[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                     ASSESSING THE FEDERAL GOVERNMENT'S 
                 COVID-19 RELIEF AND RESPONSE EFFORTS AND 
                 ITS IMPACT (PARTS 1 AND 2)

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

                                (117-24)

                            REMOTE HEARINGS

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                    THURSDAY, JULY 29, 2021 (Part 1)
                 THURSDAY, SEPTEMBER 30, 2021 (Part 2)

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
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     Available online at: https://www.govinfo.gov/committee/house-
 transportation? browsecommittee/chamber/house/committee/transportation
 
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-369 PDF                 WASHINGTON : 2022                     
          
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    PETER A. DeFAZIO, Oregon, Chair
ELEANOR HOLMES NORTON,               SAM GRAVES, Missouri
  District of Columbia               DON YOUNG, Alaska
EDDIE BERNICE JOHNSON, Texas         ERIC A. ``RICK'' CRAWFORD, 
RICK LARSEN, Washington                  Arkansas
GRACE F. NAPOLITANO, California      BOB GIBBS, Ohio
STEVE COHEN, Tennessee               DANIEL WEBSTER, Florida
ALBIO SIRES, New Jersey              THOMAS MASSIE, Kentucky
JOHN GARAMENDI, California           SCOTT PERRY, Pennsylvania
HENRY C. ``HANK'' JOHNSON, Jr.,      RODNEY DAVIS, Illinois
    Georgia                          JOHN KATKO, New York
ANDRE CARSON, Indiana                BRIAN BABIN, Texas
DINA TITUS, Nevada                   GARRET GRAVES, Louisiana
SEAN PATRICK MALONEY, New York       DAVID ROUZER, North Carolina
JARED HUFFMAN, California            MIKE BOST, Illinois
JULIA BROWNLEY, California           RANDY K. WEBER, Sr., Texas
FREDERICA S. WILSON, Florida         DOUG LaMALFA, California
DONALD M. PAYNE, Jr., New Jersey     BRUCE WESTERMAN, Arkansas
ALAN S. LOWENTHAL, California        BRIAN J. MAST, Florida
MARK DeSAULNIER, California          MIKE GALLAGHER, Wisconsin
STEPHEN F. LYNCH, Massachusetts      BRIAN K. FITZPATRICK, Pennsylvania
SALUD O. CARBAJAL, California        JENNIFFER GONZALEZ-COLON,
ANTHONY G. BROWN, Maryland             Puerto Rico
TOM MALINOWSKI, New Jersey           TROY BALDERSON, Ohio
GREG STANTON, Arizona                PETE STAUBER, Minnesota
COLIN Z. ALLRED, Texas               TIM BURCHETT, Tennessee
SHARICE DAVIDS, Kansas, Vice Chair   DUSTY JOHNSON, South Dakota
JESUS G. ``CHUY'' GARCIA, Illinois   JEFFERSON VAN DREW, New Jersey
ANTONIO DELGADO, New York            MICHAEL GUEST, Mississippi
CHRIS PAPPAS, New Hampshire          TROY E. NEHLS, Texas
CONOR LAMB, Pennsylvania             NANCY MACE, South Carolina
SETH MOULTON, Massachusetts          NICOLE MALLIOTAKIS, New York
JAKE AUCHINCLOSS, Massachusetts      BETH VAN DUYNE, Texas
CAROLYN BOURDEAUX, Georgia           CARLOS A. GIMENEZ, Florida
KAIALI`I KAHELE, Hawaii              MICHELLE STEEL, California
MARILYN STRICKLAND, Washington
NIKEMA WILLIAMS, Georgia
MARIE NEWMAN, Illinois
TROY A. CARTER, Louisiana
                                
                                
                                CONTENTS

                                                                   Page

Hearing held on Thursday, July 29, 2021, Part 1..................     1

Summary of Subject Matter........................................     2

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chair, Committee on Transportation and 
  Infrastructure, opening statement..............................    17
    Prepared statement...........................................    19
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, opening statement..............................    20
    Prepared statement...........................................    20

                               WITNESSES

Hon. Michael E. Horowitz, Chair, Pandemic Response Accountability 
  Committee, oral statement......................................    22
    Prepared statement...........................................    23
Heather Krause, Director, Physical Infrastructure, U.S. 
  Government Accountability Office, oral statement...............    30
Chris P. Currie, Director, Homeland Security and Justice, U.S. 
  Government Accountability Office \\
    Joint prepared statement of Ms. Krause and Mr. Currie........    32
Hon. Eric J. Soskin, Inspector General, U.S. Department of 
  Transportation, oral statement.................................    42
    Prepared statement...........................................    44
James Izzard, Jr., Assistant Inspector General for 
  Investigations, U.S. Department of Homeland Security, oral 
  statement......................................................    53
    Prepared statement...........................................    54

                       SUBMISSIONS FOR THE RECORD

Submissions for the Record by Hon. Thomas Massie:
    Article entitled, ``Foreign Workers Living Overseas 
      Mistakenly Received $1,200 U.S. Stimulus Checks,'' by Sacha 
      Pfeiffer, NPR, August 5, 2020..............................    66
    Article entitled, ``IRS Says Its Own Error Sent $1,200 
      Stimulus Checks to Non-Americans Overseas,'' by Sacha 
      Pfeiffer, NPR, November 30, 2020...........................    68

                                APPENDIX

Questions from Hon. Salud O. Carbajal to Heather Krause, 
  Director, Physical Infrastructure, U.S. Government 
  Accountability Office..........................................    93
Question from Hon. Salud O. Carbajal to Chris P. Currie, 
  Director, Homeland Security and Justice, U.S. Government 
  Accountability Office..........................................    94
Questions to Hon. Eric J. Soskin, Inspector General, U.S. 
  Department of Transportation, from:
    Hon. Steve Cohen.............................................    96
    Hon. Stephen F. Lynch........................................    96

                             ----------
 Chris P. Currie, Director, Homeland Security and Justice, 
U.S. Government Accountability Office, did not deliver an oral 
statement.
Hearing held on Thursday, September 30, 2021, Part 2.............    97

                                           1Summary of Subject Matter98

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chair, Committee on Transportation and 
  Infrastructure, opening statement..............................   104
    Prepared statement...........................................   105
Hon. Eric A. ``Rick'' Crawford, a Representative in Congress from 
  the State of Arkansas, opening statement.......................   107
    Prepared statement...........................................   107
Hon. Eddie Bernice Johnson, a Representative in Congress from the 
  State of Texas, prepared statement.............................   203

                               WITNESSES

Paul P. Skoutelas, President and Chief Executive Officer, 
  American Public Transportation Association, oral statement.....   108
    Prepared statement...........................................   110
Juan Manuel Ortiz, Director, Office of Emergency Management and 
  Homeland Security, City of Austin, Texas, on behalf of the 
  International Association of Emergency Managers, oral statement   115
    Prepared statement...........................................   117
Michael J. Boskin, Ph.D., Tully M. Friedman Professor of 
  Economics and Wohlford Family Senior Fellow, Hoover 
  Institution, Stanford University, on behalf of himself, oral 
  statement......................................................   124
    Prepared statement...........................................   126
Wendy Edelberg, Ph.D., Director, The Hamilton Project, The 
  Brookings Institution, on behalf of herself, oral statement....   130
    Prepared statement...........................................   132
Gregory R. Regan, President, Transportation Trades Department, 
  AFL-CIO, oral statement........................................   149
    Prepared statement...........................................   151

                       SUBMISSIONS FOR THE RECORD

Definition of Social Justice, Submitted for the Record by Hon. 
  Nikema Williams................................................   198
Statement of John Samuelsen, International President, Transport 
  Workers Union of America, AFL-CIO, Submitted for the Record by 
  Hon. Peter A. DeFazio..........................................   203

                                APPENDIX

Questions to Paul P. Skoutelas, President and Chief Executive 
  Officer, American Public Transportation Association, from:
    Hon. Frederica S. Wilson.....................................   209
    Hon. Jenniffer Gonzalez-Colon................................   209
Questions to Juan Manuel Ortiz, Director, Office of Emergency 
  Management and Homeland Security, City of Austin, Texas, on 
  behalf of the International Association of Emergency Managers, 
  from:
    Hon. Frederica S. Wilson.....................................   209
    Hon. Jenniffer Gonzalez-Colon................................   213
Questions from Hon. Jenniffer Gonzalez-Colon to Michael J. 
  Boskin, Ph.D., Tully M. Friedman Professor of Economics and 
  Wohlford Family Senior Fellow, Hoover Institution, Stanford 
  University, on behalf of himself...............................   213
Questions to Wendy Edelberg, Ph.D., Director, The Hamilton 
  Project, The Brookings Institution, on behalf of herself, from:
    Hon. Frederica S. Wilson.....................................   214
    Hon. Nikema Williams.........................................   214
    Hon. Jenniffer Gonzalez-Colon................................   215
Questions to Gregory R. Regan, President, Transportation Trades 
  Department, AFL-CIO, from:
    Hon. Frederica S. Wilson.....................................   216
    Hon. Nikema Williams.........................................   216
    Hon. Jenniffer Gonzalez-Colon................................   217

 
ASSESSING THE FEDERAL GOVERNMENT'S COVID-19 RELIEF AND RESPONSE EFFORTS 
                             AND ITS IMPACT

                              ----------                              


                        THURSDAY, JULY 29, 2021

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to call, at 11:02 a.m. in room 
2167 Rayburn House Office Building and via Zoom, Hon. Peter A. 
DeFazio (Chair of the committee) presiding.
    Members present in person: Mr. DeFazio, Mr. Larsen, Mr. 
Malinowski, Ms. Williams of Georgia, Ms. Newman, Mr. Graves of 
Missouri, Mr. Webster, Mr. Rodney Davis, Mr. Weber, Mr. 
LaMalfa, Mr. Westerman, Mr. Stauber, and Mr. Nehls.
    Members present remotely: Ms. Norton, Ms. Johnson of Texas, 
Mrs. Napolitano, Mr. Cohen, Mr. Johnson of Georgia, Ms. Titus, 
Ms. Brownley, Mr. Payne, Mr. Lowenthal, Mr. DeSaulnier, Mr. 
Lynch, Mr. Carbajal, Mr. Brown of Maryland, Mr. Stanton, Ms. 
Davids, Mr. Garcia of Illinois, Mr. Delgado, Mr. Pappas, Mr. 
Lamb, Mr. Moulton, Ms. Bourdeaux, Mr. Kahele, Ms. Strickland, 
Mr. Carter, Mr. Massie, Mr. Mast, Mr. Fitzpatrick, Miss 
Gonzalez-Colon, Mr. Balderson, Mr. Johnson of South Dakota, Dr. 
Van Drew, Mr. Guest, Ms. Van Duyne, Mr. Gimenez, and Mrs. 
Steel.
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                             July 26, 2021
    SUMMARY OF SUBJECT MATTER

    TO:       Members, Committee on Transportation and Infrastructure
    FROM:   Staff, Committee on Transportation and Infrastructure
    RE:       Full Committee Hearing on ``Assessing the Federal 
Government's COVID-19 Relief and Response Efforts and Its Impact''
_______________________________________________________________________

                                PURPOSE
    The Committee on Transportation and Infrastructure (T&I) will meet 
on Thursday, July 29, 2021, at 11:00 a.m. EDT in 2167 Rayburn House 
Office Building and via Zoom to hold a hearing titled ``Assessing the 
Federal Government's COVID-19 Relief and Response Efforts and Its 
Impact.'' The hearing will examine the federal response to the COVID-19 
pandemic, efforts to provide oversight of that response, areas for 
improvement, and the impact of pandemic relief efforts on the 
transportation and infrastructure sectors and their workers.
    The Committee will hear testimony from two panels. The first panel 
will include federal government witnesses from the Government 
Accountability Office (GAO), the Department of Transportation Office of 
Inspector General (DOT OIG), the Department of Homeland Security Office 
of Inspector General (DHS OIG), and the Pandemic Response 
Accountability Committee (PRAC).\1\ The second panel will include 
witnesses from the American Public Transportation Association (APTA), 
the International Association of Emergency Managers (IAEM), the Hoover 
Institution at Stanford University, the Hamilton Project at the 
Brookings Institution, and the Transport Workers Union of America 
(TWU).
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    \1\ The CARES Act established the Pandemic Response Accountability 
Committee (PRAC) as a committee of the Council of the Inspectors 
General on Integrity and Efficiency (CIGIE), which is composed of 
inspectors general from across the government. See https://
www.pandemicoversight.gov/our-mission/about-the-prac; CARES Act, Pub. 
L. No. 116-136 (2020), Sec. 15010.
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                               BACKGROUND
    In response to the COVID-19 pandemic, Congress and the Executive 
Branch have taken a series of actions to protect the health and 
economic security of American individuals and businesses. Congress 
included $5.9 trillion dollars of relief and job protection measures in 
the CARES Act, the Consolidated Appropriations Act of 2021, the 
American Rescue Plan, and other legislation.\2\ Federal agencies, 
including the Federal Emergency Management Agency (FEMA), the operating 
administrations within the Department of Transportation (DOT), and the 
U.S. Department of the Treasury (Treasury) are responsible for 
administering and overseeing more than $200 billion in federal 
assistance provided for transportation and emergency management.\3\ 
These agencies also conduct other pandemic response and recovery 
functions. For example, FEMA helped supply states and localities with 
personal protective equipment (PPE) and distributing vaccine and 
testing supplies, as well as reimbursing for many activities tied to 
response to the COVID-19 pandemic.\4\ Within DOT, the Federal Aviation 
Administration (FAA), the Federal Transit Administration (FTA) and 
other department components provided pandemic-related guidance and 
support to their respective modes to help keep employees and passengers 
on our nation's transportation systems safe.\5\
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    \2\ CARES Act, Pub. L. No. 116-136 (2020); Consolidated 
Appropriations Act, 2021, Pub. L. No. 116-260 (2020); American Rescue 
Plan Act of 2021, Pub. L. No. 117-2 (2021).
    \3\ U.S Department of the Treasury, ``Coronavirus Economic Relief 
for Transportation Services (CERTS) Program,'' accessed on July 26, 
2021, available at https://home.treasury.gov/
policy-issues/coronavirus/assistance-for-american-industry/coronavirus-
economic-relief-for-
transportation-services, and ``Airline and National Security Relief 
Programs,'' accessed on July 26, 2021, available at https://
home.treasury.gov/policy-issues/coronavirus/assistance-for-
american-industry/airline-and-national-security-relief-programs; 
Federal Transit Administration, ``Novel Coronavirus (COVID-19),'' 
accessed on July 26, 2021, available at https://www.transit.dot.gov/
coronavirus; National Railroad Passenger Corporation (AMTRAK) Office of 
Inspector General, Governance: Amtrak Continues to Demonstrate Good 
Stewardship of Pandemic Relief Funds, OIG-MAR-2021-009, (May 12, 2021), 
available at: https://amtrakoig.gov/
sites/default/files/reports/OIG-MAR-2021-009%20Relief%20Act.pdf; GAO, 
COVID-19: Continued Attention Needed to Enhance Federal Preparedness, 
Response, Service Delivery, and Program Integrity, GAO-21-551, (July 
2021), available at https://www.gao.gov/assets/gao-21-551-
highlights.pdf; Federal Aviation Administration, ``Information for 
Airports about COVID-19,'' accessed on July 26, 2021, available at 
https://www.faa.gov/airports/special_programs/
covid-19-airports; House Committee on Transportation and 
Infrastructure, ``Chair DeFazio Applauds New Round of Aid for the Hard-
Hit Transportation Sector in Omnibus and COVID Relief Legislation,'' 
December 22, 2020, available at https://transportation.house.gov/news/
press-releases/chair-defazio-applauds-new-round-of-aid-for-the-hard-
hit-transportation-sector-in-omnibus-and-covid-relief-legislation-; 
FEMA, 100 Days of FEMA and Our Partners in Action (April 30, 2021) 
available at https://www.fema.gov/blog/100-days-fema-and-our-partners-
action.
    \4\ FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID-19): 
Initial Assessment Report, (January 2021), available at https://
www.fema.gov/sites/default/files/documents/fema_
covid-19-initial-assessment-report_2021.pdf;
    \5\ FTA, ``FTA COVID-19 Resource Tool'' (May 7, 2021), available at 
https://www.transit.dot.gov/regulations-and-programs/safety/fta-covid-
19-resource-tool; and FAA, Coronavirus Guidance and Resources from FAA 
(April 19, 2021), available at https://www.faa.gov/coronavirus/
guidance_resources/.
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OVERSIGHT OF THE FEDERAL RESPONSE_SUMMARY

