processed through them to ensure that
any matters that could affect any of these entities are referred to the
appropriate people above, to ensure the matter is handled in accordance
with this memorandum.
Sarah Arbes
cc: Acting ASL
Deputy Assistant Secretaries for Legislation
Stanley Olesh, OGC Ethics Division
______
Date: September 21, 2017
MEMORANDUM FOR THE RECORD
SUBJECT: Ethics Agreement
In order to avoid any financial conflict of interest in violation of 18
U.S.C. 208(a) or the appearance of a financial conflict of interest as
defined in the Standard of Ethical Conduct for Employees of the
Executive Branch, 5 CFR Sec. 2635.502, and to adhere to the Ethics
Pledge instituted by Executive Order 13770 issued on January 28, 2017
and entitled ``Ethics Commitments by Executive Branch Appointees'' (the
Ethics Pledge) I am issuing the following statement.
As an appointee I have signed the Ethics Pledge and I will be bound by
the requirements and restrictions therein even if not specifically
mentioned in this or any other ethics agreement.
Before beginning the covered Federal position, I resigned from the non-
federal position listed on my OGE 278e (Public Financial Disclosure
Report) with Business Roundtable. Pursuant to the Ethics Pledge, I will
not, for a period of 2 years from the date of my appointment to the
covered position, participate in an official capacity in any particular
matter involving specific parties that is directly and substantially
related to Business Roundtable, unless an exception applies or I am
granted a waiver. Under most circumstances, the 2-year Pledge prior-
employer recusal obligation will supersede the 1-year prior employer
recusal obligation under 5 CFR Sec. 2635.502; however, in the limited
circumstances when the Pledge recusal would not apply but the
regulatory recusal would still apply, then I agree to be disqualified,
for a period of 1 year from the date of my resignation from the
respective entity or the date my services for the entity otherwise
ceased, from participating in any particular matter involving specific
parties in which any of the above entities is a party or represents a
party, unless I am first authorized to participate, pursuant to 5 CFR
Sec. 2635.502(d).
As required by 18 U.S.C. Sec. 208(a), I will not participate personally
and substantially in any particular matter that has a direct and
predictable effect on my financial interests or those of any person
whose interests are imputed to me, unless I first obtain a written
waiver pursuant to section 208(b)(1) or qualify for a regulatory
exemption pursuant to section 208(b)(2). I understand that the
interests or the following persons are imputed to me: any spouse or
minor child of mine; any general partner of a partnership in which I am
a limited or general partner; any organization in which I serve as
officer, director, trustee, general partner or employee; and any person
or organization with which I am negotiating or have an arrangement
concerning prospective employment.
In order to avoid potential conflicts of interest during my
appointment, I agree that I (and anyone whose financial interests are
imputed to me, such as a spouse or minor children) will not acquire any
further financial interests in entities listed on the FDA prohibited
holdings list or in entities involved, directly or through
subsidiaries, in tile following industries: (1) research, development,
manufacture, distribution, or sale of pharmaceutical, biotechnology, or
medical devices, equipment, preparations, treatments, or products: (2)
veterinary products or cosmetics: (3) healthcare management or
delivery; (4) health, disability, or workers compensation insurance or
related services; (5) food and/or beverage production, processing or
distribution: (6) communications media; (7) computer hardware, computer
software, and related internet technologies; (8) wireless
communications; (9) social sciences and economic research
organizations; (10) energy or utilities; (11) commercial airlines,
railroads, ship lines, and cargo carriers; or (12) sector mutual funds
that concentrate their portfolios in any of these sectors or on one
country other than the United States. If I have a managed account or
otherwise use the services an investment professional during my
appointment, I will ensure that the account manager or investment
professional obtains my prior approval on case-by-case basis for the
purchase of any assets other than cash, cash equivalents, investment
funds that qualify for the exemption at 5 CFR Sec. 2640.201(a), or
obligations of the United States.
In accordance with Executive Order 13770 (January 28, 2017), the Ethics
Pledge, I will not for a period of 2 years after the date of my
appointment participate in any particular matter on which I lobbied
within the 2 years before the date of my appointment, or participate in
the specific issue area in which that particular matter falls, unless
covered by a waiver issued pursuant to section 3. The Office of the
Counsel to the President has advised that, as used in the Ethics
Pledge, the term ``specific issue area'' means a ``particular matter of
general applicability.'' This second term, a particular matter of
general applicability, has been defined in regulations issued by the
Office of Government Ethics as ``a particular matter that is focused on
the interests of a discrete and identifiable class of persons, but does
not involve specific parties.'' 5 CFR Sec. 2040.102(111). It may
include governmental action such as legislation or policy making that
is narrowly focused on the interest of a discrete and identifiable
class of person. It does not extend to the consideration or adoption of
broad policy options that are directed to the interests of a large and
diverse group of persons. As with any of my recusal obligations, if I
have questions about the scope of my obligations under the Ethics
Pledge, I will ask for guidance.
A copy of this memorandum will be distributed to the appropriate
personnel to enable them to assist in screening matters that may
involve my participation and which may be implicated by the above
disqualification provisions. Matters from which I am disqualified
should be referred to another Deputy ASL, or elevated to the ASL, as
appropriate, without my knowledge or involvement. To help ensure that I
do not participate officially in these matters, I have instructed my
immediate staff and other affected individuals to directly handle, or
refer to the appropriate person(s), any matter from which I am recused.
In order to ensure that this ethics agreement continues to be
effective. I will take the following steps in the future: (1) I will
revise and update this memorandum whenever that is warranted by changes
in my financial interests or other changed circumstances, and provide
the OGC Ethics Division with a copy; and (2) I will advise my immediate
administrative staff of any such changes.
Sarah Arbes
cc: Stanley Olesh, OGC/Ethics
Acting ASL
Deputy Assistant Secretaries for Legislation
______
ETHICS PLEDGE
As a condition, and in consideration, of my employment in the United
States Government in an appointee position invested with the public
trust I commit myself to the following obligations, which I understand
are binding on me and are enforceable under law:
1. Appointees Leaving Government to Lobby Agency. I will not,
within 5 years after the termination of my employment as an appointee
in any executive agency in which I am appointed to serve, engage in
lobbying activities with respect to that agency.
2. Appointees Leaving Government. If, upon my departure from the
Government, I am covered by the post-employment restrictions on
communicating with employees of my former executive agency set forth in
section 207(c) of title 18, United States Code, I agree that I will
abide by those restrictions.
3. Appointees Leaving Government to Lobby Senior Officials. In
addition to abiding by the limitations of paragraphs 1 and 2, I also
agree, upon leaving Government service, not to engage in lobbying
activities with respect to any covered executive branch official or
non-career Senior Executive Service appointee for the remainder of the
Administration.
4. Appointees Acting on Behalf of a Foreign Government or Party. I
will not at any time after the termination of my employment in the
United States Government, engage in any activity on behalf of any
foreign government or foreign political party which, were it undertaken
on January 20, 2017, would require me to register under the Foreign
Agents Registration Act of 1938, as amended.
5. Lobbyist Gift Ban. I will not accept gifts from registered
lobbyists or lobbying organizations for the duration of my service as
an appointee.
6. All Appointees Entering Government. I will not for a period of 2
years from the date of my appointment participate in any particular
matter involving specific parties that is directly and substantially
related to my former employer or former clients, including regulations
and contracts.
7. Lobbyists Entering Government. If I was a registered lobbyist
within the 2 years before the date of my appointment, in addition to
abiding by the limitations of paragraph 6, I will not for a period of 2
years after the date of my appointment participate in any particular
matter on which I lobbied within the 2 years before the date of my
appointment or participate in the specific issue area in which that
particular matter falls.
8. Employment Qualification Commitment. I agree that any hiring or
other employment decisions I make will be based on the candidate's
qualifications, competence, and experience.
9. Assent to Enforcement. I acknowledge that the Executive Order
entitled ``Ethics Commitments by Executive Branch Appointees,'' issued
by the President on January 28, 2017, Which I have read before signing
this document, defines certain terms applicable to the foregoing
obligations and sets forth the methods for enforcing them. I expressly
accept the provisions of that executive order as a part of this
agreement and as binding on me. I understand that the obligations of
this pledge are in addition to any statutory or other legal
restrictions applicable to me by virtue of Government service.
Sarah Cudworth Arbes April
12, 2017
______
Questions Submitted for the Record to Sarah C. Arbes
Question Submitted by Hon. John Thune
Question. As you know, I've long been concerned with workforce and
quality-of-care issues at the Indian Health Service in South Dakota. At
times, it has been difficult to navigate inquiries and get answers to
important questions. If confirmed, will you commit to ensuring timely
responses and overall, to facilitating improved quality of care at IHS?
Answer. Yes, I commit to ensuring timely responses. While the
Assistant Secretary for Legislation cannot directly facilitate improved
quality of care at IHS, I commit to ensuring your ideas to improve the
workforce and quality of care at IHS facilities in South Dakota receive
full consideration by the appropriate officials in the Department.
______
Questions Submitted by Hon. Ron Wyden
Question. I'm concerned about this administration's treatment of
our most vulnerable populations, including children and pregnant women.
Back in October 2019, along with Energy and Commerce Chairman
Pallone, I sent Secretary Azar a letter highlighting the unprecedented
trend in the number of children losing health coverage under the Trump
administration and asking the Secretary for documents and information
related to the children's coverage losses in Medicaid and CHIP. I still
have not received a response.
When will I receive an answer to this outstanding letter? What will
you do to ensure that when Congress asks the Department for
information--especially when it relates to our oversight
responsibilities to protect the most vulnerable--that members will
receive timely and responsive answers?
Answer. HHS responded to you and Chairman Pallone on February 11,
2020. I will continue to work to ensure that all congressional
communications are answered in an appropriate and timely manner.
Question. As discussed during the hearing, neither the Finance
Committee nor its members believe the Department of Health and Human
Services (HHS) has responded to investigative requests in either a
timely or complete manner. In addition, majority and minority Finance
Committee staff have repeatedly asked HHS to produce documents in
electronic form that are useable for the committee's oversight
responsibilities with limited success.
During the question period, you indicated to Chairman Grassley that
HHS did not want to produce documents and information in electronic
form that were ``editable,'' expressing concern that doing so would
threaten a document's integrity. To be clear, the committee has long
abided by applicable Senate rules and practices dedicated to protecting
the integrity of documents and information it receives.
The bottom line: the committee must receive the information it
requests in a timely fashion, and have the ability to apply common
tools for searching, sorting, and analyzing the information and data
produced to it by HHS in all of its investigations.
To better understand and improve the processes for responding to
congressional oversight requests in place at HHS, please answer the
following questions.
Describe the Department's current standard policies and legal basis
for producing documents and providing information in response to
requests from the following requestors, including but not limited to
priority, timeliness, format, content, legal review, redaction, and
physical production and delivery: Senate Committees; ranking members;
and individual Senators.
Answer. The longstanding practice of the HHS legislative affairs
oversight team is to respond to letters as soon as practicable. Despite
ASL's recent efforts to increase staff devoted to responding to
congressional oversight requests, requests for information outpace
internal staff resources. Therefore, we follow the guidance from the
Office of Legal Counsel, Congressional Research Service, and the
Government Accountability Office in responding to congressional
requests. In following that guidance, the Department prioritizes
letters in order of leadership to chairs/ranking members to committee
of jurisdiction members, then to individual members of Congress.
Members and staff are always welcome to reach out to me or any member
of the HHS legislative affairs team to request expedited consideration
as needed.
HHS is committed to providing documents to Congress in a timely
manner in a format that facilitates ongoing congressional oversight.
Specific to the staff level discussions that have taken place with the
Senate Finance Committee, HHS has committed to providing documents in
more user-friendly formats. Our ongoing productions of documents in a
more user-friendly format illustrates that commitment. Additionally, if
an accommodation is required on a specific document to make it more
accessible for review and analysis, the committee's requests will be
considered on a case-by-case basis.
Question. Please explain why HHS is unwilling to provide responses
in the form of electronic documents and spreadsheets with common
functional capabilities unblocked?
Answer. HHS is sensitive to the committee's need for data that can
be easily reviewed and analyzed. Pursuant to staff-level discussions,
HHS will work to ensure that documents are provided to the committee in
a manner that allows meaningful investigative work and enables maximum
usability of the documents, while preserving the integrity of the
documents. If an accommodation is required on a specific document to
make it more accessible for review and analysis, the committee's
requests will be considered on a case-by-case basis. This includes
transmittal of documents in formats outside of PDFs.
Question. If confirmed, what changes will you make to the
Department's procedures to ensure that the Department promptly and
completely responds to requests from the committee and its members?
Answer. Upon assuming the position of Acting Assistant Secretary
for Legislation in June 2019, I prioritized responding to an
unacceptable backlog of oversight letters, made necessary personnel
changes, and altered the mission of our team to be more accommodating
to the important oversight role of Congress. That process took several
months, and it is my belief that these changes have improved HHS's
responsiveness to this committee. Further, my commitment to you in the
hearing to provide progress reports every 2 weeks on your request for
documents related to the Office of Refugee Resettlement is another step
in the right direction toward a constructive working relationship
between our offices. If confirmed, I look forward to an open, honest
dialogue with the committee about what may be possible to meet your
needs.
Question. HHS's private-sector and agency peers, including private-
sector attorneys, routinely produce documents to the committee in their
original electronic file formats (i.e., datasets provided in comma-
separated-value (CSV)/Excel Workbooks, and emails, memos, and
presentations in Word or text-recognizable PDF). These formats provide
information to the committee that are ``useable'' for investigative
purposes since they are in a format in which functions are unlocked,
and information is searchable and sortable. For example, when
responsive documents are originated in spreadsheets, HHS should furnish
the spreadsheets to the committee in formats that are compatible with
Microsoft Excel (either Excel itself or comma-separated values), which
allow the committee to use all Excel tools to analyze data therein.
Will you commit to produce documents in useable electronic formats,
as detailed above? If not, why not?
Answer. HHS will work to ensure that documents are provided to the
committee in a manner that allows meaningful investigative work and
enables maximum usability of the documents, while preserving the
integrity of the documents.
______
Questions Submitted by Hon. Maria Cantwell
Question. In your testimony, you point out the importance of
responding to congressional inquiries in a timely manner. On January
27, 2020, my colleagues and I sent a letter to Secretary Azar after the
first U.S. case of the 2019 novel coronavirus was found in Washington
State. During this public health emergency, we expected an expedited
reply. To date, we have not yet received a response.
Answer. First, it is important to know that any letter received by
a member of Congress is taken very seriously. Upon receipt it is
immediately routed to senior leaders in the Department for their
awareness and consideration. Further, we endeavor to respond to every
letter we receive.
Regarding this specific letter, because of the speed with which
matters are evolving related to COVID-19, and because the policymakers
who would respond to your letter are the same ones working around the
clock to mitigate this public health emergency, HHS has prioritized
ensuring members of Congress have the latest developments and
information. Congressional letters which would typically receive a
timely written response on agency letterhead are instead being
responded to immediately through member-level briefings, member-level
phone calls with agency principals, and email communications with
staff.
The Centers for Disease Control and Prevention (CDC) has offered,
and stands ready to facilitate a personal briefing for you with CDC
Director Dr. Robert Redfield regarding the original case in your home
State. The email your staff recently received to alert you of a
transfer of several positive patients from California to one of
Washington's premier infectious disease hospitals, and the closed-door
briefing with the HHS's top public health experts that you attended
with other Senators are other examples of this ongoing and frequent
outreach.
Question. If confirmed, how will you prioritize responding to
letters?
Answer. The longstanding practice of the HHS legislative affairs
team is to respond to every policy letter as soon as practicable.
Despite ASL's best efforts, the volume of letters we receive outpaces
internal staff resources. Therefore, we follow the guidance of the
Office of Legal Counsel, Congressional Research Service, and the
Government Accountability Office in responding to congressional
requests. In following that guidance, the Department prioritizes
letters in order of leadership to chairs/ranking members to committee
of jurisdiction members, then to individual members of Congress.
Members and staff are always welcome to reach out to me or any member
of the HHS legislative affairs team to request expedited consideration
as needed.
Question. Will you commit to providing members of Congress prompt
responses to requests for information, particularly in the case of a
public health emergency like the coronavirus?
Answer. Yes.
______
Question Submitted by Hon. Michael F. Bennet
Question. I am currently working on the Verifying Accurate Leading-
edge IVCT Development (VALID) Act of 2020 with Senator Burr to develop
comprehensive regulation for in vitro clinical tests. As we continue to
work on the bill, will you ensure that the administration, including
FDA, CDC, and CMS, continues to provide technical assistance to ensure
that it provides an effective regulatory framework for in vitro
clinical tests?
Answer. Yes. FDA, CDC, and CMS have appreciated the opportunity to
provide you with robust technical assistance in drafting this
legislation. As long as you have questions, we will be here to help
where possible with technical input.
______
Questions Submitted by Hon. Sherrod Brown
Question. Medicaid and lead testing: Childhood lead exposure
remains a serious public health challenge for communities across the
country. With Medicaid serving as an essential health coverage source
for the Nation's children, the Centers for Medicare and Medicaid
Services (CMS) plays a critical role in the prevention, screening, and
treatment of children affected by lead exposure. For 20 years, Federal
law has required blood lead screening ``as appropriate for age and risk
factors'' for all children enrolled in Medicaid. In 2016, CMS under the
previous administration took a number of actions aimed at improving
blood lead screening and testing for Medicaid-eligible children,
including the collection of data to try and help ensure the delivery of
blood lead screening. However, despite this progress, according to a
recent report from the Government Accountability Office (GAO) (GAO-19-
481), data on statutorily mandated blood lead screenings remains
incomplete.