    The federal oversight community, such as GAO, PRAC, and 
federal Offices of Inspectors General (OIGs), have been 
monitoring agencies' use of COVID-19 relief and response funds. 
These organizations also have assessed the federal government's 
actions, policies, and programs to respond to COVID-19 to 
identify problems, including cases of waste, fraud, abuse, and 
mismanagement, as well as lessons learned and areas for 
improvement.
    Historically, federal oversight organizations have found 
that large-scale federal relief programs can be vulnerable to 
significant risk of erroneous payments, waste, and fraud.\6\ 
For example, GAO reported that the American Reinvestment and 
Recovery Act of 2009 posed these types of risks because of the 
need to spend funds quickly and because it increased funding 
for existing programs to a degree that might have exceeded the 
capacity of existing controls and oversight mechanisms.\7\ 
Similarly, the DOT OIG reported that significant infusions of 
federal funding--such as the disaster relief funding provided 
to FTA for transit agencies in the wake of Hurricane Sandy--can 
create the risk of improper payments without appropriate agency 
oversight plans and procedures in place.\8\ In light of these 
and other risks, an effective federal response to COVID-19 
fraud risks, according to GAO, should help ensure that federal 
programs fulfill their intended purpose, funds are spent 
effectively, and assets are safeguarded.\9\
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    \6\ GAO, ``COVID-19: Critical Vaccine Distribution, Supply Chain, 
Program Integrity, and Other Challenges Require Focused Federal 
Attention,'' GAO-21-265, (January 28, 2021), available at https://
www.gao.gov/products/gao-21-265; PRAC, Update: Top Challenges in 
Pandemic Relief and Response, (February 3, 2021), available at https://
www.pandemicoversight.gov/
media/file/update-top-challenges-pandemic-relief-and-response.
    \7\ GAO, Recovery Act: Opportunities to Improve Management and 
Strengthen Accountability over States' and Localities' Uses of Funds, 
GAO-10-999, (September 20, 2010), available at https://www.gao.gov/
assets/gao-10-999.pdf.
    \8\ DOT OIG, Initial Assessment of FTA's Oversight of the Emergency 
Relief Program and Hurricane Sandy Relief Funds, MH-2014-008, (December 
3, 2013), available at https://www.oig.dot.gov/sites/default/files/
FTA%E2%80%99s%20Oversight%20of%20the%20Emergency
%20Relief%20Program%20and%20Hurricane%20Sandy%20Relief%20Funds%5E12-3-
13_1.pdf.
    \9\ Supra n. 4, GAO-21-265.
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    Other challenges that the oversight community identified 
include problems with FEMA's disaster-management capabilities, 
interagency coordination, and incomplete reporting on the use 
of pandemic relief funds. In its work on FEMA, GAO found a lack 
of coordination with the Department of Health and Human 
Services (HHS) and other federal partners on the procurement 
and delivery of essential PPE, shortages in staff available to 
be deployed to disaster areas, and inconsistencies in how FEMA 
communicates with states and localities on the use of advance 
contracting.\10\
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    \10\ GAO, COVID-19: FEMA's Role in the Response and Related 
Challenges, GAO-20-685T (July 14, 2020), available at https://
www.gao.gov/products/gao-20-685t and COVID-19: Federal Efforts Could Be 
Strengthened by Timely and Concerted Actions, GAO-20-701, (September 
21, 2020), available at https://www.gao.gov/products/gao-20-701.
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    In addition, GAO criticized the Office of Management and 
Budget's (OMB) issuance of a Compliance Supplement, as part of 
the Single Audit Act, that is used to help auditors understand 
a federal program's objectives, procedures, and compliance 
requirements during audits of non-federal recipients of federal 
funds, such as local and state governments and nonprofit 
organizations.\11\ The 2020 Compliance Supplement was not 
released by OMB until August 2020, after initial COVID-19 
relief funds had already been dispersed to recipients. However, 
GAO found the supplement to be incomplete and said the delay in 
issuing it ``may lead to inconsistent reporting and affect 
award recipients' development of corrective actions.'' \12\ GAO 
warned that preparing and providing this guidance to auditors 
in a timely manner was ``essential to help ensure that single 
audits can be performed timely and enhance the federal 
government's ability to help safeguard billions of dollars in 
federal funds, including those provided under COVID-19 relief 
laws.'' \13\ OMB issued an addendum to the Compliance 
Supplement in December 2020, but it did not address all 
concerns raised by auditors to conduct these single audits.\14\ 
In March 2021, OMB issued a memorandum to executive branch 
agencies that outlines steps agencies must take to implement 
sound financial management of the pandemic relief funding 
resources, including complying with the requirements of the 
Single Audit Act.\15\ The memorandum states that when OMB 
issues its annual compliance supplement later this year, it 
will include the topic of subaward reporting as a requirement 
for all financial assistance programs that are reviewed under 
the Single Audit Act.\16\
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    \11\ GAO, COVID-19: Sustained Federal Action Is Crucial as Pandemic 
Enters Its Second Year, GAO-21-387, March 2021, available at https://
www.gao.gov/assets/gao-21-387.pdf.
    \12\ Id.
    \13\ Id.
    \14\ Id.
    \15\ Office of Management and Budget, Memorandum for the Heads of 
Executive Departments and Agencies: Promoting Public Trust in the 
Federal Government through Effective Implementation of the American 
Rescue Plan Act and Stewardship of the Taxpayer Resources, (March 19, 
2021) available at https://www.whitehouse.gov/wp-content/uploads/2021/
03/M_21_20.pdf.
    \16\ Id.
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    Regarding the use of relief funds, PRAC found that 
agencies' initial reporting on the use of pandemic funds left 
out important information required by the CARES Act, such as 
identifying all subrecipients of the funding.\17\ PRAC 
recommended that OMB issue guidance to agencies to direct them 
to collect and report the missing information.\18\
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    \17\ PRAC, MITRE Report: Transparency in Pandemic-Related Federal 
Spending: Report of Alignment and Gaps, (November 2020), available at 
https://www.pandemicoversight.gov/
media/file/transparency-pandemic-related-federal-spending-full-report.
    \18\ Id.
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    Another critical component of the oversight efforts of the 
OIGs and PRAC is supporting federal agency personnel through 
training and other assistance. For example, the DHS OIG has 
provided training to program staff on how to identify cases of 
waste, fraud, or abuse related to COVID-19 relief funding, and 
PRAC has hosted a training session on identifying and 
preventing loan fraud.\19\ PRAC also supports federal OIGs' 
data analysis capabilities by providing them with non-public 
data sets on selected pandemic relief programs and helping them 
get easier access to data analytics contractors.\20\
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    \19\ Committee staff briefings with DHS OIG on February 11, 2021, 
and with PRAC on April 21, 2021.
    \20\ Committee staff briefing with PRAC on April 21, 2021.
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GOVERNMENT ACCOUNTABILITY OFFICE

    The CARES Act directed GAO to monitor and oversee the use 
of funds made available to prepare for, respond to, and recover 
from the COVID-19 pandemic.\21\ To date, GAO has issued eight 
reports that assess efforts across the government and has made 
87 recommendations to improve the COVID-19 response.\22\ 
However, federal agencies have only fully implemented 16 of 
these 87 recommendations so far, but have generally agreed with 
57, or 66 percent, of these recommendations and are in the 
process of implementing those.\23\ GAO has examined, among 
other things, the federal government's management of the 
medical supply chain and its assistance to state and local 
emergency management efforts; support provided to airports, 
airlines, and other aviation companies through loans and 
grants; and FTA's assistance to the nation's transit 
agencies.\24\
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    \21\ Pub. L. No. 116-136, Sec.  19010, 134 at 579-81.
    \22\ GAO, ``COVID-19: Continued Attention Needed to Enhance Federal 
Preparedness, Response, Service Delivery, and Program Integrity,'' GAO-
21-551, (July 2021), available at https://www.gao.gov/assets/gao-21-
551-highlights.pdf
    \23\ Id.
    \24\ See https://www.gao.gov/coronavirus and discussion on 
following pages.

    LFEMA Lacked an Adequate Plan and National Strategy for the 
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Supply Chain of Critical Equipment

    GAO reported in September 2020 that FEMA, along with HHS 
and the Department of Defense, had taken steps to mitigate 
supply chain issues that were leading to shortages in the 
availability of PPE and testing supplies.\25\ Nonetheless, 
there continued to be constraints around certain types of PPE 
and testing supplies. For example, in the summer of 2020, some 
states, nursing homes, and an association of nurses reported 
PPE shortages, including N95 masks, nitrile gloves, and 
gowns.\26\ Thousands of nurses reported that as a result they 
were required or encouraged to re-use single-use N95 masks.\27\ 
GAO also found that states and public health laboratories 
experienced ongoing shortages of testing supplies, including 
swabs, reagents, and tubes, in the summer of 2020.\28\
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    \25\ GAO, COVID-19: Federal Efforts Could Be Strengthened by Timely 
and Concerted Actions, GAO-20-701, (September 21, 2020), available at 
https://www.gao.gov/products/gao-20-701.
    \26\ Id.
    \27\ Id.
    \28\ Id.
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    In the midst of these supply constraints, GAO revealed that 
FEMA, along with HHS, had not developed plans outlining 
specific actions the federal government would take to help 
mitigate remaining medical supply gaps needed to respond to the 
pandemic, including through the use of existing Defense 
Production Act authorities.\29\ Further, FEMA and HHS had not 
worked with their federal partners to define roles and 
responsibilities for managing the supply chain.\30\
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    \29\ Id.
    \30\ Id.
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    GAO recommended that HHS, in coordination with FEMA, (1) 
create such a plan and (2) document roles and responsibilities 
for supply chain management.\31\ Creating a plan for continued 
support of the COVID-19 pandemic, according to GAO, can help 
inform a longer-term, comprehensive national supply chain 
strategy, which in turn could help better position all 
stakeholders for future public health events.\32\ GAO indicated 
that ``transition planning efforts are underway'' by HHS, but 
that they ``have not yet culminated in a written plan,'' which 
GAO has suggested HHS should prepare ``immediately.'' \33\
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    \31\ Id.
    \32\ Id.
    \33\ GAO, COVID-19: Federal Efforts Could Be Strengthened by Timely 
and Concerted Actions, GAO-20-701, (September 2020), available at: 
https://www.gao.gov/assets/gao-20-701.pdf

    LStates, Territories, and Tribes Faced Challenges Managing 
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Supplies and Navigating FEMA Reimbursement Programs

    Officials from FEMA regional offices and states also 
identified problems related to federal support programs for 
pandemic supplies and other emergency expenses. According to 
GAO, these challenges continue to hamper their efforts to plan 
for and carry out their pandemic response plans.
     LSome state officials described confusion about 
the various federal programs available to pay for PPE and 
testing supplies, including about reimbursement and cost share 
responsibility, and concerns about potential duplication of 
benefits.\34\ States had trouble confirming that the right 
entities received correct and usable supplies when FEMA-
provided supplies were shipped directly to local points of 
care, such as hospitals, laboratories, or nursing homes.\35\
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    \34\ Supra, n. 8, GAO-20-701
    \35\ Id.
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     LSome tribal leaders who had trouble completing 
administrative requirements for Public Assistance grants said 
that no FEMA staff were available to assist them. Further, FEMA 
failed to conduct sufficient outreach to tribes when 
determining items eligible for reimbursement under the Public 
Assistance program, even though such outreach is required by 
FEMA's own policy.\36\
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    \36\ Supra, n. 9, GAO-21-387.

    In September 2020, GAO recommended that FEMA and HHS work 
with federal, state, territorial, and tribal stakeholders to 
devise interim solutions to help states enhance their ability 
to track the status of supply requests and plan for supply 
needs for the remainder of the COVID-19 pandemic response.\37\ 
More recently, in March 2021, GAO recommended that FEMA provide 
timely and consistent technical assistance to support tribal 
governments and that it adhere to its policy on tribal 
consultation when developing new policies and procedures 
related to COVID-19 assistance.\38\
---------------------------------------------------------------------------
    \37\ Supra, n. 8 GAO-20-701.
    \38\ Supra, n. 8 and 9 GAO-20-701, GAO-21-387.

---------------------------------------------------------------------------
    DOT Needs a National Aviation Preparedness Plan

    Since 2015, just after the 2014 Ebola outbreak in West 
Africa, GAO has reported on the importance of DOT developing a 
national aviation preparedness plan so safeguards are in place 
to limit the spread of communicable disease threats and to 
minimize unnecessary interference with travel and trade.\39\ 
Although DOT issued guidance to airports and airlines on 
measures to mitigate the public health risks associated with 
COVID-19, it has still not developed a preparedness plan for 
future communicable disease threats.\40\ DOT has said that HHS 
and DHS should lead such planning efforts since they are 
responsible for, respectively, communicable disease response 
and preparedness planning.\41\ However, both DHS and HHS have 
said that they are not well positioned to develop a pandemic 
preparedness plan for aviation.\42\ In February 2021, H.R. 884, 
the National Aviation Preparedness Plan Act, was reintroduced 
by Aviation Subcommittee Chair Rick Larsen.\43\ This bill would 
require DOT, in coordination with HHS and DHS, to develop a 
national aviation preparedness plan for communicable disease 
outbreaks.\44\
---------------------------------------------------------------------------
    \39\ GAO, Air Travel and Communicable Diseases: Comprehensive 
Federal Plan Needed for U.S. Aviation System's Preparedness, GAO-16-127 
(December 16, 2015), available at https://www.gao.gov/products/gao-16-
127; Air Travel and Communicable Diseases: Status of Research Efforts 
and Action Still Needed to Develop Federal Preparedness Plan, GAO-20-
655T (June 23, 2020), available at https://www.gao.gov/products/gao-20-
655t; and COVID-19: Brief Update on Initial Federal Response to the 
Pandemic, GAO-20-708, (August 31, 2020), available at https://
www.gao.gov/products/gao-20-708.
    \40\ Id.
    \41\ Id.
    \42\ Supra, n. 8, GAO-20-708.
    \43\ H.R.884, National Aviation Preparedness Plan Act of 2021.
    \44\ Id.