In October 2019, several of my colleagues and I sent a letter to
CMS requesting information on how the agency planned to address the
deficiencies in lead screening data. We have yet to receive a response
to our letter or the questions listed below. I ask that you please
engage with your colleagues to respond to these questions.
What specific actions has CMS taken or does CMS plan to take to
address the issues and recommendations related to blood lead screening
included in the 2019 GAO report?
What steps has CMS taken or does CMS plan to take to assist states
with planning improvements to ensure complete and accurate reporting of
data on blood lead screening?
What actions has CMS taken or does CMS plan to take, in
collaboration with the Centers for Disease Control and Prevention (CDC)
or other Federal agencies, to develop improved methods of capturing
data related to Medicaid beneficiaries who receive blood lead
screenings?
In addition to working with the CDC and other Federal agencies to
improve lead screening data reporting, how is CMS working with Women,
Infants, and Children (WIC) agencies or Head Start programs on ways
State agencies can coordinate and partner to identify and screen at-
risk children?
What, if any, additional support or oversight authority from
Congress does CMS feel it needs in order to ensure the prevention,
screening, and treatment for children impacted by lead exposure?
Answer. On February 11, 2020, CMS provided you with a fulsome
response to your letter and these questions. If you have any follow-up,
please reach out and I would be happy to facilitate additional
information.
Question. Timely responses to member inquiries: There have been
several occasions recently where I have sent a letter to HHS or another
office within HHS's purview and failed to receive a timely or
comprehensive response.
If confirmed, what steps will you take to ensure that CMS and other
offices within HHS respond to letters from members of Congress in a
timely and comprehensive manner?
Answer. The longstanding practice of the HHS legislative affairs
team is to respond to every policy letter as soon as practicable.
Despite ASL's best efforts, the volume of letters we receive outpaces
internal staff resources. Therefore, we follow the guidance of the
Office of Legal Counsel, Congressional Research Service, and the
Government Accountability Office in responding to congressional
requests. In following that guidance, the Department prioritizes
letters in order of leadership to chairs/ranking members to committee
of jurisdiction members, then to individual members of Congress.
Members and staff are always welcome to reach out to me or any member
of the HHS legislative affairs team to request expedited consideration
as needed.
Question Submitted by Hon. Robert P. Casey, Jr.
Question. During your confirmation hearing, I mentioned the
importance of Medicaid. It speaks to our values--about how we provide
health care to our children, seniors, and people with disabilities, as
well as support the economic vitality of hospitals, particularly in
underserved urban and rural areas, and communities across the country.
Millions of Americans fought to protect Medicaid and the Affordable
Care Act in 2017. Yet, for some reason, the administration continues to
be obsessed with undermining the program through massive budget cuts
and illegal proposals to cap spending. Equally troubling, there seems
to be an administration-wide decision to keep Americans in the dark
about how these decisions are made and what the impact might be. The
public deserves better. The voices of Americans deserve to be part of
the decision-making process.
I have requested a series of documents with respect to Medicaid
block grants and Medicaid managed care. During the hearing, you
committed to follow up with me on ensuring those documents are
produced. Please provide an update on when I should expect a response
to the following document requests.
Documents responsive to the requests made in my letter to Secretary
Azar dated February 3, 2020 regarding the administration's ``Healthy
Adult Opportunity'' guidance. This letter follows up on insufficient
responses to two prior letters from 2019.
Documents responsive to the requests made in my letter dated July
31, 2019 to Administrator Verma regarding Medicaid managed care.
Answer. The longstanding practice of the HHS legislative affairs
oversight team is to respond to letters and accompanying document
production request as soon as practicable. Despite ASL's recent efforts
to increase staff devoted to responding to congressional oversight
requests, requests for information outpace internal staff resources.
Therefore, we follow the guidance of the Office of Legal Counsel,
Congressional Research Service, and the Government Accountability
Office in responding to congressional requests. In following that
guidance, the Department prioritizes letters in order of leadership to
chairs/ranking members to committee of jurisdiction members, then to
individual members of Congress. Members and staff are always welcome to
reach out to me or any member of the HHS legislative affairs team to
request expedited consideration as needed.
I have directed ASL and CMS staff to coordinate responses and
explore what document productions are possible for the requests
referenced above. We will follow up in the near future.
______
Question Submitted by Hon. Mark R. Warner
Question. On November 8, 2019, I sent a letter to Mr. Roger
Severino, the Director of the Office for Civil Rights at Department of
Health and Human Services, expressing concerns about the Department's
failure to act following the mass exposure of sensitive medical images
and information by health organizations.
That letter flagged a report revealing that millions of Americans
had their private medical images and personal health information
exposed online due to unsecured picture archiving and communication
servers. I have not received a response from Mr. Severino and--despite
my staff following up--the Department has not acted to remove those
images. As I write this question, millions of images and sensitive
patient information of American citizens remain online.
In your role as the Department of Health and Human Services chief
liaison to Congress, how would you improve the Department's
responsiveness to urgent matters such as this?
Can you commit that my letter will receive a response and that the
Department will act to address this serious security vulnerability?
Answer. On December 18, 2019, OCR provided you with a fulsome
response to your letter and these questions. If you have any follow-up
questions, please reach out.
______
Prepared Statement of Jason J. Fichtner, Ph.D.\1\, Nominated to be a
Member of the Social Security Advisory Board, Social Security
Administration
---------------------------------------------------------------------------
\1\ The views expressed here are my own and do not necessarily
reflect the views of any other person or organization.
---------------------------------------------------------------------------
Chairman Grassley, Ranking Member Wyden, and members of the
committee, thank you for the opportunity to appear before you today.
My name is Jason Fichtner, and I am a senior lecturer of
international economics and associate director of the Masters of
International Economics and Finance (MIEF) program at the Johns Hopkins
University School of Advanced International Studies (SAIS). I am also a
fellow at the Bipartisan Policy Center (BPC) and on the board of
directors of the National Academy of Social Insurance (NASI). All
opinions I express today are my own and do not necessarily reflect the
views of my employers or any other organization or person.
I want to thank the President for nominating me to serve as a
member of the Social Security Advisory Board (SSAB). Over a decade ago,
I was privileged to serve in several positions at the Social Security
Administration, including as the Acting Principal Deputy Commissioner
of Social Security. In that capacity, I worked with the Congress, the
White House, the Social Security Advisory Board, stakeholders, and the
public to support the vital programs administered by the Social
Security Administration and to improve the service the organization
provides. I was also the Secretary to the Social Security Board of
Trustees. Additionally, I was instrumental in improving the
administration's communication materials to the public, including
``When to Start Receiving Retirement Benefits,'' a publication that
informs people how Social Security benefits fit into their retirement
decision and that is still used today.
I believe that my educational and professional experiences make me
an ideal candidate to serve on this Board. With respect to my
education, I received my undergraduate degree from the University of
Michigan, my master's degree in public policy from Georgetown
University, and my Ph.D. in public administration and policy from
Virginia Tech. Professionally, along with my previous service at the
Social Security Administration, I've worked as an Economist for the
Internal Revenue Service and as a Senior Economist for the Joint
Economic Committee of the United States Congress.
I have a long record of published research on issues related to
Social Security's retirement and disability programs, as well as
retirement security in general. I also have a long history of working
in a bipartisan manner, bringing people together to discuss,
deliberate, and address the challenges facing the Social Security
Administration and the vital programs it administers. The Social
Security Advisory Board makes recommendations to the President, the
Congress, and the public that, among other things, will ensure the
quality of service delivery that the Social Security Administration
provides, including increasing the public's understanding of program
benefits.
The heart of any organization is its employees, those who work
tirelessly every day to fulfill the mission and deliver quality
services. One of the accomplishments of which I am most proud from my
tenure at the Social Security Administration was getting to know the
employees of the agency, many of whom I remain in contact with to this
day. It is a truly a great privilege to once again be asked to serve
the public and work with those at the Social Security Administration.
The Social Security Advisory Board plays an important role in
advising how our Nation's important social insurance programs can be
improved and strengthened, and providing advice and guidance to the
Social Security Administration on ways to improve the administration of
these valuable programs. Should I be confirmed as a member of the
Social Security Advisory Board, I pledge to continue working in a
bipartisan manner to ensure that our Nation's social security programs
provide the best possible service to the public.
Thank you again for inviting me to testify today, and I would be
happy to answer any questions.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Jason Janas Fichtner.
2. Position to which nominated: Member, Social Security Advisory
Board.
3. Date of nomination: August 28, 2018.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: August 1, 1971, Detroit, Michigan.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list all secondary and higher education institutions,
dates attended, degree received, and date degree granted):
Ernest W. Seaholm High School, Birmingham, Michigan. Attended:
September 1985-June 1989. High school diploma, June 1989.
Pennsylvania State University. Attended September 1989-December
1990; transferred to University of Michigan.
University of Michigan. Attended January 1991-December 1992.
Bachelor of arts degree, December 1992.
Georgetown University. Attended August 1993-May 1995. Master of
public policy, May 1995.
Virginia Tech University. Attended September 1999-December
2005. Doctor of philosophy (Ph.D.) in public administration and
policy, December 2005.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment for each job):
Johns Hopkins University, Paul H. Nitze School of Advanced
International Studies, Washington, DC; senior lecturer,
international economics, associate director, Masters of
International Economics and Finance (MIEF) program, July 2018-
present.
Bipartisan Policy Center, Washington, DC, fellow, April 2018-
present; performed academic research.
Mercatus Center at George Mason University, Arlington, VA;
senior research fellow, September 2010-June 2018; performed
academic research.
U.S. Social Security Administration, Washington, DC; August
2007-September 2010. Positions held: Deputy Commissioner for
Social Security (Acting); Chief Economist; and Associate
Commissioner for Retirement Policy.
Served as the Principal Deputy Commissioner for the Social
Security Administration, providing leadership and management of the
Social Security programs (retirement, survivors, and disability), as
well as the Supplemental Security Income (SSI) program.
Served as Secretary to the Board of Trustees of the Social
Security Trust Funds and as the lead executive for the Social Security
Administration on the Trustees Working Group, which oversees the
methodologies and assumptions for the Annual Report.
Responsible for executive leadership to develop and execute
economic policy for the agency.
Managed Ph.D. and master level research staff in the conduct
of social insurance policy analysis based on major social initiatives
and economic trends.
Joint Economic Committee--United States Congress, Washington,
DC; Senior Economist, 1999 (106th Congress)-2007 (110th
Congress).
Advised members of Congress and their staffs on matters of
economic policy.
Arthur Andersen LLP, Office of Federal Tax Services, Economic
Analysis Group, Washington, DC; senior consultant, 1998-1999.
Developed econometric models to evaluate intercompany
transfer pricing practices of multinational corporations in various
industries to ensure compliance with U.S. and international tax
regulations.
U.S. Department of Treasury, Internal Revenue Service,
Washington; DC; Compliance Research Division--Projections and
Forecasting Group Economist, 1995-1998.
Forecasted electronically filed individual and business tax
returns, Forms 1040PC, and tax returns of exempt organizations,
individual refunds, and fiduciary tax returns.
Independent Sector, Washington, DC; research assistant, 1993-
1994.
Researched and analyzed statistical data on the nonprofit
sector for inclusion in Independent Sector research publications.
Johns Hopkins University, Paul H. Nitze School of Advanced
International Studies, Washington; DC; adjunct professor, 2011-
2018.
Georgetown University, McCourt School of Public Policy,
Washington, DC; adjunct professor, 2006-2017.
Virginia Tech, Center for Public Administration and Policy,
Alexandria, VA; adjunct professor, 2008-2010.
10. Government experience (list any current and former advisory,
consultative, honorary, or other part-time service or positions with
Federal, State, or local governments held since college, including
dates; other than those listed above):
None other than those listed above.
11. Business relationships (list all current and former positions held
as an officer, director, trustee, partner (e.g., limited partner, non-
voting, etc.), proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, other business enterprise, or
educational or other institution):
Aside from those previously listed above: TIAA--Editing
services for Financial Literacy and Retirement Security
Project; MSL Group--Research services--Author research paper on
financial security; Committee for a Responsible Federal
Budget--Writing research papers on Social Security Disability
Insurance; MJ Willard/National Telecommuting Institute, Inc.--
Consulting on Social Security Disability demonstration project
design; Urban Institute--Honorarium for focus group on research
project; and American Retirement Association--Honorarium for
co-authoring research paper.
12. Memberships (list all current and former memberships, as well as
any current and former offices held in professional, fraternal,
scholarly, civic, business, charitable, and other organizations dating
back to college, including dates for these memberships and offices):
National Academy of Social Insurance--Board member, current
treasurer; member from 2017-present; board member, 2017-
present; and treasurer from May 2018-present.
National Rifle Association, life member since 2000 (est.).
Georgetown University, McCourt School Alumni Board, 2005-2014;
chair, 2005-2006; fund-raising chair, 2007-2010.
Academic association memberships--Pre-2010/2011. But no longer
a member of any of the following: member of the American
Economic Association; member of the National Tax Association;
member of the Association for Public Policy Analysis and
Management; and member of the American Society for Public
Administration.
13. Political affiliations and activities:
a. List all public offices for which you have been a candidate
dating back to the age of 18.
N/A.
b. List all memberships and offices held in and services
rendered to all political parties or election committees,
currently and during the last 10 years prior to the date of
your nomination.
N/A.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years prior to the date of your nomination.
Tobias Reed, candidate for Treasurer, State of Oregon, 2016,
$250.
Trey Hollingsworth, candidate for U.S. Congress, 2016, $150.
John McCain, candidate for President of the United States, 2008,
$250.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement received
since the age of 18):
As listed in my CV:
U.S. Department of Treasury, Internal Revenue Service,
Washington, DC; performance awards, 1996, 1997, and 1998; Chief
Compliance Officer's award, 1997; and special act award, 1995.
Virginia Polytechnic Institute and State University (Virginia
Tech), Blacksburg and Alexandria, VA; Pi Alpha Alpha Honor
Society, Phi Kappa Phi Honor Society, and Outstanding Recent
Alumnus of the College of Architecture and Urban Studies for
2009-2010 Award.
Georgetown University, Washington, DC; Public Policy Department
Scholar, and Colin Campbell Alumni Award, 2006.
University of Michigan, Ann Arbor, Michigan; Class Honors
Graduate; and Princeton University Foundation for Student
Communication Scholar, 1992.
15. Published writings (list the titles, publishers, dates, and
hyperlinks (as applicable) of all books, articles, reports, blog posts,
or other published materials you have written):
I do not maintain, nor can I recall or create, a list of all
published materials. To the best of my knowledge, below is a
list of those published works for which I do maintain records.
Hyperlinks are provided, and most of these publications are
also available for download from the following website: https:/
/sites.
google.com/site/jasonjfichtner/publications.
Publications
``Supplemental Transition Accounts for Retirement: A Proposal
to Increase Retirement Income Security and Reform Social
Security,'' with Gary Koenig and William G. Gale. Public Policy
and Aging Report, Vol. 28, No. Suppl. 1. August 2018.
``Global Aging and Public Finance,'' Business Economics, Vol.
53, No. 2, April 2018. First online January 2018.
``Legislative Impact Accounting: Incorporating Prospective and
Retrospective Review Into a Regulatory Budget,'' with Patrick
A. McLaughlin and Adam N. Michel. Public Budgeting and Finance,
Vol. 38, No. 2, Summer 2018. First online December 2017.
``Supplemental Transition Accounts for Retirement (START): A
Proposal to Increase Retirement Income Security and Reform
Social Security,'' with Gary Koenig and William G. Gale. AARP
Public Policy Institute, January 2018.
``Enhancing U.S. Retirement Security Through Coordinated Reform
of Social Security Disability and Retirement Insurance
Programs,'' with Jason S. Seligman. The Journal of Retirement,
Vol. 4, No. 1. Summer 2016.
``Beyond All or Nothing: Reforming Social Security Disability
Insurance to Encourage Work and Wealth,'' with Jason S.
Seligman. Chapter 13 in SSDI Solutions: Ideas to Strengthen the
Social Security Disability Insurance Program, McCrery-Pomeroy
SSDI Solutions Initiative, Committee for a Responsible Federal
Budget, Infinity publishing, 2016.
``The Hidden Cost of Federal Tax Policy,'' with Jacob M.
Feldman, The Mercatus Center at George Mason University, 2015.
``Hospitals and the Proposed Virginia Medicaid Expansion,''
with Marc D. Joffe. The Thomas Jefferson Institute for Public
Policy, April 2015.
``The Power of the Purse: Rethinking Runaway Debt and a Broken
Budgeting Process,'' in Triumphs and Tragedies of the Modern
Congress, M. Angerholzer III, J. Kitfield, C. Lu, and N.
Ornstein (eds.), Praeger, October 2014.
The Economics of Medicaid: Assessing the Costs, and
Consequences, J. Fichtner (ed.), The Mercatus Center at George
Mason University, 2014. ``The Federal Side of the Budget
Equation,'' Chapter 3.
``Public Disability Insurance Programs in the Context of
Pension Reforms,'' with Jason S. Seligman. Chapter 7 in
Pensions: Policies, New Reforms and Current Challenges, T.
Reilly (ed.), Nova Science Publishers, 2014.
``Retirement Behavior and the Global Financial Crisis,'' with
John W.R. Phillips and Barbara A. Smith. Chapter 5 in Reshaping
Retirement Security: Lessons From the Global Financial Crisis,
R. Maurer, O. Mitchell, and M. Warshawsky (eds.), Oxford
University Press, 2012.
``Social Security Reform and Economic Growth,'' with Charles
Blahous. Chapter 15 in The 4% Solution: Unleashing the Economic
Growth America Needs, B. Miniter (ed.), Crown Business
Publisher, Random House, Inc., 2012.
``Three Approaches to Fostering Economic Competitiveness,''
Chapter 5 in Governing to Win: Enhancing National
Competitiveness Through New Policy and Operating Approaches, C.
Prow (ed.), IBM Center for the Business of Government, Rowman
and Littlefield Publishers, Inc., 2012.
``Revenue Estimation: A Comparison of Tax Distribution
Tables,'' Tax Notes, Vol. 105, No. 13, December 20. 2004.
``A Comparison of Tax Distribution Tables: How Missing or
Incomplete Information Distorts Perspectives,'' a report of The
Heritage Center for Data Analysis, The Heritage Foundation,
November 9. 2004. Included as Chapter 7 in The Secret Chamber
or the Public Square?--What Can Be Done to Make Tax Analysis
and Revenue Estimation More Transparent and Accurate, D.
Mastromarco, D. Burton, and W. Beach (eds.), The Heritage
Foundation. 2005.
The Mercatus Center, George Mason University. ``Consequences of
Financing Paid Parental Leave Using Social Security,'' with
Veronique de Rugy and Charles Blahous. Mercatus Policy Brief,
June 2018.
``Reforming the Social Security Disability Insurance Program to
Encourage Work and Labor Force Participation: Lessons from the
United Kingdom,'' with Jack Salmon. Mercatus Policy Brief, June
2018.
``Curbing the Surge in Year-End Federal Government Spending:
Reforming `Use It or Lose It' Rules--2018 Update,'' with Joe
Albanese. Mercatus Research, June 2018.
``Saving Social Security Disability Insurance: Designing and
Testing Reforms Through Demonstration Projects,'' with Jason S.
Seligman. Mercatus Working Paper, June 2018.
``The Role of the Interest Deduction in the Corporate Tax
Code,'' with Hunter Cox. Mercatus on Policy, March 2018.
``Integrating Corporate Taxes: An Important Element of Tax
Reform,'' with Tracy C. Miller. Mercatus on Policy, December
2017.
``Getting to True Tax Reform in 2017: A Better Way,'' with Adam
N. Michel, Veronique de Rugy, and Angela S. Kuck. Mercatus
Policy Primer, April 2017.
``Border Adjustment Tax: What We Know (Not Much) and What We
Don't (All the Rest),'' with Veronique de Rugy and Adam N.
Michel. Mercatus Policy Brief, February 2017.
``Curbing the Surge in Year-End Federal Government Spending:
Reforming `Use It or Lose It' Rules--2016 Update,'' with Adam
N. Michel. Mercatus Research, September 2016.
`` `Fixing' the Tax Code: Key Principles for Successful,
Sustainable Reform,'' with Veronique de Rugy, Matthew D.
Mitchell, Angela S. Kuck, and Adam N. Michel. Mercatus Economic
Perspectives, May 2016.
``The OECD's Conquest of the United States: Understanding the
Costs and Consequences of the BEPS Project and Tax
Harmonization,'' with Adam N. Michel. Mercatus Research, March
2016.
``Biennial Budgeting: A Look at Intents vs. Outcomes,'' with
Angela S. Kuck and Adam N. Michel. Mercatus on Policy, March
2016.
``Don't Put American Innovation in a Patent Box: Tax Policy,
Intellectual Property, and the Future of R&D,'' with Adam N.
Michel. Mercatus on Policy, December 2015.
``Locking Out Prosperity: The Treasury Department's Misguided
Regulation to Address the Symptoms of Corporate Inversions
While Ignoring the Cause,'' with Courtney S. Michaluk and Adam
N. Michel. Mercatus on Policy, December 2015.
``Can a Research and Development Tax Credit Be Properly
Designed for Economic Efficiency?'', with Adam Michel. Mercatus
Research, July 2015.
``Legislative Impact Accounting: Rethinking How to Account for
Policies' Economic Costs in the Federal Budget Process,'' with
Patrick A. McLaughlin. Mercatus Working Paper, June 2015.
``Saving Social Security Disability Insurance: Reforms Within
the Context of Holistic Social Security Reform,'' with Jason S.
Seligman. Mercatus Working Paper, March 2015.
``Options for Corporate Capital Cost Recovery: Tax Rates and
Depreciation,'' with Adam Michel. Mercatus Research, January
2015.
``Curbing the Surge in Year-End Federal Government Spending:
Reforming `Use It or Lose It' Rules,'' with Robert Greene.
Mercatus Working Paper, September 2014.
``The United States' Debt Crisis: Far From Solved,'' with
Veronique de Rugy. Mercatus on Policy, August 2014.
``Reforming the Mortgage Interest Deduction,'' with Jacob
Feldman. Mercatus Working Paper, June 2014.
``Medicaid Overview,'' with John Pulito. Mercatus Research,
December 2013.
``Budget Conference 2013: Principles for a Credible Deal,''
with Veronique de Rugy. Mercatus Research, December 2013.
``The Debt Limit Debate 2013: Addressing Key Myths,'' with
Veronique de Rugy. Mercatus Economic Perspectives, October
2013.
``The Hidden Costs of Tax Compliance,'' with Jacob Feldman.
Mercatus Research, May 2013.
``The Debt Ceiling: Assets Available to Prevent Default,'' with
Veronique de Rugy. Mercatus Research, January 2013.
``Reducing Debt and Other Measures for Improving U.S.
Competitiveness,'' with Jakina Debnam. Mercatus Research Paper,
November 2012.
``Limiting Social Security's Drag on Economic Growth,'' with
Charles Blahous. Mercatus Research Paper, November 2012.
``Taxing Marriage: Microeconomic Behavioral Responses to the
Marriage Penalty and Reforms for the 21st Century,'' with Jacob
Feldman. Mercatus Working Paper, September 2012.
`` `Fixing' the Tax Code: Key Principles for Successful
Reform,'' with Veronique de Rugy and Matthew D. Mitchell.
Mercatus Economic Perspectives, November 2011.
``When Are Tax Expenditures Really Spending? A Look at Tax
Expenditures and Lessons From the Tax Reform Act of 1986,''
with Jacob Feldman. Mercatus Working Paper, November 2011.
``Why the United States Needs to Restructure the Corporate
Income Tax,'' with Nick Tuszynski. Mercatus Working Paper,
November 2011.
``A Sisyphean Task? Attempts to Control Medicare Spending via
the Inpatient Prospective System and the Fee-for-Service
Physician Reimbursement System,'' with John Pulito. Mercatus
Working Paper, September 2011.
``The Debt Limit Debate,'' with Veronique de Rugy. Mercatus
Working Paper, May 2011.
``The Debt Ceiling Debate: What Is at Stake,'' with Veronique
de Rugy. Mercatus Research Summary, April 2011.
``Lessons from the 1986 Tax Reform Act: What Policy Makers Need
to Learn to Avoid the Mistakes of the Past,'' with Jacob
Feldman. Mercatus Working Paper, April 2011.
``The 1 Percent Solution: Balancing the Federal Budget.''
Mercatus Working Paper, February 2011.
``Can We Trust the Social Security Trust Funds?'', with
Veronique de Rugy. Mercatus on Policy, January 2011.
``Uncertainty and Taxes: A Fatal Policy Mix,'' with Katelyn
Christ. Mercatus Working Paper, December 2010.
``Artificially Sweetening the COLA.'' Mercatus on Policy,
November 2010.
U S. Social Security Administration
``Estimated Retirement Benefits in the Social Security
Statement,'' November 2008.
United States Congress--Joint Economic Committee (JEC)--Committee
Reports and Studies
``Reforming the U.S. Corporate Tax System to Increase Corporate
Tax Competitiveness,'' May 2005.
``Providing Tax Equity for Mutual Fund Investors: Changing the
Tax Treatment of Capital Gain Distributions,'' April 2004.
``A Comparison of Tax Distribution Tables: How Missing or
Incomplete Information Distorts Perspectives,'' December 2003.
``The Misleading Effects of Averages in Tax Distribution
Analysis,'' September 2003.
``The Taxation of Individual Retirement Plans: Increasing
Choice for Seniors,'' September 2002.
``Extending the Budget Enforcement Act: Revision of PAYGO Rules
Necessary for Better Tax Policy,'' May 2002.
``The Taxation of Mutual Fund Investors: Performance, Saving,
and Investment,'' April 2001.
``Encouraging Personal Saving and Investment: Changing the Tax
Treatment of Unrealized Capital Gains,'' June 2000.
``A Guide to Tax Policy Analysis: The Central Tendency of
Federal Income Tax Liabilities in Distributional Analysis,''
May 2000.
``A Guide to Tax Policy Analysis: Problems With Distributional
Tax Tables,'' January 2000.
JEC Policy Briefs
``Taxpayers Misclassified in Tax Distribution Analysis,''
Research Report #110-24, July 2008.
``Tax Distribution Tables Can Be Misleading,'' Research Report
#110-12, September 2007.
``Top 10 Percent of Filers Account for Most Federal Income
Taxes,'' Research Report #110-4, April 2007.
``Providing Tax Equity for Mutual Fund Investors,'' Research
Report #109-40, July 2006.
``Federal Income Tax System Is Highly Progressive After Recent
Tax Cuts,'' Research Report #109-36, May 2006.
``Millions of Taxpayers Have Zero or Negative Federal Income
Tax Liability,'' Research Report #109-21, October 2005.
``Tax Distribution Analysis and Shares of Income Taxes Paid--
Updated Analysis,'' Research Report #109-20, October 2005.
``Improve the U.S. Corporate Tax System to Increase Tax
Competitiveness in a Global Economy,'' Research Report #109-8;
May 2005.
``Tax Distribution Analysis and Shares of Taxes Paid,''
Research Report #109-4, April 2005.
Conference Papers and Presentations
``Household Reactions and Strategic Responses to Retirement
Wealth Building and Decumulation in a Low Interest Rate
Environment,'' with Jason S. Seligman. 2017 Symposium--Saving
and Retirement in an Uncertain Financial Environment. Pension
Research Council, Wharton Business School, University of
Pennsylvania, Philadelphia, Pennsylvania. May 4-5, 2017.
``Beyond All or Nothing: Reforming SSDI to Encourage Work and
Wealth,'' with Jason S. Seligma. McCrery-Pomeroy SSDI Solutions
Conference. Committee for a Responsible Federal Budget,
Washington, DC. August 4, 2015.
``Retirement Behavior and the Global Financial Crisis,'' with
John W.R. Phillips. 2011 Symposium--Reshaping Retirement
Security: Lessons From the Global Financial Crisis. Pension
Research Council, Wharton Business School, University of
Pennsylvania, Philadelphia, Pennsylvania. May 5-6, 2011.
``The Politics of Distribution Tables in Tax Policy Analysis.''
Association for Public Policy Analysis and Management (APPAM),
Twenty-Eighth Annual Research Conference, Madison, Wisconsin.
November 2-4, 2006.
``A Comparison of Tax Distribution Tables: How Missing or
Incomplete Information Distorts Perspectives.'' Presented at
the Virginia Tech College of Architecture and Urban Studies
Research Symposium 2006, Blacksburg, Virginia. February 1-2,
2006.
``A Comparison of Tax Distribution Tables: How Missing or
Incomplete Information Distorts Perspectives.'' Presented at
The Heritage Foundation conference titled The Secret Chamber or
the Public Square: How Washington Makes Tax Policy, Washington,
DC. December 9. 2004.
Congressional Testimony
``Curbing Wasteful Year-End Federal Government Spending:
Reforming `Use It or Lose It' Rules.'' United States Senate,
Committee on Homeland Security and Governmental Affairs,
Subcommittee on Federal Spending Oversight and Emergency
Management. Hearing on ``Prudent Planning or Wasteful Binge?
Another Look at End of the Year Spending.'' October 20, 2017.
``Restoring and Modernizing Social Security Through Sustainable
Reform.'' United States House of Representatives, Committee on
the Budget. Hearing on ``Restoring the Trust for Americans at
or Near Retirement.'' July 13, 2016.
``Restoring Equity and Fairness to the Social Security Windfall
Elimination Provision (WEP) and Government Pension Offset
(GPO).'' United States House of Representatives, Committee on
Ways and Means, Subcommittee on Social Security. Hearing on
``Social Security and Public Servants: Ensuring Equal
Treatment.'' May 22, 2016.
``Curbing Wasteful Year-End Federal Government Spending:
Reforming `Use It or Lose It' Rules.'' United States Senate,
Committee on Homeland Security and Governmental Affairs,
Subcommittee on Federal Spending Oversight and Emergency
Management. Hearing on ``Prudent Planning or Wasteful Binge? A
Look at End of the Year Spending.'' September 30, 2015.
``Addressing the Real `Retirement Crisis' Through Sustainable
Social Security Reform.'' United States Senate, Committee on
Finance, Subcommittee on Social Security, Pensions, and Family
Policy. Hearing on ``Strengthening Social Security to Meet the
Needs of Tomorrow's Retirees.'' May 21, 2014.
``Reforming Social Security to Better Promote Retirement
Security.'' United States House of Representatives, Committee
on Ways and Means, Subcommittee on Social Security. Hearing on
``The President's and Other Bipartisan Entitlement Reform
Proposals.'' May 23, 2013.
Increasing America's Competitiveness by Lowering the Corporate
Tax Rate and Simplifying the Tax Code. United States Senate
Committee on Finance. Hearing on ``Extenders and Tax Reform:
Seeking Long-Term Solutions.'' January 31, 2012.
Dissertation
``Distribution Tables and Federal Tax Policy: A Scoring Index
as a Method for Evaluation.'' Virginia Tech, School of Public
and International Affairs, Center on Public Administration and
Policy. 2005.
MarketWatch Articles
``Will President-Elect Trump and Congress `Take a Stand' on
Social Security?'' (December 13, 2016).
``The retirement age for Social Security needs to rise to 70''
(November 7, 2016).
``The good news and the bad news about the 2017 Social Security
increase'' (October 19, 2016).
``Social Security insolvency is now one year closer'' (July 11,
2016).
``Will change come to the Social Security Windfall Elimination
Provision?'' (April 5, 2016).
``Crisis in Social Security disability insurance averted, but
not gone'' (November 30, 2015).
``How to fix the Social Security Disability Insurance program''
(September 30, 2015).
``No cost-of-living adjustment for Social Security in 2016?''
(July 28, 2015).
``Social Security disability fund will run empty next year''
(April 3, 2015).
``Why finding a good doctor will get even harder'' (March 23,
2015).
``Lee-Rubio tax-reform plan presents huge win for retirees''
(March 17, 2015).
``Social Security is in crisis'' (July 31, 2014).
``Keep up the pressure to save Social Security'' (June 25,
2013).
``Give up tax breaks for retirement savers?'' (February 11,
2013).
``Chained CPI: Diet COLA for Social Security'' (December 20,
2012).
``Convert to a Roth IRA before taxes go up'' (December 19,
2012).
``Top money move for a secure retirement'' (November 14, 2012).
The Hill
http://thehill.com/opinion/finance/359355-paint-by-numbers-
lawmaking-waters-down-tax-reform (November 8, 2017).
http://thehill.com/blogs/pundits-blog/finance/334215-is-there-
really-a-retirement-savings-crisis-in-the-us (May 19, 2017).
http://thehill.com/blogs/pundits-blog/economy-budget/327666-
reforming-earned-income-tax-credit-could-be-a-bipartisan (April
18, 2017).
http://thehill.com/blogs/congress-blog/economy-a-budget/238769-
an-actuarial-ombudsman-for-the-public (July 18, 2012).
Roll Call
http://www.rollcall.com/news/opinion/opinion-no-news-bad-news-
looming-social-security-crisis (June 11, 2018).
U.S. News and World Report
https://www.usnews.com/opinion/economic-intelligence/2014/04/
28/congress-wasteful-tax-extenders-bill-is-bad-for-the-economy
(April 18, 2014).
https://www.usnews.com/opinion/blogs/economic-intelligence/
2013/05/28/the-complex-tax-code-hurts-the-economy (May 28,
2013).
https://www.usnews.com/opinion/blogs/economic-intelligence/
2012/09/18/eliminate-the-marriage-tax-penalty (September 18,
2012).
https://www.usnews.com/debate-club/should-the-buffett-rule-
become-law/reducing-spending-not-taxing-millionaires-is-a-real-
solution (April 16, 2012).
https://www.usnews.com/debate-club/do-the-rich-pay-their-fair-
share-in-taxes/claim-that-rich-dont-pay-enough-based-on-
perception-not-fact (December 16, 2011).
16. Speechs (list all formal speeches and presentations (e.g.,
PowerPoint) you have delivered during the past 5 years which are on
topics relevant to the position for which you have been nominated,
including dates):
``Supplemental Transition Accounts for Retirement,'' with Gary
Koenig. Presentation to the National Association of Plan
Advisors. Washington, DC. July 24, 2018.
``Panel Discussion of Henry J. Aaron's Lunch Keynote Address on
Social Security,'' National Academy of Social Insurance, 30th
Annual Policy Research Conference. Washington, DC. January 30,
2018.