    LPayroll Support Program (PSP) Needs Better Compliance 
---------------------------------------------------------------------------
Monitoring

    As GAO reported in September 2020, standing up a new 
financial assistance program in a condensed time frame posed 
challenges both to Treasury and program recipients.\45\ 
Aviation industry associations told GAO that their members 
experienced confusion about PSP eligibility and other 
requirements, lack of direct contact at Treasury for answers to 
time-sensitive issues and means to check on the status of an 
application, and delays in PSP awards.\46\ Regarding these 
identified challenges, Treasury officials said that they 
published email addresses where applicants could direct 
questions and communicated with more applicants, and redesigned 
the application portal to be more user-friendly.\47\
---------------------------------------------------------------------------
    \45\ Supra, n. 8, GAO-20-701.
    \46\ Id.
    \47\ Supra, n. 8 and 9, GAO-21-387, GAO-20-701.
---------------------------------------------------------------------------
    Further, while PSP funds have benefited recipients, as 
discussed in the following paragraph, certain factors added to 
the risk of funds being used for purposes other than payroll 
support.\48\ Some PSP recipients accessed other assistance 
under the CARES Act that may overlap with PSP funds, such as 
the Small Business Administration's (SBA) Paycheck Protection 
Program (PPP), while others received PSP funds in excess of 
their number of employees. GAO notes that while these actions 
might be consistent with program requirements, they make it 
more difficult to ensure PSP funds are used to only pay 
employees.\49\ To help mitigate these risks, Treasury started 
to monitor PSP recipients' compliance with program terms; but, 
it has not finalized its monitoring plans, determined which 
automated tests will be used, or identified factors or 
thresholds from testing that trigger additional reviews.\50\
---------------------------------------------------------------------------
    \48\ General Aviation Manufacturers Association, Protecting 
Aviation Manufacturing and Maintenance Jobs, (March 10, 2021) available 
at https://gama.aero/news-and-events/press-releases/protecting-
aviation-manufacturing-and-maintenance-jobs/; Airlines for America, 
Statement from A4A CEO and President Nicholas E. Calio on the Passage 
of the American Rescue Plan (March 10, 2021) available at https://
www.airlines.org/news/statement-from-a4a-ceo-and-president-nicholas-e-
calio-on-the-passage-of-the-american-rescue-plan/.
    \49\ GAO, COVID-19: Urgent Actions Needed to Better Ensure an 
Effective Federal Response, GAO-21-191, (November 30, 2020), available 
at https://www.gao.gov/products/gao-21-191.
    \50\ Supra, n. 9, GAO-21-387.
---------------------------------------------------------------------------
    Separately, the Treasury OIG found that some air carriers 
applying for PSP loans incorrectly calculated payroll amounts, 
affecting the accuracy of the amounts awarded to these 
recipients.\51\ Upon learning of the OIG's findings, Treasury 
implemented measures to identify and correct PSP award 
amounts.\52\
---------------------------------------------------------------------------
    \51\ Department of the Treasury Office of Inspector General, 
Interim Audit Update--Air Carrier and Contractor Certifications for 
Payroll Support Program (March 31, 2021), available at https://
oig.treasury.gov/sites/oig/files/2021-04/OIG-21-025.pdf.
    \52\ Id.

    LAction Is Needed to Ensure Assistance to Aviation Industry 
---------------------------------------------------------------------------
Is Equitable

    Treasury's assistance to the aviation industry may have 
disproportionately gone to large airlines.\53\ In its report on 
the CARES Act loan program for aviation, GAO found that small 
businesses were less likely to receive loans under this program 
and that Treasury prioritized applications from large passenger 
carriers.\54\ The Regional Airline Association expressed 
concerns that Treasury delayed action on smaller airlines' PSP 
loan applications, while approving applications for large air 
carriers.\55\ Industry associations reported to GAO that for 
applicants such as smaller air carriers and ticket agents, the 
amount of time Treasury took to evaluate loan applications, as 
well as other challenges, affected the number of loans 
executed.\56\ To better engage the aviation community, GAO 
reported that Treasury could have made greater use of DOT to 
design the program, communicate with businesses, and help in 
the application evaluation process or loan program, as many 
eligible businesses have established relationships with 
DOT.\57\ Looking forward, GAO made suggestions for better 
ensuring equity among businesses of different sizes and types: 
\58\
---------------------------------------------------------------------------
    \53\ GAO, Financial Assistance: Lessons Learned from CARES Act Loan 
Program for Aviation and Other Eligible Businesses, GAO-21-198 
(December 10, 2020), available at https://www.gao.gov/products/gao-21-
198.
    \54\ Id.
    \55\ Regional Airline Association President Faye Malarkey Black 
letter to Treasury Secretary Janet Yellen (March 11, 2021) available at 
https://www.raa.org/wp-content/uploads/2021/03/20210311-RAA-Treasury-
Letter-PSP2-delays-PSP3-request_FINAL.pdf.
    \56\ GAO-21-198.
    \57\ Id.
    \58\ Id.
---------------------------------------------------------------------------
     LEstablish multiple programs, or multiple paths 
within a program, to better accommodate businesses of varied 
types and sizes.\59\
---------------------------------------------------------------------------
    \59\ Id.
---------------------------------------------------------------------------
     LCommunicate clear timelines and expectations for 
borrowers to avoid frustration among applicants regarding the 
loan application process and the time needed to make loans.\60\
---------------------------------------------------------------------------
    \60\ Id.

---------------------------------------------------------------------------
    Airport Grants

    The CARES Act provided substantial additional funding for 
airports through a program similar to the Airport Improvement 
Program (AIP), and though FAA already had processes for 
administering grants of this type, it nonetheless faced 
challenges administering and monitoring the funding.\61\ To 
address the increased workload of processing and monitoring 
more grants under expedited timeframes, FAA hired staff, 
streamlined the invoicing process to reduce workload, and 
provided consolidated information to airports about 
eligibility.\62\ According to FAA officials, FAA staff review 
all reimbursement requests from airports to help ensure that 
only eligible costs are reimbursed with CARES Act funding.\63\
---------------------------------------------------------------------------
    \61\ CARES Act, Pub. L. No. 116-136 (2020), Federal Aviation 
Administration, Grants-in-Aid for Airports; see also supra, n. 8, GAO-
20-701.
    \62\ Supra n.42 and 9, GAO-21-191, GAO-21-387
    \63\ Supra, n. 8, GAO-20-701.
---------------------------------------------------------------------------
    FAA officials have also taken actions to oversee and 
monitor compliance with workforce retention requirements. The 
CARES Act required that most airports accepting grants must 
continue to employ at least 90 percent of the number of 
individuals employed prior to the pandemic.\64\ FAA's actions 
include reviewing quarterly reports from airports, sending 
letters to the airports that had not submitted the required 
reports, and comparing airports' current workforce numbers to 
those from March 2020 to ensure they meet the 90 percent 
threshold.\65\ FAA told GAO that, as of January 2021, no 
airports had requested a waiver from the workforce retention 
requirements.\66\
---------------------------------------------------------------------------
    \64\ CARES Act, Pub. L. No. 116-136 (2020), Federal Aviation 
Administration, Grants-in-Aid for Airports.
    \65\ Supra, n. 42, GAO-21-191; supra n. 9, GAO-21-387.
    \66\ Supra, n. 9, GAO-21-387.

---------------------------------------------------------------------------
    Grants to Transit Agencies

    In all, FTA received nearly $70 billion in COVID-relief aid 
for transit agencies.\67\ According to GAO, FTA has not 
experienced any notable challenges with administering the $25 
billion in grants from the CARES Act or overseeing recipients' 
use of the funds, due to the funds being provided through 
existing programs that have well established procedures for 
administration and oversight.\68\ FTA officials told GAO that 
FTA continues regular outreach to recipients through industry 
calls, and regional staff are in regular contact with 
recipients.\69\ These officials also told GAO that they updated 
the oversight guidance for the grant programs with information 
on CARES Act requirements, and that FTA plans to oversee the 
funding through its existing review programs.\70\ In addition, 
daily reports on CARES Act obligations and disbursements to 
transit agencies are sent to the FTA Office of the 
Administrator, ensuring that the agency's leadership is both 
engaged and well informed on these issues.\71\
---------------------------------------------------------------------------
    \67\ Federal Transit Administration, Novel Coronavirus, (last 
accessed July 21, 2021) https://www.transit.dot.gov/coronavirus.
    \68\ Supra n. 11, GAO-21-387; supra, n. 42, GAO-21-191; supra n. 8, 
GAO-20-701.
    \69\ Supra, n. 42, GAO-21-191.
    \70\ GAO-21-191.
    \71\ Supra, n. 8, GAO-20-701.
---------------------------------------------------------------------------
    Similarly, transit agencies appear to have had little 
difficulty with the CARES Act-funded grants. Officials from 22 
transit agencies GAO interviewed for its November 2020 report 
said they had not experienced challenges related to the 
distribution of CARES Act grants from FTA, and officials from 
all but one of these transit agencies said they had not faced 
challenges getting help from FTA during the awards process.\72\ 
Early on, some transit agencies had trouble understanding the 
expanded list of activities eligible for CARES Act funding. In 
response, FTA provided technical assistance through webinars, 
guidance on its website, and support from regional staff.\73\
---------------------------------------------------------------------------
    \72\ Supra, n. 42, GAO-21-191.
    \73\ Supra, n. 8, GAO-20-701.
---------------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION OFFICE OF INSPECTOR GENERAL (DOT OIG)

    The DOT OIG identified several key risk areas in DOT's 
oversight of CARES Act funding. These areas, some of which are 
described below, are based on previous OIG work on DOT's 
implementation of funds for economic stimulus or emergency 
relief, such as the American Recovery and Reinvestment Act of 
2009.\74\
---------------------------------------------------------------------------
    \74\ DOT OIG, Memorandum from the Office of Inspector General of 
the U.S. Department of Transportation to the Secretary of 
Transportation: Information: Key Potential Risk Areas for the 
Department of Transportation in Overseeing CARES Act Requirements (June 
17, 2020) available at https://www.oig.dot.gov/library-item/37926.

    LImproved Monitoring and Increased Outreach Can Help 
---------------------------------------------------------------------------
Prevent Waste, Fraud, and Abuse

    The DOT OIG observed that the volume of CARES Act funds and 
the speed with which they are disbursed puts these funds at a 
higher risk for improper payments, fraud, waste, and abuse.\75\ 
For example, the CARES Act provided $10 billion for airports, 
much more than the approximately $3 billion in annual funding 
for airports that FAA normally oversees.\76\ Further, the OIG 
has found weaknesses in DOT's financial management systems, 
resulting in incomplete and inaccurate expenditure data20.\77\ 
Implementing procedures for tracking funds and detecting 
improper payments could help DOT better ensure effective 
stewardship of its funds.\78\ The DOT OIG also suggested that 
DOT mitigate these risks by increasing its outreach and 
education efforts to enhance understanding among DOT staff, 
grantees such as airports and transit agencies, and their 
contractors on how to recognize and prevent potential fraud to 
the appropriate authorities.\79\
---------------------------------------------------------------------------
    \75\ Id.
    \76\ Supra, n. 42, GAO-21-191; CARES Act, Pub. L. No. 116-136 
(2020), Federal Aviation Administration, Grants-in-Aid for Airports.
    \77\ DOT OIG, Quality Control Review of the Independent Auditor's 
Review of DOT's DATA Act Implementation (October 29, 2019), available 
at https://www.oig.dot.gov/sites/default/files/
DOT%20DATA%20Act%20QCR%20Final%20Report%5E10-29-19.pdf.
    \78\ DOT OIG, June 2020 memorandum, available at https://
www.oig.dot.gov/sites/default/files/
OIG%20Memorandum%20to%20the%20Secretary%20-
%20Key%20Risk%20Areas%20for%20DOT
%20in%20Overseeing%20CARES%20Act%20Requirements.pdf.
    \79\ Id.

---------------------------------------------------------------------------
    LAirport Grants Require Effective Risk-Based Oversight

    The DOT OIG identified some aspects of CARES Act funding 
for airports that FAA should focus its management and oversight 
activities on, including the following:\80\
---------------------------------------------------------------------------
    \80\ Id.
---------------------------------------------------------------------------
     LFAA will need to ensure that recipient airports 
comply with the workforce retention requirements of the CARES 
Act.
     LThe CARES Act authorized the federal share of 
approved project costs to be increased to 100 percent, 
eliminating the local share of the costs. As a result, FAA 
could face risks related to controlling project costs, since 
localities are less incentivized to do so.
     LBecause FAA is overseeing a vast number of grants 
with its limited resources, it should follow a risk-based 
oversight approach and ensure that its existing risk 
assessments are sufficient given new program requirements and 
restrictions.

    In February 2021, the DOT OIG initiated an audit of FAA's 
award and oversight of CARES Act airport grants. The audit's 
purpose is to assess whether FAA's policies and procedures for 
awarding and overseeing CARES Act grants are sufficient to 
protect taxpayer interests.\81\
---------------------------------------------------------------------------
    \81\ DOT OIG, New Audit Announcement: Audit Initiated of FAA's 
Award and Oversight of CARES Act Funds (February 19, 2021), available 
at https://www.oig.dot.gov/library-item/38296.

---------------------------------------------------------------------------
    LPrudent Oversight of Pandemic Waivers Is Needed

    To account for conditions caused by COVID-19, the CARES Act 
allows DOT to temporarily waive certain existing federal 
requirements, such as some for the state highway safety 
programs that the National Highway Traffic Safety 
Administration (NHTSA) administers.\82\ The DOT OIG noted that 
it will be vital for DOT to monitor the use and impact of these 
waivers.\83\
---------------------------------------------------------------------------
    \82\ DOT OIG, June 2020 memorandum, available at https://
www.oig.dot.gov/sites/default/
files/OIG%20Memorandum%20to%20the%20Secretary%20-
%20Key%20Risk%20Areas%20for
%20DOT%20in%20Overseeing%20CARES%20Act%20Requirements.pdf.
    \83\ Id.
---------------------------------------------------------------------------
    The DOT OIG has other audits under way that it expects will 
identify ways that the operating administrations can improve 
their COVID-19 responses. These include reports on FTA's 
financial management system that support CARES Act funding and 
its management of Hurricane Sandy emergency funding.\84\
---------------------------------------------------------------------------
    \84\ DOT OIG, Audit Initiated of FTA's Hurricane Sandy Funding 
Progress (January 15, 2020) available at https://www.oig.dot.gov/
library-item/37684; Audit Initiated of Security Controls for FTA's 
Financial Management Systems That Support CARES Act Funding (November 
12, 2020), available at https://www.oig.dot.gov/library-item/38114. 
Although the Hurricane Sandy report is not expected to explicitly 
address pandemic relief funding, DOT OIG officials told Committee staff 
in an April 2020 briefing that they expect the report's findings to be 
relevant to pandemic relief funding because FTA uses the same systems 
and procedures to manage both funding sources.