``Global Aging and Public Finance,'' National Association of
Business Economics, 59th Annual Meeting, Cleveland, Ohio.
September 24, 2017.
``Household Reactions and Strategic Responses to Retirement
Wealth Building and Decumulation in a Low Interest Rate
Environment,'' with Jason S. Seligman. 2017 Symposium--Saving
and Retirement in an Uncertain Financial Environment. Pension
Research Council, Wharton Business School, University of
Pennsylvania, Philadelphia, Pennsylvania May 4-5, 2017.
``Discussion: Academy Report to the New Administration--
Restoring Social Security to Long-term Balance,'' National
Academy of Social Insurance, 29th Annual Policy Research
Conference. Washington, DC. January 26, 2017.
``Beyond All or Nothing: Reforming SSDI to Encourage Work and
Wealth,'' with Jason S. Seligman. McCrery-Pomeroy SSDI
Solutions Conference, Committee for a Responsible Federal
Budget. Washington, DC. August 4, 2015.
Although I did not have a formal speech written or PowerPoint
presentation, the following discussions on Social Security were
broadcast on C-SPAN:
``Social Security Solvency,'' June 8, 2018; https://www.c-
span.org/video/?446714-1/representatives-john-larson-tom-rice-
discuss-social-security.
Additional C-SPAN broadcasts on other topics besides Social
Security can be found here: https://www.c-span.org/search/
?searchtype=All&guery=Jason+
Fichtner.
Although I did not have a formal speech written or PowerPoint
presentation, the following discussions on retirement security issues
were taped and broadcast by the Brookings Institution:
``Fixing the U.S. retirement system--does Canada have the
answers?'', November 2, 2017; https://www.brookings.edu/events/
fixing-the-u-s-retirement-system-
does-canada-have-the-answers/.
``Are new directions needed in State retirement policy?'',
October 7, 2015; https://www.brookings.edu/events/are-new-
directions-needed-in-state-retirement-policy/.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
I have served in numerous positions in the Social Security
Administration, providing leadership and management of the
Social Security programs. I have served as the Secretary to the
Board of Trustees of the Social Security Trust Funds and as the
lead executive for the Social Security Administration on the
Trustees Working Group, which oversees the methodologies and
assumptions for the Annual Report. I have helped develop and
execute policy for the Social Security Administration. While at
the Social Security Administration, I served as a liaison with
the Social Security Advisory Board, the White House, the
National Economic Council, the Office of Management and Budget,
the Senate Finance Committee, the House Ways and Means
Committee, and various other government and nongovernmental
stakeholders. All of these experiences qualify me to serve as a
member on the Social Security Advisory Board.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections (including participation in future
benefit arrangements) with your present employers, business firms,
associations, or organizations if you are confirmed by the Senate? If
not provide details.
No. The position for which I am being considered does not
require me to sever all connections with my current employers
or associations. I will however be bound by ethics agreements
made with the Office of Government Ethics (OGE), and will sever
any current or future potential or actual conflicts of interest
that are identified by OGE.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
Yes. The position for which I am being considered does not
require me to sever all connections with my current employers
or associations. I will continue to maintain my employment with
Johns Hopkins University and my association as a fellow with
the Bipartisan Policy Center. I will also continue my
association (unpaid) with the National Academy of Social
Insurance. I will however be bound by ethics agreements made
with the Office of Government Ethics (OGE), and will sever any
current or future potential or actual conflicts of interest
that are identified by OGE.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any current and former investments, obligations,
liabilities, or other personal relationships, including spousal or
family employment, which could involve potential conflicts of interest
in the position to which you have been nominated.
N/A.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years (prior to the
date of your nomination), whether for yourself, on behalf of a client,
or acting as an agent, that could in any way constitute or result in a
possible conflict of interest in the position to which you have been
nominated.
N/A.
3. Describe any activity during the past 10 years (prior to the date
of your nomination) in which you have engaged for the purpose of
directly or indirectly influencing the passage, defeat, or modification
of any legislation or affecting the administration and execution of law
or public policy. Activities performed as an employee of the Federal
government need not be listed.
N/A.
4. Explain how you will resolve any potential conflict of interest,
including any that are disclosed by your responses to the above items.
(Provide the committee with two copies of any trust or other
agreements.)
I will consult with the designated agency ethics officer, and I
will not participate personally and substantially in any
particular matter that to my knowledge has a direct and
predictable effect on the financial interests of those in which
I have a business affiliation past, present, or future.
5. Two copies of written opinions should be provided directly to the
committee by the designated agency ethics officer of the agency to
which you have been nominated and by the Office of Government Ethics
concerning potential conflicts of interest or any legal impediments to
your serving in this position.
See attached document for draft preclearance letter from OGE.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency
(e.g., an Inspector General's office), professional association
disciplinary committee, or other ethics enforcement entity at any time?
Have you ever been interviewed regarding your own conduct as part of
any such inquiry or investigation? If so, provide details, regardless
of the outcome.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? Have you ever been interviewed
regarding your own conduct as part of any such inquiry or
investigation? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
I will provide an appropriate response to such requests for
information.
______
United States Office of
Government Ethics
1201 New York Avenue, Suite 500
Washington, DC 20005
_______________________________________________________________________
January 22, 2019
The Honorable Charles E. Grassley
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510
Dear Mr. Chairman:
Under the Ethics in Government Act of 1978, Presidential nominees
requiring Senate confirmation who are not expected to serve in their
Government positions for more than 60 days in a calendar year are not
required to file public financial disclosure reports. The Act, as
amended, however, contains a provision in section 101(b) that allows
the committee with jurisdiction to request any financial information it
deems appropriate from the nominee.
We understand that your committee desires to receive a financial
disclosure report from any Presidential nominee for a position on the
Social Security Advisory Board of the Social Security Administration,
along with a written opinion from this Office regarding any possible
conflicts of interest. Therefore, I am forwarding a copy of the
confidential financial disclosure report (OGE Form 450) of Jason J.
Fichtner, who has been nominated by President Trump for the position of
Member of the Social Security Advisory Board.
We have reviewed the report and have also obtained advice from the
agency concerning any possible conflict in light of its functions and
the nominee's proposed duties. Also enclosed is an ethics agreement
outlining the actions that the nominee will undertake to avoid
conflicts of interest. Unless a date for compliance is indicated in the
ethics agreement, the nominee must fully comply within three months of
confirmation with any action specified in the ethics agreement.
Based thereon, we believe that this nominee is in compliance with
applicable laws and regulations governing conflicts of interest.
Sincerely,
David J. Apol
General Counsel
Enclosures
_______________________________________________________________________
Mr. Daniel F. Callahan
Designated Agency Ethics Official
Social Security Administration
Room 617 Altmeyer Building
6401 Security Boulevard
Woodlawn, MD 21235
July 19, 2018
Dear Mr. Callahan:
The purpose of this letter is to describe the steps that I will
take to avoid any actual or apparent conflict of interest in the event
that I am confirmed as a Member of the Social Security Advisory Board.
As required by 18 U.S.C. Sec. 208(a), I will not participate
personally and substantially in any particular matter in which I know
that I have a financial interest directly and predictably affected by
the matter, or in which I know that a person whose interests are
imputed to me has a financial interest directly and predictably
affected by the matter, unless I first obtain a written waiver,
pursuant to 18 U.S.C. Sec. 208(6)(1), or qualify for a regulatory
exemption, pursuant to 18 U.S.C. Sec. 208(b)(2). I understand that the
interests of the following persons are imputed to me; any spouse or
minor child of mine any general partner of a partnership in which I am
a limited or general partner; any organization in which I serve as
officer, director, trustee, general partner or employee; and any person
or organization with which I am negotiating or have an arrangement
concerning prospective employment.
I am an employee of Johns Hopkins University. I will not
participate personally and substantially in any particular matter that
to my knowledge has a direct and predictable effect on the financial
interests of Johns Hopkins University, unless I first obtain a written
waiver, pursuant to 18 U.S.C. Sec. 208(b)(1), or qualify for a
regulatory exemption, pursuant to 18 U.S.C. Sec. 208(b)(2).
I have resigned from my positions with the Mercatus Center at
George Mason University and Georgetown University. For a period of one
year after my resignation from each of these entities, I will not
participate personally and substantially in any particular matter
involving specific parties in which I know that entity is a party or
represents a party, unless I am first authorized to participate,
pursuant to 5 CFR Sec. 2635.502(d).
I received consulting fees from TIAA and MSL Group. For a period of
one year after I last provided service to each of these entities, l
will not participate personally and substantially in any particular
matter involving specific parties in which I know that entity is a
party or represents a party, unless I am first authorized to
participate, pursuant to 5 CFR Sec. 2635.502(d).
I received honoraria from AARP, the Bipartisan Policy Center, the
University of Pennsylvania, and the Urban Institute. For a period of
one year after I last provided service to each of these entities, I
will not participate personally and substantially in any particular
matter involving specific parties in which I know that entity is a
party or represents a party, unless I am first authorized to
participate, pursuant to 5 CFR Sec. 2635.502(d).
I have been advised that I will likely serve on the board for no
more than 60 days in any period of 365 consecutive days. Accordingly, I
understand that I may not, under 18 U.S.C. Sec. Sec. 203(c)(l) and
205(c)(l), provide any representational services or act as agent or
attorney for another in any particular matter involving specific
parties in which I have participated personally and substantially as a
government official. I also understand that I may not receive a share
of any payment made for such representational services performed by
another. I understand that additional requirements of 18 U.S.C.
Sec. 203(c)(2) and 205(c)(2) will apply to me if I serve for more than
60 days in any period of 365 consecutive days. In that event, l will
comply with all applicable requirements, and I will consult your office
if l have any questions about those requirements.
I will meet in person with you before my first meeting of the
Social Security Advisory Board in order to complete the initial ethics
briefing required under 5 CFR Sec. 2638.305. Within 90 days of my
confirmation, I will document my compliance with this ethics agreement
by notifying you in writing when I have completed the steps described
in this ethics agreement.
Sincerely,
Jason J. Fichtner
______
Questions Submitted for the Record to Jason J. Fichtner, Ph.D.
Questions Submitted by Hon. Chuck Grassley
Question. Some members of this committee asked prior nominees for
advisory positions related to Social Security questions related to
whether the nominees would refrain from freely writing about issues
related to Social Security while they served in the advisory positions.
For the advisory board to which you have been nominated, the
authorizing statute states that ``. . . members shall be chosen on the
basis of their integrity, impartiality, and good judgment. . . .''
My view, and the view of many others, is that you meet those
criteria. And, partly because of that, I don't believe that there
should be any restriction on what you write or your free speech.
My question is whether, in your writing, you strive to be impartial
and exercise good judgment?
Answer. Yes. I always strive to be impartial and exercise good
judgement in both my research, writing, public speaking and teaching.
Question. Your resume says that you are a fellow at the Bipartisan
Policy Center. Can you describe any work related to Social Security
that you have done at that Center, and whether you have worked in
collaboration with Democrats, as the bipartisan part of the Center's
title suggests?
Answer. Thank you for the question, Senator. Just to provide you
and members of the committee with two examples of where I've worked in
a bipartisan manner at the Bipartisan Policy Center, including
Democrats, the first was BPC's report on improving SSDI. The full
report and the list of those I worked with on the report can be found
here: https://bipartisanpolicy.org/report/ssdi-program/.
Below is the list of the working group members--which includes
those who identify themselves as conservatives, liberals, Republicans,
and Democrats: Doug Badger; Alison Barkoff; Henry Claypool; Lisa Ekman;
Jason J. Fichtner; Marty Ford; Connie Garner; Martin Gerry; G. William
Hoagland; Andrew J. Imparato; Pam Mazerski; Martin McGuinness; Jennifer
Laszlo Mizrahi; Jeanne Morin; Lauren Rothfarb; Robert ``Bobby''
Silverstein; James Smith; David Stapleton; Madeleine Will; Aliya Wong;
and Ethel Zelenske.
The second was a paper published by BPC that I co-authored with
Bill Gale of the Brookings Institution and Jeff Trinca on IRS Tax
Administration. The full paper can be downloaded here: https://
bipartisanpolicy.org/wp-content/uploads/2019/04/Tax-Administration-
Compliance-Complexity-Capacity.pdf.
Additionally, though not a BPC project, I published two papers with
the Committee for a Responsible Federal Budget (CRFB) on SSDI reform
chaired on a bipartisan basis by former Congressman Earl Pomeroy and
Congressman Jim McCrery, former Democratic and Republican chairs of the
Social Security Subcommittee of the House Committee on Ways and Means.
For more information, please see the following internet links: http://
www.crfb.org/project/ssdi/ssdisolutions-book and http://www.crfb.org/
project/ssdi/selected-proposals-phase-ii.
______
Questions Submitted by Hon. John Cornyn
Question. As a member of the Social Security Advisory Board, you
will be making recommendations on the quality of service that the
Social Security Administration (SSA) provides to the public. With this
mind, concerns remain about the SSA's decision not to allow States to
test and evaluate all available options to modernize its processing
system for disability claims (``Disability Case Processing System''
(DCPS)). Congress expressed support for these efforts through
appropriations report language in the past 4 fiscal years. Furthermore,
in its December 2019 report, the SSA Inspector General stated it
``could not conclude that SSA's cost and schedule estimates for
developing and implementing DCPS were reasonable.'' Critics also argue
that the DCPS project demonstrates that SSA is not operating in the
best interests of the American public and that States should have the
option to select the best available choice that provides the best
quality of service to the American public.
What is your understanding of the States' permission to install,
test, and select the best option to modernize their case processing
systems?
Do you acknowledge each State's option of this choice? If not, why
not?
What is your understanding of SSA's support to ensure each State
can exercise this option?
Answer. Senator, in general, I am supportive of SSA's efforts to
provide consistency and reliability to the Disability Determination
Services (DDS) and the disability determination process. In concept,
the Disability Case Processing System (DCPS) is designed to accomplish
this goal and, if successful, will help reduce future infrastructure
costs. However, in the December 2019 report you referenced, the OIG
noted that ``. . . SSA plans to continue developing DCPS beyond
November 2019, and it is unknown when DCPS will provide the
functionality needed for a DDS to completely stop using its existing
case processing system.'' I am not familiar with any specific State-
level requests to select their own options for modernizing the
disability case processing system, and therefore can't speak to the
merits of any specific State-level request. That said, I would be
concerned if different States that had different processes for
determination led to different and inconsistent results across the
Nation. I do think it is important that determination processes be
applied uniformly across the country to ensure consistency and fairness
in the delivery of services. If confirmed as a member of the Social
Security Advisory Board, I pledge to discuss with issue further with my
colleagues on the SSAB and to look into the matter further with SSA.
______
Question Submitted by Hon. John Thune
Question. As someone who has worked in multiple roles within the
Social Security Administration, what do you think the agency's biggest
challenge is? In other words, knowing what you know, what topics do you
think the Social Security Advisory Board should be focusing on?
Answer. Senator, thank you for the question. It's not just one big
challenge. There are multiple big challenges that the Social Security
Administration faces, and which the Social Security Advisory Board
should be focusing on. For example, SSA faces significant budgetary
constraints. In an environment where many government agencies are being
asked to do more with less, SSA needs to effectively staff and manage
approximately 1,200 field offices and work to reduce the disability
backlog. Further, SSA needs to continue to modernize its Information
technology infrastructure for records management and service delivery.
Additionally, SSA needs to constantly strive to protect its systems
from cyber-attacks and protect beneficiary information. SSA also needs
to remain vigilant in reducing improper payments, including issues
where SSA made a mistake in calculating the proper benefit amount or
sent payment to the wrong person; a failure to obtain accurate
information necessary to continue benefits or provide the proper
benefit amount; prevent individuals from fraudulently claiming
benefits, and strive to minimize and prevent identify theft. I will
also note that I think the SSAB should continue to provide
opportunities for Board members to visit field offices, meet and talk
with employees, and talk with members of the public. This of course
requires budgetary resources, but meetings with the employees and the
public should be one of the Board's priorities.
______
Questions Submitted by Hon. Ron Wyden
value added
Question. I know you are familiar with the reports and work that
the Advisory Board has produced. There are lots of organizations that
produce reports on Social Security policy: CRS, GAO, CBO, to just name
a few. I think the unique value of the Advisory Board is that the
Advisory Board members often meet with people all across the country:
Social Security employees, beneficiaries, young workers, and community-
based organizations.
I hope you will work to promote this unique aspect of the Advisory
Board.
Can you comment on what outreach you will undertake if confirmed?
Answer. Senator Wyden, thank you for this question. As you note, it
is very important that members of advisory boards meet with the public
and receive input from those that are directly affected by agency
decisions and board recommendations. I mentioned in a response to a
question from Senator Thune that I felt one of the areas that the SSAB
should prioritize is meeting with the public. In my response I wrote
that ``. . . I think the SSAB should continue to provide opportunities
for Board members to visit field offices, meet and talk with employees,
and talk with members of the public. This of course requires budgetary
resources, but meetings with the employees and the public should be one
of the Board's priorities.'' This would include meeting with employers,
employees, beneficiaries, younger workers, older workers, community-
based organizations, and members of Congress and their staff.
consensus style of the board
Question. As you are probably aware, most of the material the SSAB
produces are the consensus opinion of the Board. It is a rare SSAB
product that includes ``minority views'' or ``dissenting opinions,''
although it does seems to be happening more recently these days.