---------------------------------------------------------------------------
    Amtrak's Use and Accounting of Funds

    Amtrak received more than $3 billion, a total of $1.7 
billion in COVID-19 relief funds, including $1.7 billion in 
March 2021.\85\ In April 2020, the Amtrak OIG began an audit of 
the use of pandemic relief funds appropriated to support Amtrak 
services and its state and commuter rail partners.\86\ The 
Amtrak OIG issued reports in August 2020 \87\ and December 
2020.\88\ In May 2021 it issued another report stating that 
Amtrak ``continues to be a good steward of the funds Congress 
has provided'' but also that Amtrak could be more transparent 
in its communications and reporting, and made recommendations 
for improvement.\89\
---------------------------------------------------------------------------
    \85\ See: Department of Transportation, ``U.S. Transportation 
Secretary Elaine L. Chao Announces $1 Billion for Amtrak in Response to 
COVID-19,'' DOT Press Release, (April 10, 2020), available at: https://
railroads.dot.gov/newsroom/press-releases/us-transportation-secretary-
elaine-
l-chao-announces-1-billion-amtrak and National Railroad Passenger 
Corporation (AMTRAK) Office of Inspector General, ``Governance: Amtrak 
Continues to Demonstrate Good Stewardship of Pandemic Relief Funds,'' 
OIG-MAR-2021-009, (May 12, 2021), available at: https://amtrakoig.gov/
sites/default/files/reports/OIG-MAR-2021-009%20Relief%20Act.pdf
    \86\ Amtrak Office of Inspector General, Governance: Observations 
on Amtrak's Use of CARES Act Funds (August 5, 2020) available at 
https://amtrakoig.gov/sites/default/files/reports/
OIG-MAR-2020-013%20CARES%20Act%20Review.pdf.
    \87\ Id.
    \88\ Amtrak Office of Inspector General, Governance: Final 
Observations on Amtrak's Use of CARES Act Funds (December 15, 2020) 
available at https://amtrakoig.gov/sites/
default/files/reports/OIG-MAR-2020-013%20CARES%20Act%20Review.pdf.
    \89\ Amtrak Office of Inspector General, Governance: Amtrak 
Continues to Demonstrate Good Stewardship of Pandemic Relief Funds (May 
12, 2021) available at https://amtrakoig.gov/
sites/default/files/reports/OIG-MAR-2021-009%20Relief%20Act.pdf.
---------------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY OFFICE OF INSPECTOR GENERAL (DHS OIG)

    LInvestigating and Preventing Fraud against the Government

    The DHS OIG has opened at least 120 potential fraud 
investigations \90\ since the start of the pandemic and has 
uncovered numerous fraud schemes.\91\ According to DHS OIG 
officials, ongoing investigations include those related to 
theft of public funds, hoarding of scarce materials, and 
fictitious or fraudulent claims against the government.\92\ For 
programs within FEMA's purview, the two focus areas for these 
investigations, according to DHS OIG officials, have been 
unemployment insurance fraud and misrepresentations regarding 
PPE.\93\ For example, the DHS OIG investigated a Virginia 
businessman who fraudulently attempted to obtain a multi-
million-dollar PPE contract from FEMA.\94\ As part of his 
scheme, the individual falsely stated to procurement officials 
from FEMA that he was in possession of large quantities of PPE, 
including N95 masks. Based on the false statements, FEMA 
awarded the individual's company a contract valued at 
$3,510,000, though according to FEMA, the funds were not 
provided to this individual.\95\ The individual pleaded guilty 
in February 2021 of making false statements to federal agencies 
and faces up to 35 years in prison for these and other related 
charges.\96\
---------------------------------------------------------------------------
    \90\ E-mail from DHS OIG staff to T&I staff, July 23, 2021.
    \91\ Committee staff briefing with DHS OIG, February 11, 2021.
    \92\ Id.
    \93\ Committee staff briefing with DHS OIG, February 11, 2021.
    \94\ United States Attorney's Office, Eastern District of Virginia, 
CEO Pleads Guilty to Defrauding Multiple Federal Agencies (accessed on 
March 9, 2021) https://www.justice.gov/
usao-edva/pr/ceo-pleads-guilty-defrauding-multiple-federal-agencies.
    \95\ Id.
    \96\ Id.
---------------------------------------------------------------------------
    The DHS OIG is working with FEMA and other DHS components, 
as well as with its federal partners such as SBA, the 
Department of Veterans Affairs, the Federal Bureau of 
Investigation (FBI), and the U.S. Secret Service, to identify 
and prevent fraud. Further, the DHS OIG provides training to 
FEMA employees on tools they can use to prevent and detect 
fraud. DHS OIG officials said that this training is updated 
regularly to reflect new types of fraud schemes investigators 
are finding.\97\ However, the DHS OIG's previous work indicates 
that training for FEMA employees is not always effectively 
implemented. In 2019, the OIG assessed FEMA's compliance with a 
statutory requirement that it provide training on the 
prevention of waste, fraud, and abuse in federal disaster 
relief assistance programs.\98\ The OIG found that most of 
FEMA's employees had not completed this required annual 
training and recommended that FEMA establish monitoring and 
enforcement mechanisms to ensure training requirements are 
met.\99\
---------------------------------------------------------------------------
    \97\ Id.
    \98\ DHS OIG, FEMA Must Take Additional Steps to Demonstrate the 
Importance of Fraud Prevention and Awareness in FEMA Disaster 
Assistance Programs (July 24, 2019), available at https://
www.oig.dhs.gov/reports/2019/fema-must-take-additional-steps-
demonstrate-importance-
fraud-prevention-and-awareness-fema-disaster-assistance-programs/oig-
19-55-jul19.
    \99\ Id.

    LDHS OIG Is Reviewing FEMA's Role in Pandemic Response and 
---------------------------------------------------------------------------
Preparedness

    The DHS OIG has previously found FEMA's management of 
disaster relief grants and funds to be inadequate and reported 
last year that improving FEMA's grant management would be one 
of DHS's top challenges in responding to the COVID-19 
pandemic.\100\ The DHS OIG has identified a pattern of FEMA 
management failures in overseeing procurements and reimbursing 
procurement costs, and it continues to see systemic problems 
and operational difficulties.\101\ At times, according to the 
DHS OIG, FEMA has not followed procurement laws, regulations, 
and procedures, nor has it ensured disaster grant recipients 
and subrecipients understand and comply with these 
authorities.\102\
---------------------------------------------------------------------------
    \100\ PRAC, Top Challenges Facing Federal Agencies: COVID-19 
Emergency Relief and Response Efforts, (June 17, 2020), available at 
https://www.oversight.gov/sites/default/files/oig-
reports/Top%20Challenges%20Facing%20Federal%20Agencies%20-%20COVID-
19%20Emergency
%20Relief%20and%20Response%20Efforts_1.pdf.
    \101\ DHS OIG, FEMA Contracting: Reviewing Lessons Learned from 
Past Disasters to Improve Preparedness, Testimony before U.S. House of 
Representatives Committee on Homeland Security (May 9, 2019), available 
at https://www.oig.dhs.gov/sites/default/files/assets/TM/2019/oigtm-
daig-aud-katherine-trimble-050919.pdf.
    \102\ Id.
---------------------------------------------------------------------------
    The DHS OIG has several ongoing audits related to how well 
FEMA is carrying out its responsibilities related to the COVID-
19 pandemic. These audits are examining the following issues: 
\103\
---------------------------------------------------------------------------
    \103\ DHS OIG, Ongoing Projects (accessed on May 12, 2021) https://
www.oig.dhs.gov/reports/ongoing-projects.
---------------------------------------------------------------------------
     LHow FEMA managed and distributed medical supplies 
and equipment in response to COVID-19;
     LTo what extent FEMA followed federal and 
departmental procedures and guidelines for awarding COVID-19 
contracts to prospective vendors under unusual and compelling 
circumstances; and
     LHow effectively FEMA has supported and 
coordinated federal efforts to distribute PPE and ventilators 
in response to the COVID-19 outbreak.

PANDEMIC RESPONSE ACCOUNTABILITY COMMITTEE (PRAC)

    Congress established the PRAC in the CARES Act ``to promote 
transparency,'' ``ensure coordinated, efficient, and effective 
comprehensive oversight by the Committee and Inspectors General 
over all aspects of covered funds and the Coronavirus 
response,'' and ``prevent and detect fraud, waste, abuse, and 
mismanagement.'' \104\ The PRAC is comprised of 22 federal 
inspectors general, has its own dedicated staff, and works 
closely with inspectors general across the government to 
identify the most pressing challenges in managing and 
overseeing pandemic relief funds in several areas.\105\
---------------------------------------------------------------------------
    \104\ CARES Act, Pub. L. No. 116-136 (2020), Sec. 15010
    \105\ PRAC, Update: Top Challenges in Pandemic Relief and Response 
(February 3, 2021) available at https://www.pandemicoversight.gov/
media/file/update-top-challenges-pandemic-relief-and-response.

---------------------------------------------------------------------------
    LPreventing and Detecting Fraud against Government Programs

    With the unprecedented amount of disaster response funds 
appropriated to support the country's pandemic response, the 
opportunities for defrauding government programs have 
significantly increased, according to the PRAC.\106\ The work 
conducted by OIGs to date indicates that one of the primary 
fraud risks associated with the administration of pandemic 
response funds stems from the failure to ensure that 
information from applicants is accurate.\107\ This can result 
in payments to individuals who are not in fact eligible for 
program benefits; it can also result in outright fraud, such as 
in the case of the N95 mask fraud scheme that the DHS OIG 
uncovered.\108\
---------------------------------------------------------------------------
    \106\ Id.
    \107\ Id.
    \108\ Id.

---------------------------------------------------------------------------
    Data Transparency and Completeness

    Another key challenge that PRAC identified was a lack of 
detailed data on pandemic relief funds, which is needed to 
inform funding and oversight decisions as well as to provide 
full transparency on the use of these funds.\109\ Even before 
the pandemic, inspectors general reported that the ability of 
agencies to track and report financial data was insufficient to 
meet agency needs and was a top management and performance 
challenge.\110\ According to the non-profit Project on 
Government Oversight, ``[r]obust oversight and reporting are 
especially important given the ongoing public health and 
economic emergencies that these relief funds were intended to 
help mitigate.\111\
---------------------------------------------------------------------------
    \109\ Id.
    \110\ PRAC, Top Challenges Facing Federal Agencies.
    \111\ Project on Government Oversight, Administration Seeks to 
Minimize Transparency of Coronavirus Relief Funds (May 13, 2020) 
available at https://www.pogo.org/analysis/2020/05/administration-
seeks-to-minimize-transparency-of-coronavirus-relief-funds/.
---------------------------------------------------------------------------
    The CARES Act and related legislation included detailed 
reporting requirements for agencies to help ensure transparency 
and accountability in their use of pandemic relief funds.\112\ 
In April 2020, OMB issued guidance directing agencies to use 
existing reporting processes to meet the CARES Act 
requirements, with only minor modifications.\113\ These 
existing processes, established pursuant to the Federal Funding 
and Transparency Act of 2006 as amended by the Digital 
Accountability and Transparency Act (DATA Act), include making 
information on all financial awards of more than $25,000 
publicly available on USASpending.gov.\114\ OMB's guidance 
stated that no additional reporting by agencies or recipients 
should be necessary to meet the requirements of these sections 
of the CARES Act.\115\
---------------------------------------------------------------------------
    \112\ PRAC, Top Challenges Facing Federal Agencies.
    \113\ OMB, Implementation Guidance for Supplemental Funding 
Provided in Response to the Coronavirus Disease 2019 (COVID-19) (April 
10, 2020) available at https://www.whitehouse.gov/wp-content/uploads/
2020/04/Implementation-Guidance-for-Supplemental-Funding-Provided-in-
Response.pdf.
    \114\ https://www.usaspending.gov/about, accessed on June 3, 2021.
    \115\ Supra, n. 95, OMB, Implementation Guidance.
---------------------------------------------------------------------------
    However, PRAC found that the data federal agencies had been 
reporting, as initially directed by OMB, did not satisfy all of 
the requirements in the CARES Act, in part because the act 
required more extensive reporting for certain awards.\116\ For 
example, the CARES Act explicitly directed agencies to collect 
new data on funding awards of $150,000 or more, including the 
name and description of the project or activity that received 
funding, the estimated number of jobs created or retained, and 
detailed information on subcontracts and subgrants.\117\ The 
information agencies report to USASpending.gov leaves out some 
of this required information, including job creation numbers, 
detailed project descriptions, and sub-award loan information, 
making it difficult to track the recipients of funds and the 
impact of the federal government's efforts.\118\ PRAC also 
found problems with the accuracy of the agency-reported data, 
including potentially incorrect award amounts and mismatched 
location information.\119\ GAO, likewise, has reported on 
challenges related to the accuracy, completeness, and 
timeliness of the data contained on USASpending.gov, which 
limit users' ability to appropriately interpret the data.\120\
---------------------------------------------------------------------------
    \116\ PRAC, MITRE Report.
    \117\ CARES Act, Pub. L. No. 116-136 (2020).
    \118\ PRAC, MITRE Report.
    \119\ Id.
    \120\ Supra, n. 34, GAO-20-708. See also GAO, Data Act: Quality of 
Data Submissions Has Improved but Further Action is Needed to Disclose 
Known Data Limitations, (November 8, 2019) available at https://
www.gao.gov/products/gao-20-75.
---------------------------------------------------------------------------
    Some federal OIGs have also found problems related to the 
reporting of CARES Act data.\121\ The General Services 
Administration (GSA) OIG cited control weaknesses as a 
potential impediment to accurately reporting CARES Act 
spending, referencing a November 2019 audit that found errors 
in how GSA reports certain data to USASpending.gov.\122\ 
According to the GSA OIG, GSA will need to address these errors 
to ensure that its CARES Act reporting is accurate.\123\ 
Similarly, the DHS OIG reported that key DHS financial systems 
do not comply with federal requirements, and that this 
potentially will impact financial planning, payments, and 
internal controls related to CARES Act funding.\124\
---------------------------------------------------------------------------
    \121\ PRAC, Top Challenges Facing Federal Agencies.
    \122\ GSA OIG, Audit of the Completeness, Accuracy, Timeliness, and 
Quality of GSA's 2019 DATA Act Submission, (November 1, 2019), 
available at https://www.gsaig.gov/sites/default/files/audit-reports/
A190040_1.pdf.
    \123\ GSA OIG, Top Challenges Facing The General Services 
Administration: COVID-19 Emergency Response and Relief Efforts (June 
23, 2020) available at https://www.gsaig.gov/sites/default/files/
management-challenges/GSA%20Top%20Challenges.pdf.
    \124\ PRAC, Top Challenges Facing Federal Agencies.
---------------------------------------------------------------------------
    OMB has taken steps to ensure that agencies submit data 
that better meets the requirements of the CARES Act.\125\ In 
June 2020, OMB issued a set of frequently asked questions to 
expand upon and clarify its April guidance memorandum.\126\ 
And, in August 2020, it issued a Controller Alert directing 
agencies to improve the quality of award description 
information in USASpending.gov.\127\
---------------------------------------------------------------------------
    \125\ PRAC, MITRE Report.
    \126\ OMB, CARES Act and M-20-21 Recipient Frequently Asked 
Questions (June 24, 2020), available at https://www.cfo.gov/wp-content/
uploads/2020/07/M-20-21_FAQ_07312020_
UPDATED.pdf.
    \127\ OMB, Controller Alert: Award Description Data Quality for 
Financial Assistance Awards (August 2020) available at https://
www.cfo.gov/wp-content/uploads/2020/08/CONTROLLER_
ALERT_AUGUST_2020_FA_Award_Des.pdf.