Striving for consensus is a very important--and refreshing--feature of
the Advisory Board.
Do you agree about the importance of continuing the consensus
operating style of the Advisory Board?
Answer. Yes, I do. The SSAB is an advisory board, not a governing
board. Both the Board's ability for its recommendations to carry weight
and the legitimacy of its recommendations rest in the Board's ability
to reach consensus in a bipartisan manner.
balancing roles
Question. You've testified many times before Congress and are a
strong advocate--by writing articles and giving speeches--for your
policy views. There's nothing wrong with that. The committee wants
smart people who know the material working for the SSAB. At the same
time, we want you to be able to work collegially with your colleagues.
Do you see any problem with nominees to a Federal advisory board
like the SSAB writing articles on controversial subjects, especially on
issues that may come before the Board?
Answer. I actually currently have a good collegial working and
personal relationship with members of the SSAB. Further, I always
strive to be impartial and exercise good judgement in my research,
writing, public speaking, and teaching. I do think that it's okay to
write articles on issues that may come before the Board, but I think
it's important that my role on the Board, if confirmed, not be one that
uses the position as a vehicle to advance any personal opinions that I
may have. If confirmed, I would help make sure that the best possible
information on all the issues possible to improve the programs and the
administration of the Social Security Administration are presented to
the Congress, the White House, and the public in an objective manner.
______
Questions Submitted by Hon. Maria Cantwell
social security administration accessibility issues
Question. Over the past 20 years, nearly one in 10 Social Security
field offices has closed, and average wait times have increased
(source: Washington Post). In Washington State, two of our Social
Security benefits offices--in the Belltown and International District
neighborhoods--were merged into the Jackson Federal building in
downtown Seattle. This has created access issues for many beneficiaries
who have to navigate public transportation and other barriers in order
to reach the new office. In-person help is crucial for seniors to
understand their benefits. These office consolidations are not only
reducing access, but they are also contributing to longer wait times
while a record number of people are reaching retirement age every day.
Will you commit to providing recommendations to the Social Security
Administration (SSA) to review the office closures and their effects on
wait times and access?
Answer. If confirmed, I will work with my colleagues on the SSAB to
provide recommendations to SSA on how best to determine whether field
offices should be closed or consolidated, or whether and where new
field offices should be open, balancing SSA's resource constraints with
service delivery needs, including effects on wait times and access.
Question. Will you prioritize keeping field offices open to ensure
seniors have access to in-person assistance with their Social Security
benefits?
Answer. The SSAB does not have the authority to direct the
allocation of SSA's resources. As an advisory board, it only makes
recommendations. If confirmed, I will work with my colleagues and SSA
on recommendations to ensure that in-person service delivery needs
remain a viable option for beneficiaries and the public.
administrative law judges at social security
Question. As you know, administrative law judges (ALJs) perform
adjudication of Social Security benefit cases, such as appeals. It is
essential that they remain independent and not politically influenced
in making decisions about earned benefits. However, in July 2018,
President Trump issued an executive order to reclassify ALJs so they
can be selected based on their political views. That is why I
introduced a bipartisan bill--S. 2348, the ALJ Competitive Service
Restoration Act--to restore administrative law judges to the
competitive service. One of the functions of the Social Security
Advisory Board is to make recommendations with respect to the quality
of service that SSA provides the public.
If confirmed, will you commit to respecting the independence of
ALJs at the Social Security Administration? What steps would you take
to ensure non-partisanship is restored to the system?
Will you respect the independence of any audits by the Inspector
General into the agency's administrative law judges?
Answer. I fully agree with ensuring due process and that people
denied benefits should have a right to have their case heard before an
independent administrative law judge (ALJ). I also believe that justice
applied inconsistently across the country denies justice fairly applied
to all. An ALJ should not face political pressure for partisan purposes
or gain. But that doesn't mean quality standards shouldn't be used or
that ALJs are above oversight or review by the OIG. Further, I've
always respected the independence of the OIG and will continue to do
so.
______
Questions Submitted by Hon. Sherrod Brown
Question. On November 18, 2019, the Social Security Administration
issued a Notice of Proposed Rulemaking, ``Rules Regarding the Frequency
and Notice of Continuing Disability Reviews.''
Are you at all concerned that this proposal will negatively affect
disabled Social Security and Supplemental Security Income
beneficiaries?
Are you concerned that this proposal will add to--instead of
reduce--the Social Security Administration's disability backlog?
Answer. Any concern I may have would depend on how the rule is
implemented and evaluated. Continuing Disability Reviews, or CDRs, are
an important part of SSA's program integrity measures. CDRs help to
ensure that beneficiaries who have medically improved and no longer
meet program eligibility rules no longer continue to receive benefits.
Any change to the rules regarding the administration of the SSDI and
SSI programs should be done in a manner so that proper evaluation can
be performed to ensure any rule changes are having their intended
effects and are not placing an undue burden on beneficiaries. Any
change to the rules that would increase CDRs could result in additional
appeals that would have to first be addressed at the State-level
disability determination offices, which if not properly funded, could
result in less resources dedicated to reducing the SSDI backlog. I
fully support the budgetary funding necessary for SSA to provide both
adequate staffing levels to conduct and complete CDRs on a timely basis
and continue to reduce the SSDI backlog, and to ensure that there is
adequate staffing to handle any additional appeals as a result of
cessation of benefits due to CDRs.
Question. Office of Management and Budget Director Mick Mulvaney
has stated SSDI is ``a very wasteful program.'' Do you agree with that?
Answer. I do not know the context in which Director Mulvaney made
such a statement. From my own viewpoint, if the term ``wasteful'' is
meant profligate or extravagant, then no, I do not think the SSDI
program is wasteful. If ``wasteful'' is meant money that is spent that
shouldn't be, then there is some amount of improper payments in the
SSDI program, which is why I support SSA's efforts to improve program
integrity in the SSDI program.
Question. Do you believe too many people receive SSDI benefits?
Answer. I neither believe that too many, nor too little, people
receive SSDI benefits. Those who meet the program's eligibility
requirements should receive benefits.
Question. Do you believe there are people currently receiving SSDI
benefits who should not be? If so, do you believe it is be possible to
develop a means to identify beneficiaries, based off of demographic
data or other trends, who are likely to be people receiving benefits
who should not be?
Answer. First, while not rampant, there is fraud in the SSDI
program and, hence, by definition, there are some people receiving
benefits who should not be. I'm encouraged by the joint work of SSA and
the OIG Cooperative Disability Investigation (CDI) units in helping to
reduce fraud in the program. Second, the use of data analytics and
probability modeling can help identify people who are likely to receive
SSDI benefits and fast-track a determination. SSA does this, for
example, with the Quick Disability Determinations process. Data can
also be used to model and suggest which people might no longer be
eligible for benefits. But such models should only help inform and
prioritize workload and resource allocation resources for the agency,
including CDRs, or for targeting those that may be better suited for
work demonstration projects. Such models should never be the sole
determination though of who should and should not receive benefits.
Question. Do you believe the Social Security Administration should
monitor the social media posts of SSDI applicants and beneficiaries,
for any reason?
Answer. I do think there are some valid reasons for SSA to review
social media posts for purposes of ensuring that fraud isn't being
committed. That said, social media posts can be misleading or someone
reviewing social media posts may not understand the full and proper
context. Hence, social media posts should never be the sole
determination through which a person is denied benefits or removed from
a program, and it's probably best to leave any review of social media
under the domain of the OIG.
Question. The SSI program's asset limits have not been updated
since 1989. In what ways, if any, do you believe it would be
appropriate to reform SSI's asset limits?
Answer. The SSI's program asset limits are confusing to
beneficiaries and have not been updated to reflect inflation. I support
a review of the current asset limits to bring them up to 2020 dollar
values and further research on how to better communicate program rules
to the public.
Question. In your position on the Advisory Board, do you plan to
advocate for raising the Social Security retirement age or means
testing Social Security benefits? If you'd support means testing Social
Security benefits, please describe the circumstances under which you
believe this is appropriate and how you would apply it.
Answer. Should I be confirmed as a member of the Social Security
Advisory Board, I would not view my position as one that should or
would advocate for any particular reform position, but rather help make
sure that the best possible information on all the reforms possible to
improve the programs and ensure the solvency of the trust funds are
presented to the Congress, the White House, and the public in an
objective manner.
Question. Do you agree that it is crucial for the due process of
the American people that they have Social Security hearings in front of
administrative law judges who are independent and completely free from
political pressure? Are you concerned with the ongoing effort to
obstruct that independence from this administration?
Answer. I fully agree with ensuring due process and that people
denied benefits should have a right to have their case heard before an
independent administrative law judge (ALJ). I also believe that justice
applied inconsistently across the country denies justice fairly applied
to all. An ALJ should not face political pressure for partisan purposes
or gain. But that doesn't mean quality standards shouldn't be used or
that ALJs are above oversight or review by the OIG.
______
Questions Submitted by Hon. Robert P. Casey, Jr.
Question. You have written extensively about how you believe Social
Security should be reformed and in what ways you believe Social
Security retirement and disability benefits should be modified. For
example, you have stated that the full retirement age for Social
Security retirement benefits should be increased, and in a February
2019 paper with Jason Seligman titled ``Developing Social Security
Disability (SSDI) Reform Demonstrations to Improve Opportunities and
Outcomes Based on Lessons Learned,'' you proposed making all disability
benefit awards temporary. Do you continue to stand by all of the
proposals to reform Social Security retirement and disability benefits
that you have put forward in the past? Will you continue to advocate
for those changes to Social Security retirement and disability benefits
if you are confirmed?
Answer. I stand by my research. That said, should I be confirmed as
a member of the Social Security Advisory Board, I would not view my
position as one that should or would advocate for any particular reform
position, but rather help make sure that the best possible information
on all the reforms possible to improve the programs and ensure the
solvency of the trust funds are presented to the Congress, the White
House, and the public in an objective manner.
Question. During the hearing, you stated that one of your top
research priorities would be ``fraud, waste, and abuse.'' Can you state
specifically what you consider to fall into these categories and
exactly what you intend to focus on should you be confirmed?
Answer. Issues of ``fraud, waste, and abuse'' are often
collectively referred to under ``improper payments.'' Examples include
issues where SSA made a mistake in calculating the proper benefit
amount or sent payment to the wrong person, a failure to obtain
accurate information necessary to continue benefits or provide the
proper benefit amount, individuals fraudulently claiming benefits, and
identify theft. Reducing improper payments is a priority for SSA and
will be a priority of mine, should I be confirmed. Improper payments
can be reduced through more data sharing agreements, staffing
Cooperative Disability Investigations (CDIs), improving SSA's IT
infrastructure, ensuring adequate staffing to process beneficiary
requests.
Question. During the hearing, you stated that among your top
research priorities are demonstration projects for individuals on SSDI.
Can you state specifically what types of demonstration projects you are
referring to and how you believe these demonstration projects should be
implemented?
Answer. Sections 821-23 of the Bipartisan Budget Act of 2015
granted expanded authority for the Social Security Administration to
engage in demonstration projects aimed at improving the opportunity for
disability beneficiaries to remain attached to the labor force or
return to work. Piloting reforms via demonstration projects is an
important part of that process. However, while there is strong interest
in pilots, there is also strong skepticism in them given prior
experiences with SSDI demonstration projects. U.S. government agencies
and the research community generally agree the demonstration process
has suffered from weak design and execution. Thus, strong interest in
pilots now includes some basic questions: which agency or entity should
design them, who should administer them, how to ensure adequate data
collection, whether participation should be voluntary, and when pilots
should be expanded or discontinued. Fortunately, past demonstration
projects and the program design literature offer important lessons. If
confirmed, I will work with my colleagues on the SSAB and stakeholders
to help provide recommendations to SSA in the proper design and
evaluation of demonstration projects that are meant to strive toward
three objectives: (1) understanding whether and to what extent each
feature might increase reengagement in the workforce, (2) reducing exit
from the workforce, and (3) better understanding the interacting
benefits of other social support programs.
Question. Any changes to the way in which Social Security programs
are administered or benefits are delivered to beneficiaries can have
serious and significant effects on the lives of millions of Americans.
To understand these potential effects, it is important to not only
consult academic experts and Social Security career professionals, but
stakeholder and advocacy organizations that work with Social Security
claimants daily as well. If you are confirmed, will you commit to
meeting with constituent and advocacy groups of Social Security
claimants when evaluating current Social Security practices and policy?
Answer. Yes.
______
Question Submitted by Hon. Catherine Cortez Masto
Question. As you know well, seniors on Social Security who have
elected to enroll in Medicare Part B have their premiums for that
program deducted from their Social Security checks. It's an incredibly
convenient mechanism that boosts enrollment in Part B, helping to
ensure seniors' access to physician services. But we've begun to hear
from some organizations that it would be helpful to have the option to
pull Social Security out of the mix and pay those premiums directly to
CMS on behalf of their members. Is that a request you've come across
before? As a Social Security advisor, what would your take be on
efforts to boost enrollment in Part B by allowing for premium
sponsorship?
Answer. I am not familiar with that request. But I pledge to you
that I will look into this issue further, should I be confirmed as a
member of the Social Security Advisory Board. Obviously, ensuring that
Medicare Part B premiums continue to be paid in a convenient and secure
manner is very important.
______
Prepared Statement of Hon. Chuck Grassley,
a U.S. Senator From Iowa
Today the Finance Committee will hear from three nominees. We will
hear from a nominee to be an Assistant Secretary at the Department of
the Treasury, a nominee to be an Assistant Secretary at the Department
of Health and Human Services, and a nominee to the Social Security
Advisory Board.
First we will hear from Kipp Kranbuhl, nominated to be Assistant
Secretary of the Treasury for Financial Markets. This position is
responsible for Federal debt management and essentially works to
finance the Federal Government. Though this position certainly does not
set Federal fiscal policy, which is done by Congress, it carries out
the day-to-day operations to keep the government funded so it may carry
out all of the programs our constituents depend on.
Next we will hear from Sarah Arbes, who is nominated to be
Assistant Secretary for Legislation at the Department of Health and
Human Services. Ms. Arbes has been Acting Assistant Secretary for
Legislation for the past 8 months, so I'm pleased we are working to
confirm her for this important position. Senators on this committee and
their offices are likely familiar with Ms. Arbes, as she was the Deputy
ASL prior to her serving in the acting capacity. I have greatly
appreciated her assistance on efforts to lower prescription drug costs
and on other issues. I know we are working through problems with HHS
regarding its responses to written inquires and requests from myself
and other Senators on this committee. I appreciate those efforts, and I
am pleased that the committee finally seems to be receiving some
digital productions on very longstanding requests. However, I have been
frustrated by the pace of these negotiations and that certain
productions so far have been provided multiple times in an unusable
format. I look forward to resolving this issue quickly and hope our
staffs can continue a productive dialogue. I have long held that the
Department must be responsive to congressional inquiries, and I ask
that Ms. Arbes focus on ensuring prompt, meaningful, and efficient
responses. I also note that, while the ASL serves as top advisor to the
Secretary on legislative matters, the position is not directly
responsible for regulations issued by the Department or its agencies. I
ask Senators to keep that in mind as we conduct this hearing.
Finally, we will hear from Jason Fichtner, nominated to the Social
Security Advisory Board. Created as a ``bipartisan, independent Federal
Government agency established in 1994 to advise the President, the
Congress, and the Commissioner of Social Security on matters of policy
and administration,'' the Social Security Advisory Board is comprised
of seven members. Dr. Fichtner is one of the three who are appointed by
the President.
Thank you all for your willingness to serve and for your testimony
here today.
______
Prepared Statement of Kipp Kranbuhl, Nominated to be Assistant
Secretary for Financial Markets, Department of the Treasury
Chairman Grassley, Ranking Member Wyden, and members of the
committee, thank you for the opportunity to appear before you today. I
am honored to be the President's nominee to be Assistant Secretary of
the Treasury for Financial Markets, and I am grateful for Secretary
Mnuchin's confidence in me.
Before proceeding, I would like to take a moment to acknowledge the
love and support of my family, colleagues, and friends, including those
here with me: my wife of 16 years, Page, whose years of public service
working on Capitol Hill for Senator Alexander and others has inspired
me; our two curious and determined children, Curry and Turner; my
mother, Dr. Ann Weichert Kranbuhl; and my father, Dr. Michael Kranbuhl,
who was unable to join us today. Their tireless work as physicians in
southwest Ohio instilled in me the value of helping others.
For the past 22 years, I have worked in the financial markets and
securities industry. Through this work, I developed practical
experience with many of the policy issues covered by Treasury's Office
of Financial Markets. This has enabled me to appreciate the impact that
many of our Nation's policies and regulations have on all Americans.
Since the spring of 2017, I have been privileged to serve in a
variety of capacities within the Office of Domestic Finance at the
Treasury Department, and I have appreciated the opportunity to engage
with many of you and your staff throughout this time.
I began my work at the Treasury Department as the Deputy Assistant
Secretary for Small Business, Community Development, and Affordable
Housing Policy. After roughly a year, I was asked to take on the role
of Acting Assistant Secretary for Financial Institutions. I held this
position for nearly a year prior to taking on my current role as the
Principal Deputy Assistant Secretary for Financial Markets, where I
have worked with Treasury's teams from the Offices of Federal Finance,
Capital Markets, and Public Finance.