---------------------------------------------------------------------------
    ``Multi-Dipping''

    PRAC and others have identified the risk of recipients 
receiving funding from multiple federal programs for the same 
purpose (i.e., ``multi-dipping'').\128\ The Special Inspector 
General for Pandemic Recovery (SIGPR) reported that several 
airlines received payments from both the Paycheck Protection 
Program and the Payroll Support Program, a potential case of 
multi-dipping.\129\ SIGPR cautioned that the existence of 
programs resulting in multiple forms of financial support to a 
single individual or entity creates an increased risk of fraud 
and abuse.\130\ In January 2021, PRAC initiated work on 
pandemic relief funds received by tribal governments, and it 
expects to be able to identify CARES Act programs where multi-
dipping has occurred.\131\
---------------------------------------------------------------------------
    \128\ Id.
    \129\ SIGPR, Initial Report to Congress (August 3, 2020) available 
at https://www.sigpr.gov/sites/sigpr/files/2020-09/SIGPR-Initial-
Report-to-Congress-August-3-2020_0.pdf.
    \130\ Id.
    \131\ PRAC, Multi-Dipping of Pandemic Response Funds Provided to 
Tribal Government (January 29, 2021) available at https://
www.pandemicoversight.gov/oversight/reports?f%5B0
%5D=submitting_organization%3APandemic%20Response%20Accountability%20Com
mittee.
---------------------------------------------------------------------------

IMPACT OF FEDERAL COVID-19 RESPONSE AND RELIEF EFFORTS

    The policies and programs the federal government has 
implemented over the course of the pandemic have had multiple 
challenges, as discussed on the previous pages, but also many 
benefits, as is described below. States and localities received 
assistance to help vaccinate their residents.\132\ Businesses 
and public sector agencies retained workers that they otherwise 
would have laid off.\133\ The nation's transportation systems 
continued to operate safely, providing transportation for 
essential workers and others.\134\ Moreover, the economy as a 
whole is beginning to recover as the economy opens back up with 
gross domestic product expected to show a substantial increase 
this year after plunging at an annual rate of 31.4 percent in 
Q2 2020.\135\ However, there are concerns about the effect of 
inflation on this recovery.\136\
---------------------------------------------------------------------------
    \132\ FEMA, 100 Days of FEMA and Our Partners in Action (April 30, 
2021) available at https://www.fema.gov/blog/100-days-fema-and-our-
partners-action.
    \133\ General Aviation Manufacturers Association, Protecting 
Aviation Manufacturing and Maintenance Jobs, (March 10, 2021) available 
at https://gama.aero/news-and-events/press-releases/protecting-
aviation-manufacturing-and-maintenance-jobs/, Amalgamated Transit 
Union, Relief on the way for transit and working families with American 
Rescue Plan (March 10, 2021) available at https://www.atu.org/media/
releases/atu-relief-on-the-way-for-transit-and-working-families-with-
american-rescue-plan.
    \134\ Id.
    \135\ Congressional Research Service, COVID-19 and the U.S. Economy 
(May 11, 2021) available at https://crsreports.congress.gov/product/
pdf/R/R46606.
    \136\ Rachel Siegel, Biden Says Fed `should take whatever steps it 
deems necessary' to respond to inflation, Wash. Post. (July 19, 2021), 
available at https://www.washingtonpost.com/us-policy/2021/07/19/biden-
powell-inflation-economy/.

    LFEMA's Assistance to States, Localities, Tribes, 
---------------------------------------------------------------------------
Territories, and Individuals

    The COVID-19 pandemic posed an unprecedented challenge to 
the disaster response capabilities of states, localities, 
tribes, and territories. As the lead federal agency for the 
COVID-19 response, FEMA has undertaken expansive efforts to 
help them, as well as to assist individuals suffering from the 
economic hardships of the pandemic.\137\ Since January 2020, 
FEMA has taken the following actions, among others:
---------------------------------------------------------------------------
    \137\ FEMA, 100 Days.
---------------------------------------------------------------------------
     LProvided more than $4.75 billion in support of 
vaccination efforts in communities across the country.\138\
---------------------------------------------------------------------------
    \138\ Id.
---------------------------------------------------------------------------
     LWorked with its federal, state, and local 
partners to establish 1,732 new community vaccination 
centers.\139\
---------------------------------------------------------------------------
    \139\ Id.
---------------------------------------------------------------------------
     LCoordinated with HHS to deliver, as of September 
2020, 249 million N95 masks, 1.1 billion surgical masks, 46.7 
million eye and face shields, 432 million surgical gowns or 
coveralls, and more than 28.6 billion gloves.\140\
---------------------------------------------------------------------------
    \140\ Id.
---------------------------------------------------------------------------
     LProvided funding to nonprofits, faith-based 
organizations, and government entities that provide shelter, 
food, transportation, COVID-19 testing and medical care to 
their communities.\141\
---------------------------------------------------------------------------
    \141\ Id.
---------------------------------------------------------------------------
     LObligated, as of the end of September 2020, $42.6 
billion as a supplemental benefit for unemployment insurance 
benefits.\142\
---------------------------------------------------------------------------
    \142\ FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID-
19): Initial Assessment Report. FEMA's Lost Wages Assistance (LWA) 
program was unprecedented because it was instituted as a new program 
despite another discrete Stafford Act section on disaster unemployment 
assistance (Sec. 410). FEMA failed to provide the Committee with a 
legal justification memo explaining why or how LWA was administered as 
it was despite section 410.
---------------------------------------------------------------------------
     LIn January 2021, the federal cost share for a 
majority of eligible FEMA assistance for all COVID-19 related 
Emergency and Major Disasters was expanded to 100 percent and 
made applicable to costs of eligible activities from the 
beginning of the pandemic incident period on January 20, 2020, 
to September 30, 2021.\143\
---------------------------------------------------------------------------
    \143\ FEMA, FEMA Statement on 100% Cost Share (February 3, 2021) 
available at https://www.fema.gov/press-release/20210203/fema-
statement-100-cost-share.

---------------------------------------------------------------------------
    Aviation Industry

    As a result of the pandemic, air passenger demand fell far 
below prior years and, according to some industry analysts, a 
return to pre-pandemic traffic levels might not occur until 
2023.\144\ The number of passengers going through 
Transportation Security Administration (TSA) checkpoints 
increased throughout the spring of 2021 but was still far below 
pre-pandemic levels. In June 2021, for example, TSA traveler 
throughput was 26 percent lower than in June 2019.\145\ As a 
result of this decline in passenger demand and other factors, 
U.S. passenger airlines are projecting pre-tax losses of $18 
billion this year, according to Airlines for America.\146\ 
Similarly, Airports Council International-North America (ACI-
NA) expects that U.S. airports will lose at least $40 billion 
by March 2022 because of the prolonged decline in commercial 
aviation traffic.\147\
---------------------------------------------------------------------------
    \144\ GAO, COVID-19 Pandemic: Preliminary Observations on Efforts 
toward and Factors Affecting the Aviation Industry's Recovery, GAO-21-
412T (March 2, 2021) available at https://www.gao.gov/assets/gao-21-
412t.pdf.
    \145\ See, e.g., TSA, TSA Checkpoint Travel Numbers, (last accessed 
July 19, 2021). https://www.tsa.gov/coronavirus/passenger-throughput.
    \146\ Statement of Mr. Nicholas E. Calio, President and Chief 
Executive Officer, Airlines For America, ``COVID-19's Effects on U.S. 
Aviation and The Flight Path to Recovery'' before the United States 
House Committee on Transportation and Infrastructure Subcommittee on 
Aviation, (March 2, 2021) available at https://
transportation.house.gov/imo/media/doc/Calio%20Testimony.pdf.
    \147\ Airports Council International, Airports Council Applauds 
Passage of $8 Billion in COVID-19 Relief for Airports (last accessed 
July 19, 2021), available at https://airportscouncil.org/press_release/
airports-council-applauds-passage-of-8-billion-in-covid-19-relief-for-
airports/
---------------------------------------------------------------------------
    The PSP was created to prevent layoffs in this hard-hit 
sector. Congress has appropriated $63 billion to this program, 
which provides financial assistance to airlines, manufacturers, 
and other related businesses for employee wages, salaries, and 
benefits.\148\ According to the General Aviation Manufacturers 
Association, PSP has allowed companies to keep highly skilled 
workers in the industry and supported some of the smaller 
companies that needed assistance to maintain operations.\149\ 
Airlines were able to preserve the jobs of flight attendants, 
pilots, mechanics, gate agents and others, according to 
Airlines for America.\150\
---------------------------------------------------------------------------
    \148\ House Committee on Transportation and Infrastructure, Chair 
DeFazio Applauds Inclusion of T&I Provisions, Including Payroll Support 
Program Extension, in House Democrats' Latest COVID-19 Relief Package, 
(September 29, 2020), available at https://transportation.house.gov/
news/press-releases/chair-defazio-applauds-inclusion-of-tandi-
provisions-including-payroll-support-program-extension-in-house-
democrats-latest-covid-19-relief-package; U.S. Department of the 
Treasury, Airline and National Security Relief Programs (accessed on 
May 7, 2021) https://home.treasury.gov/policy-issues/coronavirus/
assistance-for-american-industry/airline-and-national-security-relief-
programs.
    \149\ General Aviation Manufacturers Association, Protecting 
Aviation Manufacturing and Maintenance Jobs, (March 10, 2021) available 
at https://gama.aero/news-and-events/press-releases/protecting-
aviation-manufacturing-and-maintenance-jobs/.
    \150\ Airlines for America, Statement from A4A CEO and President 
Nicholas E. Calio on the Passage of the American Rescue Plan (March 10, 
2021) available at https://www.airlines.org/news/statement-from-a4a-
ceo-and-president-nicholas-e-calio-on-the-passage-of-the-american-
rescue-plan/.
---------------------------------------------------------------------------
    Congress also appropriated about $20 billion in grant 
assistance to help airports respond to the COVID-19 pandemic, 
including funds for operating expenses, debt service, and other 
expenses.\151\ The additional grants are helping airports 
offset some of the financial damage from the abrupt, unexpected 
drop in air travel that resulted from precautions to limit the 
spread of COVID-19, according to ACI-NA.\152\
---------------------------------------------------------------------------
    \151\ GAO, COVID-19: Sustained Federal Action Is Crucial as 
Pandemic Enters Its Second Year, GAO-21-387 (March 31, 2021) available 
at https://files.gao.gov/reports/GAO-21-387/index.html.
    \152\ Airports Council International, Airports Council Statement on 
CARES Act Grants (last accessed July 19, 2021) available at https://
airportscouncil.org/press_release/airports-council-international-north-
america-statement-on-cares-act-grants/.

---------------------------------------------------------------------------
    Transit Agencies

    COVID-19 and the resulting shelter-in-place orders, 
business closures, suspension of tourism, and increasing 
unemployment and increasing numbers of employees working from 
home significantly decreased public transit and commuter rail 
ridership.\153\ Nationally, transit ridership in 2020 was down 
a historic 79 percent at the start of the pandemic compared to 
2019 levels.\154\ Transit agencies anticipate long-term 
consequences from the COVID-19 pandemic, including reduced 
demand for service, increased operating costs, and limited 
state and local funding.\155\ According to the American Public 
Transportation Association (APTA), when the economy does begin 
to recover, transit agencies will still be challenged with 
severe fiscal constraints as a result of physical distancing 
requirements that reduce vehicle capacity, increased costs of 
facility and vehicle cleaning and disinfection, and decreased 
ridership due to the dramatic increase in telework.\156\
---------------------------------------------------------------------------
    \153\ Abby Vesoulis, The Future of American Public Transit Depends 
on Congress, Time (December 17, 2020) available at https://time.com/
5921917/mass-transit-covid-congress/.
    \154\ American Public Transportation Association, The Impact of the 
COVID-19 Pandemic on Public Transit Funding Needs in the U.S. (January 
27, 2021) available at https://www.apta.com/wp-content/uploads/APTA-
COVID-19-Funding-Impact-2021-01-27.pdf.
    \155\ Supra, n. 9, GAO-21-387.
    \156\ American Public Transportation Association, The Impact of the 
COVID-19 Pandemic on Public Transit Funding Needs in the U.S. (January 
27, 2021) available at https://www.apta.com/wp-content/uploads/APTA-
COVID-19-Funding-Impact-2021-01-27.pdf.
---------------------------------------------------------------------------
    The CARES Act and subsequent pandemic relief funding have 
provided about $69.5 billion in grant assistance to help 
transit agencies manage these fiscal constraints.\157\ Federal 
relief funds also allowed transit agencies to keep critical 
service running, avoid layoffs, and provide workers and riders 
with COVID-19 protections.\158\ As a result, some transit 
agencies across the country have restored previously reduced 
service or have cancelled plans to further cut service.\159\ 
Transit agencies have also used the funds to mitigate the 
spread of COVID-19, including through enhanced cleaning and 
sanitation and social distancing.\160\ Further, restoring 
transit service is expected to help the nation's economic 
recovery, such as in New York City, where the economy depends 
on trains and buses to carry riders to businesses, including 
theaters, retail stores, and restaurants, that have been 
crippled by the pandemic.\161\
---------------------------------------------------------------------------
    \157\ This includes $25 billion from the CARES Act, $14 billion 
from the Consolidated Appropriations Act, 2021, and $30 billion from 
the American Rescue Plan. See https://www.transit.dot.gov/coronavirus.
    \158\ Amalgamated Transit Union, Relief on the way for transit and 
working families with American Rescue Plan (March 10, 2021) available 
at https://www.atu.org/media/releases/atu-relief-on-the-way-for-
transit-and-working-families-with-american-rescue-plan.
    \159\ New York Times, Transit Got $30 Billion in Stimulus Aid. What 
Does That Mean for Riders? (March 15, 2021) available at https://
www.nytimes.com/2021/03/15/nyregion/biden-stimulus-public-
transportation.html.
    \160\ Supra, n. 9, GAO-21-387.
    \161\ New York Times, Transit Got $30 Billion in Stimulus Aid. What 
Does That Mean for Riders? (March 15, 2021) available at https://
www.nytimes.com/2021/03/15/nyregion/biden-stimulus-public-
transportation.html.

---------------------------------------------------------------------------
    Other Transportation Sectors

    Operators of motorcoaches, school buses, and passenger 
vessels have also suffered the financial effects of lower 
demand for their services due to the pandemic. For example, 
though passenger ships operating exclusively inside the United 
States have begun to resume operations, virtually the entire 
U.S. domestic commercial passenger fleet, including overnight 
excursions, day charters, and tours, was forced to shut down 
for a year.\162\ Companies operating commuter shuttle buses and 
private bus charters also were forced to suspend service due to 
lack of passengers, and some went out of business entirely, 
according to the American Bus Association.\163\
---------------------------------------------------------------------------
    \162\ Letter from Passenger Vessel Association to Speaker Nancy 
Pelosi (April 8, 2020) available at http://www.passengervessel.com/
downloads/letters/2020-CARES-ACT-2-Speaker-Pelosi.pdf; The Maritime 
Executive, American Coastal and River Cruising is Resuming (March 16, 
2021) available at https://www.maritime-executive.com/article/american-
coastal-and-river-cruising-is-resumming.
    \163\ American Bus Association, New Report Details Motorcoach 
Industry's Dire Situation (August 10, 2020), available at https://
www.buses.org/news/article/new-report-details-motorcoach-industrys-
dire-situation.
---------------------------------------------------------------------------
    The Coronavirus Economic Relief for Transportation Services 
(CERTS) Program was created to support companies such as 
motorcoach, school bus, passenger vessel, and pilot vessel 
companies that were affected by the COVID-19 pandemic.\164\ 
Under the program, up to $2 billion in grants is made available 
to eligible companies that certify they have experienced an 
annual revenue loss of 25 percent or more as a direct or 
indirect result of COVID-19.\165\ Grant funds administered 
through the CERTS program are primarily used to cover payroll 
costs but may also be used to cover the acquisition of 
services, supplies, and the cost of operating and maintaining 
equipment, among other things.\166\
---------------------------------------------------------------------------
    \164\ U.S. Department of the Treasury, Coronavirus Economic Relief 
for Transportation Services (CERTS) Program, available at https://
home.treasury.gov/policy-issues/coronavirus/assistance-for-american-
industry/coronavirus-economic-relief-for-transportation-services.
    \165\ Id., and Guidelines for the Coronavirus Economic Relief for 
Transportation Services (CERTS) Grant Program (May 6, 2021), available 
at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-
american-industry/coronavirus-economic-relief-for-transportation-
services.
    \166\ U.S. Department of the Treasury, Coronavirus Economic Relief 
for Transportation Services (CERTS) Program and Guidelines for the 
Coronavirus Economic Relief for Transportation Services (CERTS) Grant 
Program (May 6, 2021), available at https://home.treasury.gov/policy-
issues/coronavirus/assistance-for-american-industry/coronavirus-
economic-relief-for-transportation-services. According to the CERTS 
guidelines Treasury published on May 6, 2021, to be eligible for 
payments under this program, companies must be established or organized 
in the United States or pursuant to federal law and must have a 
majority of employees in the United States, among other things. 
Further, passenger vessel companies must carry out their principal 
business using one or more passenger vessels of the United States (as 
each is defined in 46 USC Sec.  2101) that (a) are for hire with a 
capacity of 6 to 2,400 passengers and (b) have U.S. Coast Guard (USCG) 
issued Certificates of Inspection (COI).
---------------------------------------------------------------------------
    These federal relief efforts have been critical to the 
nation's economic and public health recovery from COVID-19. 
They helped to get needed supplies to states and local 
governments and financial relief to transportation workers and 
U.S. businesses impacted by the pandemic. However, the federal 
oversight community has identified various instances of abuse 
by individual recipients of these funds and areas where federal 
agencies can improve their oversight of the government's 
pandemic relief and response efforts. The hearing will provide 
an opportunity for Members to discuss both the oversight of the 
government's COVID-19 relief efforts and the impact of those 
actions on the transportation industry and its workers.

                         WITNESS LIST--Panel I

     LThe Honorable Michael E. Horowitz, Chair, 
Pandemic Response Accountability Committee
     LMs. Heather Krause, Director, Physical 
Infrastructure Issues, Government Accountability Office
     LMr. Chris Currie, Director, Homeland Security and 
Justice Issues, Government Accountability Office
     LThe Honorable Eric J. Soskin, Inspector General, 
Department of Transportation
     LMr. James Izzard, Assistant Inspector General for 
Investigations, Department of Homeland Security

                         WITNESS LIST--Panel II

     LMr. Paul Skoutelas, President & CEO, American 
Public Transportation Association (APTA)
     LMr. Juan Ortiz, Director of Homeland Security and 
Emergency Management, City of Austin, Texas--on behalf of the 
International Association of Emergency Managers (IAEM)
     LDr. Michael J. Boskin, T.M. Friedman Professor of 
Economics and Senior Fellow, Hoover Institution, Stanford 
University
     LDr. Wendy Edelberg, PhD, Director, The Hamilton 
Project, The Brookings Institution
     LMr. John Samuelsen, Transport Workers Union of 
America (TWU)
    Mr. DeFazio. I call the Committee on Transportation and 
Infrastructure to order.
    As I did yesterday, during yesterday's markup, I am reading 
an announcement from the Office of the Attending Physician.
    The physician has once again imposed a requirement that 
Members, staff, and all others physically present in an 
enclosed House of Representatives-controlled space--i.e., this 
room and others like it--and the floor of the House will be 
required to wear masks, unless speaking.
    I view this as a safety issue, therefore an important 
matter of order and decorum. I assert my responsibility to 
preserve order and decorum with respect to the wearing of 
masks. The chair would greatly prefer that all present simply 
uphold the decorum of the committee by complying with 
reasonable safety standards recommended by the Attending 
Physician, and respectful of all the occupants of the room.
    With that, the committee will come to order.
    I ask unanimous consent that chair be authorized to declare 
recess at any time during today's hearing.
    Without objection, so ordered.
    As a reminder, please keep your microphone muted while 
speaking, blah blah blah. If you make noise, I will shout at 
you.
    To insert a document into the record, please email it to 
[email protected].
    With that I would go to my opening statement, which I put 
somewhere. Oh, who took it? Yes, here we go, OK.
    Today we will hear about the impact the Government's COVID-
19 relief funding has had on the transportation sector and its 
workers who were heavily hit. Many transportation workers died. 
Many, many more became ill. But they kept the trains, the 
planes, and the buses running during this, and the light rail, 
anything that is related to transportation. And obviously, 
ridership went down. But they provided essential transportation 
to many, many critical workers during that time. And the 
economy would have been way worse off without their incredible 
sacrifice.
    So today we are here to look at the Government's response, 
and see that these Federal funds have been utilized efficiently 
and effectively. The pandemic, obviously, has had a huge and 
ongoing impact, and Congress took unprecedented steps to deal 
with that.
    The Federal oversight community, which will be our first 
panel, has been tracking this economic aid to determine if it 
has been used appropriately and to identify ways to ensure it 
is used as productively as possible. The oversight--I forgot I 
can take my mask off while I am talking--the oversight 
community has also worked to identify weaknesses in agencies' 
management of COVID-19 relief programs and to ferret out 
individual cases of fraud, which, in this sector, are quite 
rare, not so much in the Paycheck Protection Program or 
unemployment programs, but in this it was rare, relatively 
rare.
    Our hearing today will examine both these issues: oversight 
of the funds and the impact of the aid on the industry's 
stakeholders. There are always going to be individual bad 
actors attempting to defraud or financially abuse a program or 
take advantage of a crisis. And some programs may have had poor 
management or ineffective leadership. And that is what we want 
to hear: the oversight community can identify loopholes, or how 
people might have been enabled to commit fraud, and make 
recommendations to improve the management of those programs.
    In some cases, Federal agencies, many that are outside our 
committee's jurisdiction, have not moved quickly enough to 
close these oversight gaps, and to learn the lessons from past 
national emergencies. GAO, for instance, has issued 87 COVID-
19-related recommendations since the pandemic began, and only 
16 have been fully implemented.
    Despite these issues, the economic relief was necessary. 
Governors, mayors, local officials, labor organizations, and 
business associations, have all applauded the support Congress 
provided through legislation. It helped to slow the spread of 
the virus, thwart the loss of American jobs, and bolster the 
economic security of the U.S. and small businesses.
    Unfortunately, we may never know how successful these 
efforts were, because Government agencies failed to track the 
number of jobs that were saved. I look forward to hearing from 
our Government witnesses about how to increase transparency on 
this front, hopefully retrospectively, but certainly in the 
future. This won't be our last national crisis. Who knows what 
the next one will be?
    I also look forward to hearing ideas to enhance 
accountability, improve Federal crisis planning and emergency 
management programs, and strengthen transparency of Government 
expenditures. While I believe the COVID-19 relief funding was 
absolutely critical in addressing the dire economic situation 
and public health catastrophe, I also commend the oversight 
community for identifying problems, highlighting cases of 
ineffective management, and spotting cases of waste, fraud, and 
abuse to improve the management of Federal programs to help 
Americans impacted by COVID.
    There are several questions I hope will be addressed by the 
panel: What recommendations do you have to help the 
Government's coordinated response to national public health and 
other emergencies, particularly for the Federal Emergency 
Management Agency?
    I would note that we are not touching on aviation today, 
but the Department of Transportation was ordered, under the 
Obama administration, to develop an emergency response plan to 
deal with pandemics. We are still waiting.
    And secondly, how can we improve reporting and transparency 
related to the use of Federal disaster assistance funds?
    How can we learn from the Federal oversight community's 
identification of problems in the Federal response to the 
COVID-19 pandemic to improve the response during the next 
national crisis?
    And from the standpoint of transportation stakeholders, our 
second panel, what worked well, in terms of the Government 
response to helping them confront the crisis, and how can we 
help support transportation workers and the critical 
transportation infrastructure we all depend upon in order to 
mitigate the impact of future national public health 
emergencies?
    Thanks to all of you for being here today, and I yield to 
the ranking member for his opening statement.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
      Congress from the State of Oregon, and Chair, Committee on 
                   Transportation and Infrastructure
    Today we will hear about the impact the government's COVID-19 
relief funding has had on the transportation sector and its workers, 
and the challenges in overseeing the government's response efforts and 
ensuring that these federal funds are managed efficiently and 
effectively.
    The onslaught of the COVID-19 pandemic has had devastating 
consequences for our nation and the world. In the United States it has 
infected more than 34 million Americans and resulted in the deaths of 
more than 600,000 individuals. The federal government was called upon 
to respond to this public health crisis in a way that was unprecedented 
on a national scale for such a prolonged period of time, and it 
continues to do this work on a daily basis across our country.
    The pandemic also wreaked havoc on our economy, decimating the 
financial livelihood of many American workers and businesses, 
particularly in the transportation sector. Congress took unprecedented 
actions to help cushion the economic blow to workers, families, and 
small businesses.
    The federal oversight community has been tracking this economic aid 
to determine if it has been used appropriately and to identify ways to 
ensure it is used as productively as possible. The oversight community 
has also worked to identify weaknesses in agencies' management of 
COVID-19 relief programs and to ferret out individual cases of fraud. 
Our hearing today will examine both of these issues: the oversight of 
these funds by federal Offices of Inspectors General and the U.S. 
Government Accountability Office and the impact of this aid to 
transportation industry stakeholders.
    Challenges do exist. There will always be individual bad actors 
seeking to defraud or financially abuse a program or federal agency 
whose mission is to serve the public and the nation. Some programs may 
also be impeded by poor management and ineffective leadership. The 
oversight community has been keeping tabs on these funds, identifying 
these fraudsters, and making recommendations to improve the management 
of federal COVID-19 relief actions and programs.
    But in some cases, federal agencies, many outside our committee's 
jurisdiction, have not moved quickly enough to close these oversight 
gaps and to learn the lessons from past national emergencies. The 
Government Accountability Office, for instance, has issued 87 COVID-19 
related recommendations since the pandemic began and only 16 of those 
have been fully implemented.
    Despite these issues, COVID-19 economic relief was necessary. 
Governors, mayors and local officials, labor organizations and business 
associations have all applauded the support Congress provided through 
legislation that helped to slow the spread of the COVID-19 virus, 
thwarted the loss of American jobs, and bolstered the economic security 
of U.S. small businesses. Unfortunately, we may not know how successful 
these relief efforts were because government agencies failed to track 
the number of jobs that were saved. I look forward to hearing from our 
government witnesses about how to increase transparency on this front. 
I also look forward to hearing ideas to enhance accountability, improve 
federal crisis planning and emergency management programs, and 
strengthen transparency of government expenditures in the future.
    While I believe the COVID-19 relief funding was absolutely critical 
to addressing the dire economic situation and the public health 
catastrophe, I also commend the oversight community for identifying 
problems, highlighting cases of ineffective management and spotting 
cases of waste, fraud and abuse to improve the management of federal 
programs to help Americans impacted by the COVID-19 pandemic.
    There are several questions I hope our panelists will help us 
understand today.
      What recommendations does the oversight community have to 
helping improve the government's coordinated response to national 
public health and other emergencies, particularly for the Federal 
Emergency Management Agency (FEMA)?
      How can we improve reporting and transparency related to 
the use of federal disaster assistance funds?
      How can we learn from the federal oversight community's 
identification of problems in the federal response to the COVID-19 
pandemic to improve the response during the next national crisis?
      From the standpoint of transportation stakeholders, what 
worked well in terms of the government's response to helping them 
confront this crisis and how can we help support transportation workers 
and the critical transportation infrastructure we all depend upon in 
order to mitigate the impact of future national public health 
emergencies?

    Thank you to all of our witnesses for being here today. I look 
forward to your testimony. With that I yield to Ranking Member Graves 
for his opening statement.