In my time at Treasury, I have led or participated in hundreds of
stakeholder meetings in order to gather input from a broad range of
sources so as to inform our perspectives. Through these efforts, I have
worked with others at Treasury to formulate policy recommendations that
have led to significant progress toward improving the competitiveness
of the American financial system, while ensuring that taxpayer
protection and safety and soundness are at the forefront of everything
that we do. We have worked closely with our executive branch colleagues
in other departments and regulatory agencies, as well as Congress, in
order to reduce the risks to the financial markets and the American
people, while fostering the functioning of vibrant financial markets.
We are also responsible for the financing of the Federal Government
and the management and issuance of Federal debt--the Treasury
Department's original purpose, and one of its most important. Here, we
have worked diligently and successfully to maintain our commitment to
achieving the lowest cost of financing for the American taxpayer by
expanding both our product portfolio and our investor base.
Additionally, while keeping the interests of our Nation at the top
of mind, we have worked closely with our international partners in
order to prepare for the continuing evolution of the global financial
markets amidst ever-changing times.
As I approach the Treasury building each morning on my way to work,
I walk past scores of visitors who have come to Washington from all
parts of our country, and who are lined up to catch a glimpse of our
Federal buildings and of how our government functions. As I do, I am
reminded of the responsibility and commitment that I have made to each
of them as Americans. They inspire, focus, and motivate me.
If confirmed for this position, I look forward to continuing to
work closely with Congress, Secretary Mnuchin, the outstanding Treasury
staff, and others in the administration, and to continuing to serve the
American people.
Thank you again for the honor of this hearing, and I look forward
to answering your questions.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Michael Kipp Kranbuhl. I
primarily use the name Kipp Kranbuhl.
2. Position to which nominated: Assistant Secretary for Financial
Markets, United States Department of the Treasury.
3. Date of nomination: October 15, 2019.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: Cincinnati, Ohio, September 17, 1976.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list all secondary and higher education institutions,
dates attended, degree received, and date degree granted):
Cincinnati Country Day School.
Dates attended: August 1990 to June 1994.
Degree received: High school diploma.
Date degree granted: June 1994.
Vanderbilt University.
Dates attended: August 1994 to May 1995.
Degree received: N/A.
Date degree granted: N/A.
Duke University.
Dates attended: August 1995 to May 1998.
Degree received: Bachelor of arts (May 1998); Major: political
science; Minor: economics.
University of Michigan Business School.
Dates attended: August 2002 to April 2004.
Degree received: Masters of business administration (April
2004).
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment for each job):
Wheat First Union Securities/First Union Securities, Inc.
Title and description of job: Financial analyst (investment
banking and corporate finance).
Location: Richmond, Virginia.
Dates of employment: July 1998 to June 2000
Petra Capital Partners.
Title and description of job: Associate (direct lending and
private equity investing).
Location: Nashville, Tennessee.
Dates of employment: July 2000 to June 2002.
Overseas Private Investment Corporation.
Title and description of job: Summer associate (direct
lending).
Location: Washington, DC.
Dates of employment: May 2003 to August 2003.
Gladstone Management Corporation.
Title and description of job: Associate/principal/director
(direct lending and private equity investing).
Location: McLean, Virginia.
Dates of employment: March 2005 to February 2016.
Self-Employed.
Description of job: Private equity consulting.
Location: Washington, DC.
Dates of employment: February 2016 to June 2017.
U.S. Department of the Treasury.
Title: Principal Deputy Assistant Secretary, Financial Markets.
Location: Washington, DC.
Dates of employment: August 2019 to present.
Title: Acting Assistant Secretary, Office of Financial
Institutions.
Location: Washington, DC.
Dates of employment: July 2018 to June 2019.
Title: Deputy Assistant Secretary, Small Business, Community
Development, and Affordable Housing Policy.
Location: Washington, DC.
Dates of employment: June 2017 to August 2019.
10. Government experience (list any current and former advisory,
consultative, honorary, or other part-time service or positions with
Federal, State, or local governments held since college, including
dates, other than those listed above):
None other than those listed in question 9.
11. Business relationships (list all current and former positions held
as an officer, director, trustee, partner (e.g., limited partner, non-
voting, etc.), proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, other business enterprise, or
educational or other institution):
Board positions for Gladstone Investment Corporation and
Gladstone Capital Corporation Portfolio companies:
Chase Doors Corporation, board member of the Gladstone
Investment Corporation portfolio company and its affiliates, April 2009
to December 2010.
Cavert Wire Company, board member of the Gladstone
Investment Corporation portfolio company and its affiliates, May 2009
to September 2015.
Sunshine Media True North Custom Publishing, board member of
the Gladstone Capital Corporation portfolio company and its affiliates,
January 2011 to April 2013.
Behrens Manufacturing, board member of the Gladstone
Investment Corporation and Gladstone Capital Corporation portfolio
company and its affiliates, December 2013 to February 2016.
Consulting Relationships:
Gladstone Management Corporation, employed full time--March
2005 to February 2016. Consulting on strategic options for various
Gladstone portfolio companies and paid directly by Gladstone Management
Corporation--February 2016 to September 2016.
Behrens Manufacturing, LLC, consulting on corporate strategy
and paid directly by Behrens Manufacturing--October 2016 to December
2016. Board member (per the above) of the Gladstone Investment
Corporation and Gladstone Capital Corporation portfolio company and its
affiliates, December 2013 to February 2016.
Galaxy Technologies, consulting on corporate strategy--July
2016 to November 2016 and paid directly by Galaxy Technologies.
Kathryn A. Weichert, M.D., Inc., consulting and assisting on
record-keeping activity--2004-2011.
Charitable or Educational Organizations:
Weichert-Kranbuhl Family Foundation, treasurer of the
Charitable Foundation, 1998 to June 2017.
National Child Research Center (Washington, DC), board
member of the school, 2012 to 2015.
Nashville's Table (Nashville, TN), board member of the
charitable organization focused on food rescue and distribution, 2001-
2003.
The Tomorrow Fund (Nashville, TN), board member of
charitable foundation within the Community Foundation of Middle
Tennessee, 2001-2002.
Professional Organizations:
Nashville Healthcare Council's Leadership Healthcare
(Nashville, TN), board member of the professional organization, 2010 to
2013.
12. Memberships (list all current and former memberships, as well as
any current and former offices held in professional, fraternal,
scholarly, civic, business, charitable, and other organizations dating
back to college, including dates for these memberships and offices):
Social Organizations: Chevy Chase Club (Chevy Chase, MD)--
member 2010 to present; Metropolitan Club (Washington, DC)--
member 2018 to present; Kappa Sigma Fraternity, Duke
University--member 1996 to 1998.
13. Political affiliations and activities:
a. List all public offices for which you have been a candidate
dating back to the age of 18.
None.
b. List all memberships and offices held in and services
rendered to all political parties or election committees,
currently and during the last 10 years prior to the date of
your nomination.
None.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years prior to the date of your nomination.
Portman for Senate Committee (Senator Rob Portman).
Date: June 2, 2015.
Amount: $250.
Carter for Governor (Jason Carter for Governor of Georgia).
Date: June 30, 2014.
Amount: $150.
Alexander for Senate (Senator Lamar Alexander).
Date: May 13, 2013.
Amount: $500.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement received
since the age of 18):
University of Michigan merit scholarship recipient.
Date: August 2002-April 2004.
Cum laude, Duke University.
Date: May 1998.
15. Published writings (list the titles, publishers, dates, and
hyperlinks (as applicable) of all books, articles, reports, blog posts,
or other published materials you have written):
None.
16. Speeches (list all formal speeches and presentations (e.g.,
PowerPoint) you have delivered during the past 5 years which are on
topics relevant to the position for which you have been nominated,
including dates):
Deputy Assistant Secretary, Small Business, Community
Development and Affordable Housing Policy:
Urban Institute/JP Morgan Chase Convening, Washington, DC--
September 25, 2017.
National Development Council Panel, Washington, DC--October
23, 2017.
American Bar Association, Community Reinvestment Act
Discussion, Washington, DC--January 19, 2018.
Consumer Bankers Association, Orlando, Florida--March 13,
2018.
House of Representatives--Committee on Oversight and
Government Reform: Subcommittee on Intergovernmental Affairs, and
Subcommittee on Government Operations--May 22, 2018.
Acting Assistant Secretary, Financial Institutions:
P-20 Conference (Electronic Payments Industry), Atlanta,
Georgia--October 10, 2018.
Council of Independent Insurance Agents and Brokers, Annual
Insurance Legislative Summit, Washington, DC--Fedruary 13, 2019.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
I have worked in the securities industry focusing on investing
debt and equity capital since 1998 and have first-hand
experience with policy issues covered by the Office of
Financial Markets within the Office of Domestic Finance. I
believe that I bring an experiential lens to analyzing many of
these issues, as I am able to quickly assess the practical
impact of many of our Nation's policies and regulations.
Additionally, I have been working at the Department of Treasury
since June 2017, where I have been a leader within the Office
of Domestic Finance, serving as a Deputy Assistant Secretary
throughout that period. I have also held a number of related
roles, including serving as Acting Assistant Secretary for
Financial Institutions for nearly a year from July 2018 until
late June 2019, and Principal Deputy Assistant Secretary for
Financial Markets since August 2019.
I would be honored to serve the Department of the Treasury and
the American people in this new capacity and would do so with
focus, dedication, and commitment to the tasks at hand and to
the challenges that will inevitably be presented.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections (including participation in future
benefit arrangements) with your present employers, business firms,
associations, or organizations if you are confirmed by the Senate? If
not, provide details.
I do not have any current connection with any employer other
than the U.S. Department of Treasury.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any current and former investments, obligations,
liabilities, or other personal relationships, including spousal or
family employment, which could involve potential conflicts of interest
in the position to which you have been nominated.
Any potential conflicts of interest have been identified and
resolved in accordance with the terms and conditions of my
ethics agreement with the Department of the Treasury, which is
documented by the letter to Brian Sonfield, Designated Agency
Ethics Official and Assistant General Counsel for General Law
and Ethics. Should any potential conflict of interest arise in
the future, I will seek guidance from a Treasury ethics
official.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years (prior to the
date of your nomination), whether for yourself, on behalf of a client,
or acting as an agent, that could in any way constitute or result in a
possible conflict of interest in the position to which you have been
nominated.
Any potential conflicts of interest have been identified and
resolved in accordance with the terms and conditions of my
ethics agreement with the Department of the Treasury, which is
documented by the letter to Brian Sonfield, Designated Agency
Ethics Official and Assistant General Counsel for General Law
and Ethics. Should any potential conflict of interest arise in
the future, I will seek guidance from a Treasury ethics
official.
3. Describe any activity during the past 10 years (prior to the date
of your nomination) in which you have engaged for the purpose of
directly or indirectly influencing the passage, defeat, or modification
of any legislation or affecting the administration and execution of law
or public policy. Activities performed as an employee of the Federal
government need not be listed.
In my roles at Gladstone and with the Nashville Healthcare
Council, I participated in occasional industry ``fly-in''
events on Capitol Hill.
4. Explain how you will resolve any potential conflict of interest,
including any that are disclosed by your responses to the above items.
(Provide the committee with two copies of any trust or other
agreements.)
Any potential conflicts of interest have been identified and
resolved in accordance with the terms and conditions of my
ethics agreement with the Department of the Treasury, which is
documented by the letter to Brian Sonfield, Designated Agency
Ethics Official and Assistant General Counsel for General Law
and Ethics. Should any potential conflict of interest arise in
the future, I will seek guidance from a Treasury ethics
official.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency
(e.g., an Inspector General's office), professional association,
disciplinary committee, or other ethics enforcement entity at any time?
Have you ever been interviewed regarding your own conduct as part of
any such inquiry or investigation? If so, provide details, regardless
of the outcome.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? Have you ever been interviewed
regarding your own conduct as part of any such inquiry or
investigation? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
Questions Submitted for the Record to Kipp Kranbuhl
Questions Submitted by Hon. Chuck Grassley
Question. Recent reports identify that Treasury will issue a 20-
year debt security, and is considering other long-term debt
instruments. As I understand it, over the past several years, Treasury
and the Treasury Borrowing Advisory Committee--or TBAC--and other
market participants have analyzed and proposed issuing the 20-year
Treasury bond.
My understanding is also that over many administrations, Treasury's
financing objective has been ``to achieve the lowest borrowing cost,
over time, for the Federal Government's financing needs.'' And that is
done by Treasury's commitment to regular and predictable issuance of
securities across a wide range of types of securities.
As former Treasury Secretary Lew said: ``We seek to finance the
government at the least possible cost to taxpayers over time, and we
will continue to evaluate other potential new products to meet that
goal.'' So, it sounds like Treasury is fairly regularly looking at
various ways in which we issue debt.
Could you give an overview of the depth of analysis that Treasury
seems to regularly engage in, including work with the TBAC, to ensure
that we achieve the lowest borrowing cost over time?
Answer. As part of our mission to finance the government at the
least cost to the taxpayer over time, Treasury is always evaluating its
existing financing approach and considering how best to prepare for
future financing needs. Treasury regularly engages with a broad range
of market participants, including the primary dealers, the Treasury
Borrowing Advisory Committee, and investors. Input from market
participants helps Treasury to understand key developments in the
Treasury market and identify consistent sources of demand for Treasury
securities. As an example, Treasury recently announced plans to
introduce a 20-year bond, which we expect to increase Treasury's
financing capacity based on strong demand from many segments of the
market, including from pensions and other long-term investors.
Question. Members of this committee had difficult times getting
information from Treasury Secretaries Geithner and Lew when the U.S.
approached a debt limit. That is very unfortunate, because information
about our government's finances, including how much cash is in the
Federal till, should not be something that is withheld from members of
this committee or from the American people.
In response to reasonable requests for information from Congress,
do you commit to a policy of responsiveness?
Answer. Yes.
______
Question Submitted by Hon. John Thune
Question. As you mentioned in your opening statement, the issuance
of Federal debt is one of the key functions of the Treasury Department
that you would oversee as Assistant Secretary. In an effort to
accommodate our Nation's future borrowing needs in the most fiscally
responsible way for taxpayers, what specific actions has Treasury taken
as of late to finance our debt that you feel have been most effective
toward meeting this end?
Answer. Treasury's mission in debt management is to finance the
government at the least cost to the taxpayer over time. Treasury is
always evaluating its existing financing approach and considering how
best to prepare for future financing needs.
To this end, Treasury has recently taken several important actions
to improve our suite of securities offerings. As announced on January
16, 2020, Treasury plans to introduce a 20-year bond in the first half
of this year. Additionally, Treasury in recent years enhanced and
expanded its Treasury Inflation Protected Securities offerings and
launched a 2-month Treasury bill. These actions were informed by deep
engagement with a broad range of market participants and help Treasury
to maximize demand for its securities, thereby delivering the lowest-
cost financing for the taxpayer.
______
Questions Submitted by Hon. Todd Young
Question. Can you explain the overall interest and strategy behind
issuing a 20-year bond in this economic environment?
Answer. Treasury aims to finance the government at the lowest cost
to the taxpayer over time. Treasury is always evaluating its existing
financing approach and considering how best to prepare for future
financing needs. As part of this process, Treasury regularly engages
with a broad range of market participants, including the primary
dealers, the Treasury Borrowing Advisory Committee, and investors.
Treasury concluded that there would be strong and consistent demand for
a 20-year bond from many segments of the market, including from
pensions and other long-term investors. The 20-year bond will increase
Treasury's financing capacity over the long term, and help Treasury
achieve is low-cost financing goal.
Question. With LIBOR scheduled to be phased out by the end of 2021,
how is your office working on the transition from LIBOR to SOFR?
Answer. Treasury is taking several steps to help ensure a smooth
transition from LIBOR to SOFR. As an ex-officio member of the
Alternative Reference Rates Committee (ARRC), Treasury participated in
the development of the Paced Transition Plan, and continues to engage
with the ARRC in the support and implementation of this plan.
Treasury's Office of Financial Research (OFR) adopted a final rule in
February 2019 that establishes a data collection on centrally cleared
repo transactions; those data will be used to support the Federal
Reserve's calculation of SOFR. In October 2019, Treasury and the
Internal Revenue Service (IRS) issued proposed regulations allowing
taxpayers to avoid adverse tax consequences from changing the terms of
debt, derivatives, and other financial contracts to replace reference
rates based on LIBOR and similar rates with certain alternative
reference rates, including SOFR. Finally, in the most recent Quarterly
Refunding Statement, Treasury announced its intent to issue a request
for information (RFI) in the first half of 2020 to solicit input from
the public on the demand for a SOFR-indexed
floating-rate note (FRN).
______
Questions Submitted by Hon. Sherrod Brown
Question. Fannie Mae and Freddie Mac have a statutory duty to serve
underserved housing markets. One of the three underserved markets
defined in the duty to serve statute is preservation of affordable
housing. One of the most important tools for affordable housing
development and preservation is the Low-Income Housing Tax Credit
(LIHTC).
Do you support and will you continue to support the GSEs'
multifamily businesses facilitating loans for and providing equity
investments in LIHTC properties in their regular business and as part
of their duty to serve obligations?
Answer. I support the GSEs' longstanding role in promoting access
to affordable mortgage credit, including access by low- and moderate-
income, rural, and other historically underserved borrowers. As stated
in the Treasury Housing Reform Plan, ``[a]ccess to affordable housing
is far too difficult for many Americans, with rising housing costs
forcing many families to dedicate larger shares of their income to
housing.''\1\ Sustainable home ownership for American families should
be a benchmark for success for housing finance reform.