    Mr. Graves of Missouri. Thank you, Mr. Chairman.
    Since the beginning of the pandemic, the Government has 
spent $5.9 trillion on combating COVID-19; $1.9 trillion has 
been authorized by Congress just this year. Some of this money 
was legitimately needed to help us respond and recover from a 
once-in-a-lifetime pandemic. With it, we were able to do things 
like Operation Warp Speed, distribute personal protective 
equipment, or PPE, set up medical clinics, and provide 
transportation for essential workers. I am glad today's hearing 
is going to focus on oversight and look at how these funds have 
been used or potentially misused.
    Unfortunately, a lot of recent funding has been masqueraded 
as pandemic-related relief. For example, more than $1 billion 
for Amtrak, school funds for critical race theory, and loads of 
extraneous green projects. And now the majority wants to add 
another $3.5 trillion to the tab through its ``human 
infrastructure'' bill, which will be jammed through using the 
partisan budget reconciliation process. This would be the 
highest level of funding for any legislative measure in the 
history of our country, costing the American taxpayers about 
$50,000 per U.S. household.
    We cannot just casually throw around trillion-dollar 
figures like we are playing with Monopoly money. We have to 
consider where these astronomical amounts of money are coming 
from. Unfortunately, it is going to come from the pockets of 
the taxpayers, and the pockets of future taxpayers who haven't 
even been born yet. The effects of this cumulative, unchecked 
spending are real, and we are seeing it every day. The price of 
consumer goods has gone up nearly across the board. Gasoline is 
up 56 percent, airlines are up, our airfares are up 24 percent. 
Used cars are up 30 percent from last year. And even the cost 
of chicken wings has increased more than 58 percent.
    Let's not forget, we still don't know how this virus 
started, despite its high cost. More than 600,000 U.S. lives 
have been lost, and we are still paying the economic toll of 
recovery.
    I look forward to hearing from today's panels on how this 
spending is impacting our economy, and how it is impacting 
jobs, and whether or not Congress was as targeted as we ought 
to have been when spending such large sums of money.
    With that, Mr. Chairman, I am looking forward to hearing 
from our witnesses, and I do appreciate the hearing, and I 
yield back the balance of my time.
    [Mr. Graves of Missouri's prepared statement follows:]

                                 
  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chair DeFazio.
    Since the beginning of the pandemic, the government has spent $5.9 
trillion on combating COVID-19. $1.9 trillion has been authorized by 
Congress this year alone.
    Some of this money was legitimately needed to help us respond and 
recover from a once-in-a-lifetime pandemic. With it we were able to do 
things like Operation Warp Speed, distribute personal protective 
equipment (PPE), set up medical clinics, and provide transportation for 
essential workers.
    I am glad today's hearing will focus on oversight and look at how 
these funds have been used--and potentially misused.
    Unfortunately, a lot of recent funding has masqueraded as pandemic-
related relief. For example: more than $1 billion for Amtrak, school 
funds for critical race theory, and loads of extraneous green projects. 
And now the Majority wants to add another $3.5 trillion to the tab 
through its ``human infrastructure'' bill which will be jammed through 
using the partisan budget reconciliation process. This would be the 
highest level of funding for any legislative measure in our history--
costing the American taxpayers about $50,000 per U.S. household.
    We cannot casually throw around trillion-dollar figures now like 
we're playing with Monopoly money. We must consider where these 
astronomical amounts of money are actually coming from. Unfortunately, 
it'll come from the pockets of the taxpayers, and the pockets of future 
taxpayers who haven't even been born yet.
    The effects of this cumulative, unchecked spending are real. And 
we're seeing it every day. The price of consumer goods has gone up 
nearly across the board. For example, gasoline is up 56 percent, 
airfares are up 24 percent, used cars are up 30 percent from last year, 
and even the cost of chicken wings has increased by more than 58 
percent.
    And let's not forget that we still don't know how this virus 
started despite its high cost. More than 600,000 U.S. lives were lost 
and we're still paying the economic toll of recovery.
    I look forward to hearing from today's panels on how this spending 
is impacting our economy, jobs, and whether or not Congress was as 
targeted as we ought to have been when spending such huge sums of 
money.

    Mr. DeFazio. I thank the gentleman for his brevity. I will 
now turn to our witnesses.
    We will be hearing testimony from witnesses, two panels, 
with each panel followed by questions from Members.
    I would now like to welcome witnesses on our first panel: 
the Honorable Michael E. Horowitz, Chair, Pandemic Response 
Accountability Committee; Ms. Heather Krause, Director of 
Physical Infrastructure, Government Accountability Office; Mr. 
Chris Currie, Director of Homeland Security and Justice, 
Government Accountability Office; the Honorable Eric J. Soskin, 
inspector general, Department of Transportation; and Mr. James 
Izzard, assistant inspector general for investigations, 
Department of Homeland Security.
    Thanks for joining us today. I look forward to your 
questions.
    Without objection, the full statements will be included in 
the record.
    Since your written statement has been made a part of the 
record, the committee requests that you extract the most 
relevant points, and restrict yourself to 5 minutes.
    With that, Chairman Horowitz, you are recognized for 5 
minutes.

TESTIMONY OF HON. MICHAEL E. HOROWITZ, CHAIR, PANDEMIC RESPONSE 
 ACCOUNTABILITY COMMITTEE; HEATHER KRAUSE, DIRECTOR, PHYSICAL 
INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; CHRIS P. 
     CURRIE, DIRECTOR, HOMELAND SECURITY AND JUSTICE, U.S. 
    GOVERNMENT ACCOUNTABILITY OFFICE; HON. ERIC J. SOSKIN, 
INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; AND JAMES 
 IZZARD, Jr., ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Horowitz. Thank you, Mr. Chairman and Ranking Member 
Graves, and members of the committee. Thank you for inviting me 
to testify at today's important hearing.
    Congress created the Pandemic Response Accountability 
Committee, or PRAC, which is comprised of 22 Federal inspectors 
general, to oversee the more than $5 trillion in Federal 
pandemic relief spending. And I am proud to report on our 
accomplishments to date at today's hearing.
    PRAC's mission is to work with IGs to help ensure that 
taxpayer money is used effectively and efficiently, and to 
address the pandemic-related public health and economic needs 
that the Congress funded, as well as to root out waste, fraud, 
abuse, and misconduct. Oversight of a program of this magnitude 
takes a monumental and whole-of-Government effort. Our efforts 
at the PRAC have focused on three pillars: transparency, 
coordinated oversight, and accountability.
    In order to foster transparency and enable the public to 
know how its money is being spent, the PRAC established a 
website, PandemicOversight.gov, and I hope people will go and 
look at the website. We continually update it with new datasets 
and spending data, and develop new features to enhance it as a 
tool for the public.
    For example, just this month we updated our data 
visualizations on the Paycheck Protection Program, and for the 
first time were able to incorporate loan forgiveness data.
    The website also contains accountability information, 
including audit and inspection reports from Federal IGs, as 
well as from the Government Accountability Office.
    We also track recommendations that IGs have made to 
agencies to help improve the operations of Government programs 
related to the pandemic.
    I am particularly pleased to report that, as a result of 
the PRAC's outreach efforts to our State and local oversight 
partners, PandemicOversight.gov now includes reports from 
State, county, and city auditors overseeing pandemic response 
funds. The website contains over 125 reports so far. These 
oversight entities--and there will be more to come--involving 
unemployment insurance, use of coronavirus relief funds, 
pandemic preparedness, contract tracing, and more.
    With regard to our accountability efforts, the PRAC and 
Federal IGs have been performing rigorous, independent 
oversight for 16 months now. To date, these efforts have 
resulted in the issuance of about 250 oversight reports related 
to pandemic spending, and the Government's response to the 
pandemic.
    In addition, the PRAC issued an agile products toolkit to 
assist with oversight efforts, and has held a series of public 
forums and programs to inform the public about our oversight 
efforts.
    And just this month, the PRAC announced the creation of a 
new working group focused on preventing and addressing identity 
fraud in pandemic response programs. The PRAC Identity Fraud 
Reduction and Redress Working Group seeks to help reduce 
identity fraud in Government programs, and very importantly, 
assist victims in recovering from what can be devastating 
impacts from identity fraud.
    Additionally, the PRAC and the IG community is committed to 
bringing to justice those who, unfortunately, seek to defraud 
and steal from pandemic programs. Earlier this year the PRAC 
established a Pandemic Fraud Working Group, comprised of law 
enforcement agents from across the IG community. And the work 
of IG agents has resulted in hundreds of arrests and 
prosecutions to date, and we have many more ongoing, open, and 
significant investigations.
    We are using all of the tools that Congress has given us, 
civil and criminal authorities, and suspension and debarment, 
among others, to prevent and detect wrongdoing. One of the most 
important tools that has enabled us to effectively identify and 
prevent misconduct is data analytics. That is why the PRAC is 
excited about the development of our Pandemic Analytics Center 
of Excellence, or PACE, and I look forward to talk about this 
at today's hearing.
    The PACE will allow the IG community to conduct data 
analysis and visualization of all pandemic response funds, 
provide fraud-fighting tools to the IG community, enable the 
broad sharing of data and leading practices among IGs, and 
assist investigations and audits with expanded data for open 
source investigative intelligence.
    In the coming months, I look forward to providing even more 
information about the PACE, as we continue to build what 
promises to be one of the more important tools in helping IGs 
root out fraud, waste, abuse, and protect taxpayer money.
    Thank you again for your continued strong support of the IG 
community. The extraordinary team at the PRAC and the entire IG 
community is committed to advancing transparency and 
accountability through our independent oversight efforts.
    That concludes my remarks, and I would be pleased to answer 
any questions the committee may have.
    [Mr. Horowitz's prepared statement follows:]

                                 
    Prepared Statement of Hon. Michael E. Horowitz, Chair, Pandemic 
                   Response Accountability Committee
    Mr. Chairman, Ranking Member Graves, and Members of the Committee:
    Thank you for inviting me to testify today to discuss the work of 
the Pandemic Response Accountability Committee (PRAC), which was 
created as part of the Coronavirus Aid, Relief, and Economic Security 
Act (CARES Act) in March 2020. In addition to serving as the Inspector 
General of the Department of Justice since 2012, for the past 15 
months, I have served as acting Chair and permanent chair of the PRAC.
    The PRAC is a Committee of the Council of the Inspectors General on 
Integrity and Efficiency (CIGIE) and is comprised of 22 federal 
Inspectors General (IGs) who are working collaboratively to oversee the 
more than $5 trillion in federal pandemic-relief emergency spending. 
Our primary mission at the PRAC is to work with Offices of the 
Inspector General (OIG) to ensure that taxpayer money is used 
effectively and efficiently to address the pandemic-related public 
health and economic needs that were funded through the various COVID-19 
relief bills. My testimony today will focus on the PRAC's role in 
coordinating oversight of the pandemic response, and what lessons we 
have learned thus far.
    To put it in perspective, the more than $5 trillion in relief 
provided to address the pandemic and its health and economic impact to 
Americans is more than the federal government's total spending in 2019 
for all discretionary, mandatory, and interest on the debt. Oversight 
of a program of this magnitude takes a monumental and whole-of-
government effort. The speed at which funds were disbursed last year, 
and the sheer amount of money involved, put the funds at high risk of 
fraud and misuse, making the work of oversight entities like the PRAC 
and IGs essential to a successful national recovery.
    The PRAC was established to serve the American public by promoting 
transparency and facilitating coordinated oversight of the Federal 
Government's COVID-19 pandemic response and associated spending with 
the goal to identify major risks that cross program and agency 
boundaries, and to assist agencies in preventing and detecting fraud, 
waste, abuse, and mismanagement. We also seek to provide the public 
with accessible, timely, accurate, and comprehensive data about the 
over $5 trillion in COVID-19 relief spending. To date, the 22 PRAC IGs, 
as well as other IGs whose agencies received emergency pandemic 
funding, have issued 250 oversight reports related to pandemic spending 
and the government's response to the pandemic. Recognizing the need to 
provide policymakers with timely insights into pandemic relief 
spending, the IGs have issued many agile oversight products, including 
inspections conducted remotely, flash reports, agency program funding 
snapshots, management alerts, and white papers. These reports have 
included specific reviews of the Department of Transportation and 
Department of Homeland Security, which are covered in detail in 
Inspector General Soskin and Assistant Inspector General for 
Investigation Izzard's remarks.
                          PRAC's Work to Date
    In response to the COVID-19 outbreak, Congress authorized historic 
levels of emergency funding for federal agencies to provide relief to 
individuals, businesses, state and local governments, and public 
services. Since last March, the PRAC has worked with member IGs to 
conduct oversight that seeks to identify programmatic and systemic 
risks, and to develop recommendations for program improvements, refer 
matters for criminal and civil investigations, and identify misspent 
covered funds for recovery. I will briefly mention a few examples of 
the PRAC's work over the past year to fulfill this mission and its 
plans for the future.
Promoting Transparency through PandemicOversight.gov
    The PRAC fosters greater transparency of the government's pandemic-
related spending through our robust, publicly accessible website, 
PandemicOversight.gov. The website includes important information about 
the PRAC and makes publicly available a wide range of data related to 
how emergency pandemic funds have been spent. For example, the website 
includes pandemic spending data from USASpending.gov, Paycheck 
Protection Program (PPP) data from the Small Business Administration 
(SBA), and an updated list of all ongoing work from member IGs related 
to the pandemic. In addition, our website provides direct access to 
recipient and sub-recipient level reporting and the expenditures made 
using Coronavirus Relief Funds. Our website is currently the only place 
where this data is available to the public.
    We are continuing to update PandemicOversight.gov with additional 
datasets and have been designing and developing new content and 
features that further enhance the site's effectiveness as a 
transparency tool for the public, Congress, and other key stakeholders. 
In May, we provided updated Coronavirus Relief Fund data to includes 
all funds spent from March 1, 2020 through March 31, 2021. In June, we 
incorporated Provider Relief Fund data from hospitals and healthcare 
providers that we obtained from the U.S. Department of Health and Human 
Services into our website. Most recently, in July, we updated our data 
visualizations on the Paycheck Protection Program and for the first 
time incorporated loan forgiveness data.
    The website also contains accountability information, including 
findings from OIGs, such as completed audits and inspections, as well 
as Government Accountability Office (GAO) reports. We also track 
recommendations that IGs have made to agencies to help them improve the 
operations of government programs related to the pandemic.
    I am particularly pleased to report that, as a result of the PRAC's 
outreach effort to our oversight partners at the state and local 
levels, PandemicOversight.gov also now includes reports from state, 
county, and city auditors overseeing pandemic response funds. The 
website contains over 125 reports [https://www.
pandemicoversight.gov/oversight/reports?f%5B0%5D=report_type_taxonomy
%3A123] on unemployment insurance, use of Coronavirus Relief Funds, 
pandemic preparedness, contact tracing, and more. The reports can be 
found alongside the PRAC's pandemic oversight reports by federal 
auditors. A searchable database of state and local reports allows 
policy makers and the public to better understand pandemic response 
oversight at all levels and helps federal oversight agencies, like the 
PRAC, better monitor and protect the $5 trillion in pandemic relief 
distributed across the United States. For example, a report issued by 
the California State Auditor in August 2020 designated the management 
of Federal pandemic response funds as high risk for the state, stating 
that California must be able to properly account for and report on the 
use of funds; specifically, the report stated that California must 
effectively track and justify the costs of its COVID-19-related 
emergency protective measures to ensure that it maximizes the 
reimbursement that FEMA will provide. The California State Auditor 
further noted that mismanagement of COVID-19 funds could result in 
serious detriment to the state and its residents. In another example, 
work completed by the New York Comptroller's Office (which includes the 
state's audit function) provided a data snapshot of the impact of the 
pandemic on subway ridership as well as the impact of the pandemic on 
the Metropolitan Transit Authority's debt profile and highlighting that 
ridership levels will likely not reach pre-pandemic levels until 
sometime in 2021. These reports highlight the need for proper 
management of funds, as well as provide key insights and information 
about the impact of the pandemic on the ground.
    We also have worked closely with GAO and its leadership to ensure 
that federal oversight efforts are well coordinated and seamless. The 
outstanding reports issued by GAO have been an integral part of the 
federal oversight effort and we look forward to continuing to partner 
with GAO, as well as our state and local oversight colleagues, as we 
conduct our independent oversight efforts on behalf of the taxpayers.
Work on Cross-Cutting Issues that Transcend Federal Agencies
    In February 2021, the PRAC issued a ``Top Challenges in Pandemic 
Relief and Response'' report [https://www.oversight.gov/sites/default/
files/oig-reports/PRAC/PRAC-Update-Top-Challenges-Pandemic-Relief-and-
Response.pdf], which updated a similar June 2020 report [https://
www.oversight.gov/sites/default/files/oig-reports/
Top%20Challenges%20Facing%20Federal%20Agencies%20-%20COVID-
19%20Emergency%20Relief%20and%20Response%20Efforts_1.pdf] by the PRAC, 
and highlighted the major management challenges facing federal agencies 
during the pandemic. The PRAC report also identified cross-cutting 
issues for policymakers to consider as they implement the relief 
funding in the American Rescue Plan. Three of these challenges 
particularly incorporate elements related to this Committee's 
jurisdiction:
    1. Financial Management of Relief Funding. Even in non-pandemic 
times, financial management controls and proper oversight of government 
contracts pose a challenge to federal agencies and programs. The 
substantial increase in funding for certain programs and an expedited 
timetable for the distribution of CARES Act and other pandemic-related 
funds heightens the risks. Since the pandemic began in March 2020, OIGs 
have found that payments have been made without the appropriate checks 
and controls in place to verify the expenditures. A soon to be issued 
PRAC report found that noncompetitively awarded contracts increase the 
risk of higher prices and decreased contractor performance and may 
require additional oversight. In addition, OIGs have identified 
contracts that pose potential conflicts of interest and contractors 
that have not delivered products by the specified due dates. Further, 
federal agencies may face challenges maintaining their agency 
operations and programming, especially those supported by contracts if 
the contractors are unable to fulfill existing requirements due to 
COVID-19 restrictions. As the pandemic continues, federal agencies must 
continue to ensure they get what they pay for in their pandemic 
response-related contracts as well as guard against fraud and improper 
payments.
    2. Informing and Protecting the Public from Pandemic-Related Fraud. 
PRAC member OIGs have also found that Americans are being targeted in 
greater numbers by dishonest people taking advantage of the crisis to 
harm individuals and businesses through scams and harassment. Identity 
theft is on the rise and three pandemic-related benefit programs have 
been particularly hard hit: the Department of Labor's unemployment 
insurance (UI) program and the Small Business Administration's Economic 
Injury Disaster Loan (EIDL) program and Paycheck Protection Program 
(PPP). According to the Federal Trade Commission, identity thieves 
targeted pandemic unemployment insurance in record numbers, with over 
394,000 people reporting that their personal information was misused to 
apply for a government benefit--an increase of nearly 3,000% from 
2019.\1\
---------------------------------------------------------------------------
    \1\ Federal Trade Commission's Staff Report, Protecting Consumers 
During the COVID-19 Pandemic: A Year in Review (April 2021).
---------------------------------------------------------------------------
    In July, the PRAC announced formation of a new working group 
focused on preventing and addressing identity fraud in pandemic 
response programs. The PRAC Identity Fraud Reduction & Redress Working 
Group is a joint effort of multiple Inspectors General who are members 
of the PRAC. The Working Group is taking a holistic approach in seeking 
to help reduce identity fraud in government programs and assist victims 
in recovering from what can be devastating impacts from identity fraud. 
As an oversight community, we have identified several internal controls 
that can prevent identity fraud in federal programs to avoid the scale 
of fraud that took place in 2020.
    To educate the public about what watchdogs at all levels of 
government--federal, state, and local--have found in their work related 
to identity theft in pandemic relief programs, the PRAC has added an 
interactive timeline [https://www.pandemicoversight.gov/our-mission/
identity-theft-in-pandemic-benefits-programs] to our website. The 
timeline takes a user through the oversight community's audit and 
investigative efforts to protect pandemic relief funds.
    3. Report on Data Gaps. A third challenge we identified concerns 
data transparency and completeness. A study commissioned by the PRAC 
with MITRE [https://www.pandemicoversight.gov/our-mission/publications-
reports/gaps-in-cares-act-and-how-to-close-them] identified key gaps in 
data sources and opportunities to close those gaps. The PRAC is 
actively reviewing federal data sets to identify areas where high 
impact programs contain reporting gaps that could affect the ability of 
agencies, OIGs, and the PRAC to properly oversee their use of pandemic 
response funds. We have been working with OMB, the Chief Financial 
Officers Council, OIGs and agencies on these gaps and are working to 
improve data quality and transparency.
    An important result from these recent discussions was OMB 
Memorandum M-21-20 [https://www.whitehouse.gov/wp-content/uploads/2021/
03/M_21_20.pdf], Promoting Public Trust in the Federal Government 
through Effective Implementation of the American Rescue Plan Act and 
Stewardship of the Taxpayer Resources, issued on March 19, 2021. This 
guidance addresses some of the concerns PRAC leadership and staff have 
been discussing with OMB since March 2020, particularly the need for 
detailed and accurate award descriptions, enhanced transparency of 
spending through use of disaster and emergency funding codes, and 
working with the PRAC and IGs to strengthen payment integrity. The 
guidance specifically mentions the Administration's commitment to 
working with the PRAC and agency IGs to strengthen payment integrity in 
order to minimize the risk of waste, fraud, and abuse. Additionally, 
the guidance notes that ``OMB anticipates continued collaboration with 
the PRAC to include joint communications on issues related to ARP 
relief that will raise awareness on specific challenges and 
opportunities for payment integrity.''
    We continue to work with partner IGs, OMB, and the American Rescue 
Plan implementation team to address program level data gaps and 
opportunities to promote public trust and enhance payment integrity. In 
April, we issued a Joint Alert with OMB [https://
www.pandemicoversight.gov/media/file/omb-and-prac-payment-integrity-
alert] on payment integrity. It is imperative that executive 
departments and agencies incorporate in program design, tracking, and 
reporting the lessons learned from previous rounds of COVID-19 
stimulus. OMB and the PRAC's joint alert identifies risk factors and 
mitigating strategies that agencies can consider when assessing impact 
to their respective programs. And just last week we issued a second 
Joint Alert [https://www.pandemicoversight.gov/news/articles/joint-
announcement-john-pasquantino-acting-omb-controller-and-michael-
horowitz-prac-0] with OMB, this one on the benefits of using automation 
and data analytics in reducing the risk of improper payments of 
government funds.
Coordinating Oversight Across the PRAC IGs
    To facilitate coordination and collaboration between the PRAC and 
its member IGs, as well as with the GAO and state and local oversight 
entities, the PRAC has established five subcommittees and four issue 
groups for healthcare, financial institutions, data sharing, and 
identity fraud--chaired by PRAC members--to share ongoing oversight and 
accountability efforts, best practices, and lessons learned. These 
efforts include:
      ongoing reviews of multi-dipping, or recipients of 
pandemic funds using multiples sources of funds for the same purpose,
      a PPP working group that is discussing outcomes related 
from oversight and inspections of PPP fraud and misuse, and
      sharing of data analytics and data across the pandemic 
response community to create a more cohesive response to pandemic 
oversight,
      GAO, state and local coordination with the federal 
community on high risks and areas of concern.