---------------------------------------------------------------------------
\1\ See U.S. Department of the Treasury Housing Reform Plan
(September 2019), available at https://home.treasury.gov/system/files/
136/Treasury-Housing-Finance-Reform-Plan.pdf.
Each GSE also has a statutory duty to serve underserved markets
requirement to provide leadership in developing products to facilitate
a secondary market for mortgages in three specific markets: rural
housing, manufactured housing, and preservation of affordable housing.
Under the statute, the Federal Housing Finance Agency (FHFA) implements
the Duty to Serve requirement, including reviewing and approving the
types of products and services the GSEs may offer through their
Underserved Markets Plans. I support affordable housing activities that
effectively target support for low- and moderate-income and
historically underserved borrowers and believe Congress and the FHFA
should promote efficient, transparent, and accountable mechanisms for
---------------------------------------------------------------------------
delivering this support.
Question. Treasury launched a review of the Community Reinvestment
Act (CRA) back in 2017. This law is critical to ensure that banks are
lending and making investments in underserved communities. I am
concerned about the OCC's recent CRA proposal, which incentivizes banks
to make the easiest possible investments, rather than investing in more
complex--but more beneficial--community development efforts, like those
involving Low-Income Housing Tax Credits and New Markets Tax Credits.
Have you been or will you be involved in the Treasury Department's
work on CRA? If not, please indicate which division within Treasury is
responsible for this work.
Answer. In my previous role as Treasury's Deputy Assistant
Secretary for Small Business, Community Development, and Affordable
Housing Policy, I oversaw the development of the memorandum Treasury
published in April 2018 with recommendations to the Federal banking
regulators on ideas for modernizing the CRA. The implementation of
those recommendations, or other CRA reforms, is the responsibility of
the Office of the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Board of Governors of the Federal
Reserve System. Treasury's recently renamed Office of Community and
Economic Development continues to monitor the banking regulators'
rulemaking process. However, I no longer lead that office.
Question. Will you and the administration commit to focus CRA on
lending and investments that truly make a difference for low- and
moderate-income people and neighborhoods?
Answer. As stated in Treasury's April 2018 memorandum and
recommendations on the CRA, Treasury believes that the purpose of the
CRA is to encourage banks to meet the credit and deposit needs of the
communities they serve, including low- and moderate-income communities,
and that CRA activities should align with those needs. I support
efforts to fulfill that statutory goal. The independent Federal banking
regulators are responsible for implementing and enforcing the CRA in a
manner consistent with its requirements.
Question. When asked about the Treasury Department's position on
maintaining the existing affordable housing goals, statutory duty to
serve, and Housing Trust Fund and Capital Magnet Fund during your
nomination hearing, you said that ``these goals are all important, that
they need to be revised, reformed to allow for greater accountability,
but we recommend no cuts to any of these positions, any of these
goals.'' I am concerned that ``reforming'' any of these provisions may
not be consistent with ``maintaining'' these provisions.
As you know, these three programs are measured in different ways.
The affordable housing goals are percentages of acquisitions devoted to
low-income families, families in low-income areas, and very low-income
families, while the Housing Trust Fund and Capital Magnet Fund
contributions are a set number of basis points of unpaid principal
balance on originations and duty to serve is not quantified in statute.
Please clarify what you mean when you say that Treasury recommends ``no
cuts to any of these positions, any of these goals.''
Answer. Treasury does not propose, and indeed opposes, reducing or
eliminating the GSEs' longstanding support for affordable housing.
Comprehensive housing finance reform legislation could preserve and
improve support for low- and moderate-income and other historically
underserved borrowers and renters.
With respect to the statutory affordability mandates enumerated in
the Treasury Housing Reform Plan, Treasury's recommended reforms are
focused primarily on the statutory affordable housing goals for the
GSEs' acquisitions of mortgage loans to low- and moderate-income
borrowers and mortgage loans to borrowers in low-
income areas. In particular, Treasury recommends that ``Congress should
replace the GSEs' statutory affordable housing goals with a more
efficient, transparent, and accountable mechanism for delivering
tailored support to first-time home buyers and low- and moderate-
income, rural, and other historically underserved borrowers, with a
portion of the associated funding potentially transferred to HUD to
expand its affordable housing activities.''
Except to suggest that reforms could ``more effectively target
support for affordable housing,'' the Treasury Housing Reform Plan did
not include specific recommendations to alter the duty to serve
specified underserved markets or the periodic contributions to the
Housing Trust Fund and Capital Magnet Fund.
Question. Does Treasury recommend statutory revisions to any of
these three programs?
Answer. See previous answer to Senator Brown's question.
Question. Please clarify how Treasury recommends that all three of
these statutory provisions be ``reformed.''
Answer. See previous answer to Senator Brown's question.
Question. During your nomination hearing, we discussed the growing
role of private equity in the housing market, including through private
equity acquisitions of apartment buildings and manufactured housing
communities. You stated that you would need to learn more about the
specific challenges that private equity ownership presents for
residents. Unfortunately we have seen these challenges in manufactured
housing communities in my home State of Ohio, as well as Finance
Committee Chairman Grassley's home State of Iowa. In some cases the
GSEs facilitate these transactions, while in others they use purely
private financing. As documented in the articles below, in some cases
these firms have raised rent by 58 percent to 69 percent, resulting in
massive rent burdens for tenants, many of whom are very low-income,
elderly, or on fixed incomes.
I have also been informed of changes in policies by these new
owners that, in addition to raising rent, now require residents to pay
utilities and other fees separately, resulting in still further cost
increases. In the case of manufactured housing, residents often own the
home but rent the pad underneath and may be financially unable to
relocate from the community to escape rising rents. They face the
impossible choice between paying more than they have or losing their
home.
You stated that Treasury was ``aware'' of the situation described
above. Has the Treasury Department been monitoring the purchase of
residential real estate, including single-family homes, apartments, and
manufactured housing communities by private equity firms? If so, please
describe the tools Treasury is currently using to monitor this
important trend and its impact on housing affordability. If not, please
explain why Treasury does not believe that this is a priority.
Answer. Treasury engages regularly with market participants and
stakeholders across the housing finance marketplace to monitor trends
and to inform administration policy. Insufficient affordable housing
across the country is a critical challenge. As stated in the Treasury
Housing Reform Plan, ``Access to affordable housing is far too
difficult for many Americans, with rising housing costs forcing many
families to dedicate larger shares of their income to housing.''
Treasury is engaged in efforts to address the critical shortage of
affordable housing through its participation on the White House Council
on Eliminating Regulatory Barriers to Affordable Housing, established
under Executive Order 13878. Federal, State, and local efforts to
address these barriers and encourage the development, rehabilitation,
and preservation of affordable housing can help remediate the supply
constraints that artificially raise the cost housing development, and,
as a result, raise housing costs for hardworking families.
Question. After reviewing the articles below [at end of document],
do you agree that residents face new affordable housing challenges when
their manufactured housing communities are purchased by private equity
companies?
Answer. I agree that, based on these articles, many residents of
the referenced communities appear to have experienced new affordable
housing challenges.
Question. Based on the articles below [at end of document], do you
believe that the growth in private equity ownership of residential
housing could exacerbate housing affordability challenges in
manufacturing housing communities and throughout the country?
Answer. Based on the referenced articles, I believe that the
residents in the referenced communities appear to have experienced new
affordable housing challenges. However, without further review of the
specific cases, it would be inappropriate to draw general conclusions
about the impact of certain types of market participants on housing
affordability. A dynamic housing market should accommodate diverse
forms of capital, competing to promote consumer choice.
I support efforts underway at Treasury and across the
administration to address regulatory barriers that limit affordable
housing supply and artificially raise the cost of housing development.
As stated in the Treasury Housing Reform Plan, ``Access to affordable
housing is far too difficult for many Americans, with rising housing
costs forcing many families to dedicate larger shares of their income
to housing.'' Treasury is engaged in efforts to address the critical
shortage of affordable housing through its participation on the White
House Council on Eliminating Regulatory Barriers to Affordable Housing,
established under Executive Order 13878. Federal, State, and local
efforts to address these barriers and encourage the development,
rehabilitation, and preservation of affordable housing can help
remediate these supply constraints and help relieve affordability
challenges, including for manufactured housing.
Question. Do you believe that the Treasury Department and other
Federal regulators have a role to play in maintaining the affordability
and accessibility of housing, including through oversight of private
equity ownership? If so, please describe what steps Treasury or other
regulators can take. If not, please explain why not.
Answer. The Federal Government has a longstanding role promoting
affordable housing through a range of programs and subsidies spanning
multiple Federal agencies. One critical way Treasury is supporting
efforts to maintain and expand affordable housing is through our
participation on the White House Council on Eliminating Barriers to
Affordable Housing, as established by Executive Order 13878. Access to
affordable housing is far too difficult for many Americans, with rising
housing costs forcing many families to dedicate larger shares of their
income to housing. Treasury continues to engage through the White House
Council to identify and address Federal, State, and local barriers that
artificially raise the cost of affordable housing.
______
Hon. Sherrod Brown Supplemental articles
(for question 4)
From Associated Press,\2\ April 20, 2019
---------------------------------------------------------------------------
\2\ https://www.usnews.com/topics/author/associated-press.
---------------------------------------------------------------------------
Private Equity Firms Rapidly Investing in Mobile Home Parks
A growing number of large private equity firms are investing into
mobile home park ownership across the country.
By Zachary Oren Smith, Iowa City Press-Citizen
IOWA CITY, Iowa (AP)--Mobile home owners who for years have enjoyed
some immunity from rising housing costs are increasingly finding
themselves subjected to massive rent increases, not just here in
Iowa,\3\ but across the country.
---------------------------------------------------------------------------
\3\ https://www.usnews.com/news/best-states/iowa.
Havenpark Capital, a Utah-based \4\ real estate investment firm, raised
eyebrows--along with rents--after it purchased parks in the Iowa City
and Des Moines metro areas and immediately announced plans for rent
spikes. In North Liberty, rents at Golfview Mobile Home Park will rise
58 percent and in Waukee, rents at Midwest Country Estates will rise 69
percent. Havenpark Capital recently purchased two more mobile
communities: Iowa City's Sunrise Village and West Branch's West Branch
Village. And as it turns out these are just the tip of the iceberg, the
Iowa City Press-Citizen reported.
---------------------------------------------------------------------------
\4\ https://www.usnews.com/news/best-states/utah.
There is a growing trend among some of the largest private equity firms
and institutional investors to acquire assets in the manufactured
housing sector, according to a 2019 report put together by three
housing advocates groups: Private Equity Stakeholder Project,
Manufactured Housing Action and Americans for Financial Reform
---------------------------------------------------------------------------
Education Fund.
The top 50 manufactured housing community owners together own 680,000
home sites--a 26-percent increase between 2016 and 2018, according to
data from the National Manufactured Home Owners's Manufactured Housing
Institute. The authors of the report note that the need to produce
greater profits is leading to cost increases for park residents
nationwide.
``Manufactured home communities are interesting communities,'' said
Kevin Borden, co-director of Manufactured Housing Action, a Washington
D.C.-based nonprofit that organizes residents of mobile home parks to
pursue housing affordability and resident protections. ``They are
relatively affordable for low income workers immigrant workers and
seniors on fixed incomes. They provide folks with a sense of a home
community.''
In 2018, there were approximately 8.5 million manufactured homes in the
United States, accounting for nearly 10 percent of the Nation's housing
stock, according to the Manufactured Housing Institute. This has been a
source of affordable housing, in particular for rural and low-income
residents.
``These are affordable homes for low-income folks,'' said Liz Voigt of
Manufactured Housing Action and a co-author of the 2019 report.
``That's what the market has been for a long time. It hasn't really
occurred to people that they could gouge them for 80 percent of their
Social Security check. That's the analysis that these companies have
seen: they could make a very big increase in profits based on rent
increases in nearly any conditions.''
In a statement to the Press-Citizen in reference to their rent increase
in North Liberty, Havenpark Capital said the previous owner's rent
prices had not kept pace with the market. They wrote that if it were
not for Havenpark stepping in, the property might have been taken over
by commercial retail developers. But even if the land remained a park,
seniors on fixed incomes, low-wage earners on limited incomes may not
have much of an option in the end.
Part of the issue is residents commonly own their mobile home but not
the land underneath it. If lot rents become unaffordable, residents may
have no other option but to try and sell their home to the park or
abandon it all together. Moving homes to another park can cost
thousands of dollars and moving often means sustaining damage to the
home, further depreciating its value.
The 2019 report quotes material from Mobile Home University, a project
of RV Horizons aimed at educating aspiring mobile home park investors
on the revenue model: ``The fact that tenants can't afford the $5,000
it takes to move a mobile home makes it easy to raise rent without
losing any occupancy.''
Compared to larger private equity firms like YES! Communities, which
own 54,000 home sites, Havenpark Capital is relatively small. But Voigt
and Borden said the private real estate firm benefits from the same
investment strategy.
To create protections for these communities, there are three
``buckets'' of policy solutions Voigt pointed to that she said
localities and States should pursue to add protections for manufactured
home owners in their communities.
``There is a regulatory environment in which (these firms) operate that
has created an enormously profitable business on the backs of poor
people,'' Voigt said.
The first strategy would be to find some consistent means of regulating
rent. Voigt emphasized that these regulations look different in
different places.
One example is in Humboldt County, California \5\ where voters passed
an ordinance to regulate rent increases for spaces in mobile home parks
with ten or more spaces in the unincorporated area of Humboldt County.
Rents can only legally be increased to keep up with the consumer price
index; to afford capital improvements with approval of a majority of
tenants; or in the case of a new resident, at a maximum of 5 percent.
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\5\ https://www.usnews.com/news/best-states/california.
In Delaware,\6\ property owners can raise rent above the consumer price
index provided they have not received any violations that threaten the
health or safety or residents that persists for more than 15 days and
the increase is directly related to operating, maintaining or improving
the manufactured home community.
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\6\ https://www.usnews.com/news/best-states/delaware.
``There are different ways to get there,'' Voigt said. ``But the idea
is (property owners) shouldn't just have total control over setting
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these arbitrary rent increases.''
The second strategy is for residents to have a say in how the park they
live in is improved, and an avenue for making complaints if it is not
being taken care of properly.
``(Large firms) don't seem to have a long term investment in the
community's ongoing infrastructure and communities sustained health,''
Voigt said. ``There are laws in most places about basic code standards,
but making those clear responsibilities for the community owner would
incentivize investment.''
In addition, Voigt said it is important for residents to have a clear
path to report problems with health and safety risks, management, lease
provisions, invoices and other problems. When the owner is out of
State, this might mean site managers and mandated grievance procedures.
The third strategy is more complicated. Even if there are limits on the
amount rent can be increased and residents have the ability to reliably
file grievances, an investment firm is in business to generate revenue.
While this doesn't necessarily put them at odds with residents, a 58-
percent tax increase does.
``There needs to be a clear path toward alternative forms of
ownership,'' Voigt said.
They ask States to enact laws that give mobile park tenants and
associations a chance to buy their park if property owners are
approached with an offer. Voigt said that if our goal is to keep these
parks affordable in the long term, drastic changes in ownership might
be one of the few ways to keep the needs of tenants at the heart of
decision making.
``As this trend picks up and bigger and bigger private equity groups
with huge access to capital buy more and more of these communities, it
is going to put increasing pressures on mom and pop parks to sell
out,'' Voigt said.
https://www.usnews.com/news/best-states/iowa/articles/2019-04-20/
private-equity-firms-rapidly-investing-in-mobile-home-parks.
______
From The Des Moines Register, April 1, 2019
After Mobile Home Park Owner Raises Rents by 69 Percent,
Neighbors Worry Elderly, Fixed-Income Residents May Lose Their Homes
By Ian Richardson
Janet Hook has done the math, and she's concerned.
On Friday, the single mother of two found a letter taped to the door of
her white and green mobile home announcing that Midwest Country Estates
in Waukee, where she's rented a lot for 12 years, has a new owner.
As one of its first acts, the Utah-based company said it was increasing
her rent $205 per month to $500, starting June 1st--a 69-percent
increase.
``It would leave me with $88 for food and gas after all my bills are
paid,'' said Hook, who works at Waukee High School during the school
year and Dairy Queen in the summer. ``I'm going to have to get a second
job other than the ones I already have.''
She's not alone. Every resident of the 300-lot manufactured home park
received the same letter. Among them are more single parents, elderly
residents and people on fixed incomes.
``It's going to take me right down to my last dollar,'' said 91-year-
old Arletta Swain. ``I'm afraid.''
Swain has lived in the mobile home park for nearly 50 years. Her only
income is her Federal pension.
The new owner, Havenpark Capital, said the rent increase is necessary
to bring it more in line with what it says are similar quality
communities in the metro. ``Without raising your rent, our community
would be at risk of going away because it is in a high-growth area--one
of the fastest growing in the country,'' the letter to residents says.
Iowa law does not set a cap on how much landlords are allowed to
increase rental rates as long as they provide adequate notice and
respect existing lease agreements.
Residents said relocating to a less expensive park likely won't be an
option for many since the mobile homes they own are too old to move.
``We're sitting ducks is what we are,'' Hook said. ``There's a lot of
us out here who don't know what we're going to do.''
New Owners Blame Rising Land Values
Havenpark Capital taped the rent increase announcement to residents'
doors two days after purchasing the roughly 64-acre site for $17.5
million.
``Rent will be going up to protect our community,'' the letter says.
``If the rent did not go up, the land where Midwest Country Estates
sits today would have been more valuable if it were changed into
apartments, or a large retail store, causing all of our residents to be
evicted.''
The company set a standard monthly rent of $500 for basic lots.
Residents at Midwest Country Estates own their own mobile homes, but
rent the land from the company.
Those on corner lots or double-wide homes face an additional $25 per
month ``premium site'' fee.
Each resident must sign a new lease within 30 days, the letter says.
In a statement, the company said rental rates at Midwest Country
Estates have ``fallen significantly behind comparable four-star
manufactured home communities in the Des Moines area,'' which makes it
a ``ripe target'' for redevelopment. It said a survey of comparable
parks in the Des Moines metro showed an average lot rate of $522 per
month.
``Our purchase and investment in the park will ensure this area remains
available for housing rather than be taken over by commercial retail
developers,'' the statement says.
An NAI Iowa Realty Commercial survey of 13 mobile home parks in the Des
Moines metro from October 2018 showed rents ranging from $244 to $596
per month, with an average monthly rent of $436.
Joanne Stevens, an NAI Iowa Realty agent who helped with the Midwest
Country Estates sale, said owners that want to stay in the mobile home
business long-term need market rate rents to keep parks operational and
well-maintained.
``I think that's very much needed in that community,'' she said.
Havenpark Capital owns properties in nine States, including North
American Mobile Home Park in Indianola.
The company said it plans to invest more than $1 million into Midwest
Country Estates over the next 12 months to install 20 new homes, build
a safe play area for children, repave sections of road, install new
mailboxes, build a new entryway monument sign and complete landscaping
projects.
The company said it does not want to lose residents but will assist any
who are moving out with the sale of their homes.
Built in 1969 along Hickman Road, Midwest Country Estates is now
surrounded on three sides by single-family homes.
A row of businesses including a bank, dental office, and fast food
restaurants now sits between the mobile home park and Hickman Road.
Over the past 4 years, the property's assessed value has grown from
approximately $1.3 million to $3.8 million, according to Dallas County
assessor's data. The mobile home park's taxes have increased nearly
$10,000--from $81,042 in the 2015-2016 tax year to $90,481.59 in 2018-
19.
The property is specifically zoned for a mobile home park, Waukee
Development Services Director Brad Deets said. However, apartments or
retail space could fit within the city's comprehensive plan for the
area, which includes a mixture of commercial and residential land along
the Hickman Road corridor, he said.
``Mobile Homes Depreciate in Value Like a Car''
Alex Kornya, assistant litigation director with Iowa Legal Aid, said
tenants of mobile home parks often find themselves in difficult
positions when rents rise because moving their homes often isn't
feasible.
``They are built with the intention they could be moved, but it is
almost never the case that they can be,'' Kornya said. ``Mobile homes
depreciate in value like a car, and it doesn't take long for them to
acquire the problems where moving them is not possible.''
Residents of mobile home parks are more likely to be older and have
lower incomes or net worth, according to a 2014 study by the Consumer
Finance Protection Bureau.\7\
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\7\ https://files.consumerfinance.gov/f/
201409_cfpb_report_manufactured-housing.pdf.
Kornya said when people make an investment in their own mobile home,
many people end up forfeiting the investment because they can't move
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the home with them.
However, rent increases are typically legal if made with at least a 60-
day advanced notice for tenants who own their own homes and at least 30
days for tenants who rent homes.
A rent increase cannot be made until a tenant's original lease term is
concluded. Midwest Country Estates residents who spoke to the Register
said they were on month-to-month leases.
Kornya said Iowa Legal Aid, which offers free civil legal assistance to
the elderly, low-income, veterans and other vulnerable groups, sees a
``high proportion'' of people coming to its office with mobile home-
related issues. It offers assistance to tenants in landlord-tenant
disputes.
``Some Compassion Would Be Lovely''
Since receiving the letter, Midwest Country Estates residents have been
working together to learn more about the purchase and how the rent
increase will affect the park's low-income renters.
Matt Chapman started a Facebook group where residents are posting their
stories. He has gathered accounts from several residents who say it
will be difficult to budget for the increase with their fixed incomes.
Chapman said he knows the new company is abiding by the law and the
rent increase will likely happen, but he wants to be sure those facing
tough decisions don't fly under the radar.
``We want to find out who the most vulnerable people in here are and we
want to make sure they don't lose their home or they're not going to be
cutting their medications in half or going without them,'' he said.
Chapman said he wants to organize a forum where residents can meet with
each other and community leaders, as well as learn about what available
resources can help them out financially.
Hook, the single mother, said she would like to see a third party
mediate discussions between residents and the company. She's hopeful
that could result in the company adopting an incremental increase.
``We've looked into the laws and all they have to do is give us 60-day
notice,'' she said. ``But some compassion would be lovely.''
https://www.desmoinesregister.com/story/news/local/waukee/2019/03/27/
waukee-midwest-country-estates-mobile-home-park-havenpark-capital-utah-
rent-increase-rates-iowa/3267410002/.
______
Questions Submitted by Hon. Catherine Cortez Masto
Question. If you are confirmed to serve as Assistant Secretary for
Financial Markets, will you seek any effort to restrict Fannie Mae and
Freddie Mac financing for about apartment buildings, condominiums, and
cooperatives and other multi-family homes?
Answer. The GSEs continue to provide liquidity to the multifamily
lending market, in particular to support the availability of rental
units that are affordable to low- and moderate-income and other
historically underserved renters. Treasury's Housing Reform Plan
recommends that Congress authorize an explicit, paid-for guarantee of
qualifying mortgage-backed securities collateralized by eligible
multifamily mortgage loans. The funding advantage conferred by an
explicit guarantee could risk crowding out existing private sector
funding of multifamily loans. As such, Treasury recommends that
Congress and the FHFA revisit the framework for ensuring that the
Federal Government's support of the multifamily secondary market is
tailored to an affordability mission. In September 2019, the FHFA
announced changes to the restrictions on GSE multifamily loan
purchases.\8\ Treasury believes these changes are consistent with the
recommendations in the Treasury Housing Reform Plan.
---------------------------------------------------------------------------
\8\ See ``FHFA Revises Multifamily Loan Purchase Caps for Fannie
Mae and Freddie Mac'' (September 13, 2019), available at https://
www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Revises-Multifamily-Loan-
Purchase-Caps-for-Fannie-Mae-and-Freddie-Mac.aspx.
Question. The Supreme Court's June 2017 unanimous decision in
Kokesh vs. SEC limited the Security and Exchange Commission's ability
to make fraudsters repay ill-gotten gains (disgorgement) to a 5-year
statute of limitations. Do you think the Supreme Court's Kokesh
decision, limiting the SEC's ability to obtain disgorgement within a
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short, 5-year period will harm investors and make markets riskier?
Answer. The U.S. capital markets are the largest, deepest, and most
vibrant in the world and are critically important in supporting the
U.S. economy. Protecting retail investors, and punishing those who
violate our securities laws, are important efforts to maintain
confidence in our markets. The SEC Chairman has publicly expressed his
concerns about the impacts of the Supreme Court's decision in Kokesh
vs. SEC and has expressed his interest in working with Congress to
address this issue.\9\ I am supportive of his efforts.
---------------------------------------------------------------------------
\9\ See SEC Chairman Jay Clayton, keynote remarks at Mid-Atlantic
Regional Conference (June 4, 2019), available at https://www.sec.gov/
news/speech/clayton-keynote-mid-atlantic-regional-conference-2019.
Question. What is your plan to ensure a smooth transition from
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LIBOR to SOFR?
Answer. Treasury is taking several steps to help ensure a smooth
transition from LIBOR to SOFR. As an ex-officio member of the
Alternative Reference Rates Committee (ARRC), Treasury participated in
the development of the Paced Transition Plan, and continues to engage
with the ARRC in the support and implementation of this plan.
Treasury's Office of Financial Research (OFR) adopted a final rule in
February 2019 that establishes a data collection on centrally cleared
repo transactions; those data will be used to support the Federal
Reserve's calculation of SOFR. In October 2019, Treasury and the
Internal Revenue Service (IRS) issued proposed regulations allowing
taxpayers to avoid adverse tax consequences from changing the terms of
debt, derivatives, and other financial contracts to replace reference
rates based on LIBOR and similar rates with certain alternative
reference rates, including SOFR. Finally, in the most recent Quarterly
Refunding Statement, Treasury announced its intent to issue a request
for information (RFI) in the first half of 2020 to solicit input from
the public on the demand for a SOFR-indexed
floating-rate note (FRN).
Question. After the financial crisis, the largest banks were
required to maintain sufficient capital and liquidity to ensure their
resiliency against economic and financial shocks. In recent years,
banking regulators have loosened these restrictions. Do you think the
largest banks are appropriately capitalized? Are you concerned that
stress tests for the largest banks might not capture the actual risks?
Answer. The safety and soundness of banks of all sizes is of
paramount importance to the strength of the U.S. economy and the
stability of our financial system. The largest banks now have
significantly more capital and liquidity than they did before the
financial crisis, which increases their ability to withstand future
stresses. At the same time, it is important to tailor these
requirements based on the risks posed by the institutions. Similarly,
stress-testing requirements should appropriately reflect the size and
complexity of the banks.
Question. Do you think that the credit rating agencies like
Moody's, Fitch, and S&P are accurately evaluating risk?
Answer. The Dodd-Frank Wall Street Reform and Consumer Protection
Act eliminated regulatory reliance on credit rating agencies' ratings
by requiring that references to credit ratings be removed from Federal
laws and regulations. Dodd-Frank also enhanced the SEC's supervisory
authority over registered credit rating agencies, including new
requirements pertaining to internal controls, reporting, disclosure,
and accountability. These reforms have improved the process by which
ratings are assigned. At the same time, credit rating agencies continue
to play an important gatekeeper role in certain markets. The SEC should
continue to closely monitor the role that credit ratings play in
financial markets and the processes the ratings agencies use in
evaluating risks.
Question. Do you support changes made to the Volcker rule
implementation? Do you have any concerns that permitting financial
institutions to invest on their own behalf provides them an unfair
advantage compared to other investors?
Answer. Regulators have tailored the rule's compliance requirements
based on the size of a firm's trading assets and liabilities, with the
most stringent requirements applied to banking entities with the most
trading activity. I support regulators' efforts to implement changes to
the Volcker Rule consistent with Treasury's previous recommendations
\10\ and the requirements under the Economic Growth, Regulatory Relief,
and Consumer Protection Act.
---------------------------------------------------------------------------
\10\ See ``Treasury, a Financial System That Creates Economic
Opportunities: Banks and Credit Unions'' (June 2017), available at
https://www.treasury.gov/press-center/press-releases/Documents/
A%20Financial%20System.pdf.
Question. What will the Treasury Department do to increase the home
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ownership rate for African Americans and Latinos?
Answer. Treasury recently published its Housing Reform Plan, as
directed by the President's March 27, 2019 memorandum. Consistent with
the Presidential Memorandum, sustainable homeownership for American
families should be a benchmark for success for housing finance reform.
In its Housing Reform Plan, Treasury recommends replacing the GSEs
affordable housing goals with a more efficient, transparent, and
accountable mechanism for delivering tailored support to first-time
homebuyers and low- and moderate-income, rural, and other historically
underserved borrowers. Critically, the legislative reforms Treasury
recommends in Treasury's Housing Reform Plan should preserve and
improve support for low- and
moderate-income and other historically underserved groups. Legislative
reforms should also preserve and improve support for low- and moderate-
income and other historically underserved renters.
A robust affordable housing policy starts with a strong economy.
Since the President's 2016 election, the economy has added 7 million
jobs, wages have grown more than 3 percent for 18 consecutive months,
and the unemployment rate remains at near historic lows, including for
African American and Hispanic households. Treasury will continue to
support the President's economic agenda to help working families.
______
Questions Submitted by Hon. Maggie Hassan
Question. As you know, Community Development Financial Institutions
(CDFIs) are Treasury-certified financial institutions which specialize
in addressing the needs of underserved, economically disadvantaged
communities. In my home State of New Hampshire, the New Hampshire
Community Loan Fund is a CDFI which has been expanding access to
affordable housing and business capital for over 35 years. However,
despite the success of CDFIs across the country, the FY 2018, 2019, and
2020 Treasury Department budget proposals would have eliminated funding
for Community Development Financial Institution programs. What role, if
any, did you play in developing these budget proposals while serving at
the Treasury Department? Do you support eliminating funding for
Community Development Financial Institution programs?
Answer. As Deputy Assistant Secretary for Small Business, Community
Development, and Affordable Housing Policy and as Acting Assistant
Secretary for Financial Institutions, I administered the programs at
the funding levels appropriated by the Congress.
Question. Currently, about $26 billion in matured U.S. savings
bonds, such as paper bonds issued during World War II, have not been
redeemed by the holders of these bonds. New Hampshire bond holders own
about $100 million of these unclaimed bonds. I am a cosponsor of
Senator Kennedy's bill, the Unclaimed Savings Bonds Act, which directs
Treasury to work with States, like New Hampshire, to return unclaimed
U.S. savings bonds to their rightful bondholders. Can you describe the
ongoing efforts at Treasury aimed at returning matured but unclaimed
U.S. savings bonds to their owners? If confirmed, will you commit to
working with Congress to address this issue?
Answer. The issue of matured unredeemed savings bonds does not fall
under the purview of the Assistant Secretary for Financial Markets, and
so neither I nor my team is directly involved in this matter. However,
Treasury has assembled a dedicated team that is working with Senator
Kennedy on the issue of matured unredeemed debt. Treasury has launched
a new and secure version of Treasury Hunt, an online tool that allows
bond owners to determine whether they own matured savings bonds. In
addition, Congress appropriated $25 million this year for digitizing
bond records. To make the best use of these funds, Treasury is
conducting market research and hosted an industry day designed to
identify the most promising and cost-effective technologies to digitize
and improve the accessibility of savings bond records. Using the funds
Congress made available, we are committed to improving access to our
savings bonds records and helping bond owners redeem their matured
savings bonds. Treasury looks forward to working collaboratively with
the States and Congress on this effort.
______
Questions Submitted by Hon. Sheldon Whitehouse
Question. Numerous respected economists and financial institutions
are warning of severe economic risks from climate change and from
policy inaction. These risks include the crashing of fossil-fuel-
related stocks and the flooding of coastal communities due to sea-level
rise. Does the Treasury Department take these warnings seriously?
Answer. As Secretary Mnuchin has stated, Treasury believes that
there are a range of important environmental issues, including climate
change, that can have an impact on the economy.
Question. What is Treasury doing to address these warnings and to
prepare the economy for any fallout?
Answer. Treasury is committed to working with others in the
executive branch to review and study the potential economic impacts
that environmental issues present.
Question. What influence does the fossil fuel industry exert with
respect to the Treasury Department's response to climate change?
Answer. I am not aware of any efforts of the fossil fuel industry
to exert influence with respect to Treasury's efforts related to
climate change.
Question. What is the Treasury Department doing to protect the
financial system against climate-related risks?
Answer. Treasury is committed to working with others in the
executive branch to review and study the potential economic impacts
that environmental issues present.
Question. If confirmed, do you plan to address and to elevate the
issue of climate change within Treasury? If so, how?
Answer. As Secretary Mnuchin has stated, there are a range of
important environmental issues, including climate change, that can have
an impact on the economy. Treasury is committed to working with others
in the executive branch to review and study the potential economic
impacts that environmental issues present. I support this commitment
and, if confirmed, I hope that we can all work together on these
important issues.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
This morning the Finance Committee meets to consider three
nominations: Jason Fichtner is nominated to serve on the Social
Security Advisory Board, Sarah Arbes is nominated to serve as HHS
Assistant Secretary for Legislation, and Kipp Kranbuhl is nominated to
serve as Assistant Treasury Secretary for Financial Markets.
I'll have just a few brief remarks on these nominees. If confirmed,
Mr. Fichtner will dive into important work the Social Security Advisory
Board is doing with respect to customer service and IT. The Board is
also working hard to address challenges that come with serving some of
the most vulnerable Social Security beneficiaries, individuals who are
unable to manage their own finances.
If confirmed, Mr. Kranbuhl will take on a job at the Treasury
Department that deals with a lot of tough subjects including debt
management, housing finance, and the stability of our financial
markets.
Both are important roles that can affect the well-being of millions
of Americans. They call for an even-handed approach from individuals
willing to work with people from all sides. I hope these nominees serve
in that manner.
Finally, Sarah Arbes is nominated to serve in a role at HHS that
involves working directly with the Congress as the Department's chief
point of contact between us. One of our top priorities on this
committee, for example, is bringing down the cost of prescription
drugs. This committee also takes its oversight role very seriously.
That means we've sent oversight letters to HHS on a variety of topics,
including the appalling treatment of migrant children and families at
our southern border, and the waste of taxpayer dollars on public
relations contracts for the head of CMS.
At times, it has been awfully hard to get HHS to respond to our
oversight inquiries. I understand that there's been some recent
progress on the committee's bipartisan investigation of children's
shelters, and I'm thankful for that. But to my mind, it's consistently
been much harder than it needs to be to get the information that this
committee and its members need to carry out our oversight
responsibilities. This committee has worked closely and productively
with Ms. Arbes in the past, so we're going to count on her to help turn
that around. But make no mistake, there needs to be improvement in how
HHS responds to this committee. My expectation is that HHS will provide
the remaining information over the next several days. If that is the
case, I will support moving this nomination forward.
[all]