    Specifically on state and local coordination, we regularly 
interface with state and local auditors [https://
www.pandemicoversight.gov/media/file/statelocal-infographic] to keep 
the lines of communication open to federal offices. We created a series 
of monthly listening posts to discuss challenges that are faced by 
federal, state, and local audit program, and fiscal partners in their 
oversight of CARES Act funds, such as challenges completing Single 
Audit Act requirements, fraud risks associated with the unemployment 
programs, and sharing reports or methodologies used for similar 
oversight activities, and to help find solutions to these problems. 
Attendees include PRAC member OIGs, GAO, the National Association of 
State Auditors, Comptrollers and Treasurers, the Association of Local 
Government Auditors, and entities responsible for Tribal oversight.
    We also have conducted new coordination efforts with state and 
local oversight offices for pandemic-related hotlines and 
investigations so that states can provide the PRAC, or the applicable 
federal agency, with hotline information outside of their purview or 
applicable to a federal pandemic response program. Additionally, the 
PRAC has initiated quarterly briefings to share investigative best 
practices or fraud indicators identified by federal investigators that 
would benefit state and local investigators and auditors.
    The PRAC Audit Subcommittee issued the Agile Products Toolkit 
[https://
www.pandemicoversight.gov/sites/default/files/2020-11/
Agile%20Products%20
Toolkit_0.pdf] to assist members in providing expeditious oversight of 
federal response in a crisis like the pandemic. The PRAC Healthcare 
issue group released a report on COVID-19 testing, a risk area the 
group identified [https://www.oversight.gov/sites/default/files/oig-
reports/PRAC/Federal-COVID-19-Testing-Report.pdf] that cuts across 
agencies, and collaborated to create a data brief on COVID-19 testing 
administered between February 2020 and August 2020 in six select 
federal health care programs. This report highlights critical areas for 
policymakers to consider to improve testing for Americans, including 
availability, accessibility, and cost effectiveness of tests. The PRAC 
Financial Institutions issue group brought together expert stakeholders 
to gather their insights concerning the Federal government's pandemic 
response efforts in small business and housing relief programs. The 
group released a series of videos highlighting those perspectives of 
lenders [https://www.pandemicoversight.gov/news/pandemic-response-
perspectives-from-banking-industry], small business and borrowers 
[https://www.pandemicoversight.gov/news/pandemic-response-perspectives-
from-borrowers], and housing stakeholders [https://
www.pandemicoversight.gov/news/pandemic-response-housing-insights].
    To help assess the impact of CARES Act funding, as well as discuss 
lessons learned, we held a virtual forum on March 25, 2021--CARES Act 
One Year Later: Oversight of America's Investment in Pandemic Response 
[https://www.pandemicoversight.gov/news/events/cares-act-one-year-
later]. The event was attended live by 550 participants and featured 
prerecorded remarks from Sen. Gary Peters, Rep. Carolyn Maloney, Rep. 
James Comer, and Rep. Jim Clyburn. To share these insights widely with 
the public, the PRAC posted the event video on PandemicOversight.gov 
and our YouTube channel. In August, we will host a virtual roundtable 
webinar to discuss the impact of pandemic spending on underserved 
communities, whether the funds reached those they were intended to 
help, and what changes may be needed in connection with future disaster 
relief efforts.
    Meanwhile, OIGs and our law enforcement partners at the Department 
of Justice and elsewhere have been aggressively pursuing fraud cases. 
The investigative workload for a number of PRAC IGs has been 
substantial and, regrettably, continues to grow. The PRAC is working to 
assist these IGs, including through the PRAC's pandemic fraud task 
force, which I discuss below. Those who engage in fraud and other 
wrongdoing in connection with pandemic-related programs will be held 
accountable, and we hope that these efforts will have the necessary and 
important deterrent effect.
    To date, there have been 900 defendants publicly charged with 
criminal offenses based on fraud schemes connected to the COVID-19 
pandemic. The first civil settlement to resolve allegations of fraud 
against the Paycheck Protection Program (PPP) occurred on January 12, 
2021 in the Eastern District of California. Additionally, regulatory 
agencies like the Food and Drug Administration, have issued 7 civil 
injunctions and restraining orders against companies and individuals 
who are falsely claiming to have treatments or cures for the 
coronavirus.
    The Offices of Inspectors General are actively engaged in combating 
this criminal behavior and have led or participated in investigations 
leading to over 481 indictments or complaints, 436 arrests, and 131 
convictions thus far. PPP and EIDL fraud continue to trend as the 
largest number of publicly announced investigations, followed by 
Unemployment Insurance fraud, and investigations related to testing 
supplies/treatments/vaccines.
    The PRAC is also continuing to track scam and fraud alerts issued 
by our member agencies, to ensure the broadest dissemination on our 
website and social media platforms. Most recently, the PRAC worked with 
HHS OIG to publish an alert on the vaccine scams that have begun 
targeting the public.
Shared Services Support to OIGs
    The PRAC is seeking to use the resources and tools that Congress 
have given us to enhance shared services across the IG community, and 
to fill gaps to help our partners meet the challenge of overseeing this 
pandemic spending. For example, we are working with data science 
programs at leading academic institutions to recruit and hire data 
science fellows and build a talent pipeline for the OIG community. The 
PRAC is also providing resources to PRAC members to combat fraud in 
pandemic relief programs. The PRAC hosted an Educational Loan Fraud 
Forum on April 22, 2021, that highlighted activities in the oversight 
community related to loan fraud schemes. This allowed OIG investigators 
to hear from SBA OIG, FDIC OIG, and FHFA OIG about their experiences in 
pursuing PPP and EIDL cases; as well from the Department of Justice and 
the Special Inspector General for Pandemic Relief (SIGPR) related to 
their ongoing efforts in this area. Further, the PRAC Data Sharing 
workgroup coordinates regular meetings of OIGs to discuss data sharing 
opportunities to identify potential cross cutting initiatives, to share 
lessons learned from OIG data-related oversight work, and to consider 
ways to prevent and detect fraud, waste, and abuse using data 
analytics. For example, the workgroup organized a two-day Data Expo to 
share information among OIGs in terms of their data analytic 
capabilities, tools, and ongoing projects.
    Additionally, the PRAC Data Sharing workgroup held an International 
Data Forum with counterparts from the United Kingdom and Australia in 
early July. The event featured discussion of pandemic relief programs 
in each country, the challenges faced in overseeing those relief 
programs, and how innovative approaches to data sharing and analytics 
allowed officials to address those challenges.
    The PRAC also launched a hotline complaint site on its webpage 
(https://www.PandemicOversight.gov/contact/abouthotline) to enable 
whistleblowers and the public to report alleged wrongdoing related to 
federal pandemic programs without having to determine which OIG office 
has primary responsibility for a particular government program. All of 
the complaints made to the PRAC hotline are reviewed by staff and then 
forwarded to the appropriate OIG. As of July 20, 2021, the PRAC has 
received 1,787 complaints, and has made 1,363 referrals to OIGs (since 
some hotline complaints impact multiple programs and offices). 
Additionally, PRAC hotlines are provided to the PRAC Task Force for 
investigative follow-up where applicable.
                            PRAC Initiatives
    Having highlighted some of the work of the IG community and PRAC to 
date, let me briefly discuss some of the initiatives that the PRAC is 
currently undertaking or planning to initiate going forward.
Pandemic Analytics Center of Excellence
    We greatly appreciate Congress's continued support of the PRAC, 
including the $40 million provided in the American Rescue Plan Act of 
2021. Fulfilling the PRAC's mission of rooting out waste, fraud, and 
abuse in COVID response spending requires better technological tools, 
including the use of advanced data analytics that can be used to 
identify and stop fraudulent payments before they are made, to 
strengthen compliance and audit efforts, and detect fraud and support 
efforts to recover any ill-gotten gains. To that end, the PRAC is 
operating the Pandemic Analytics Center of Excellence (PACE) to: (1) 
conduct data analysis and visualization of all pandemic response funds; 
(2) provide fraud-fighting tools and central shared services to the IG 
community; (3) enable the broad sharing of data, analytics and leading 
practices across the oversight and law enforcement community; and (4) 
assist investigations and audits of pandemic relief programs with 
expanded data for open source investigative intelligence.
    The PACE is providing the enhanced capacity needed to ensure that 
pandemic response funds are used for their intended purpose, and not 
wasted or misused. The PACE is comprised of three primary functional 
capabilities (IT & Data Management; Analytics Visualization & 
Reporting; and Investigative Support) to execute and operate its 
mission:
      Analytic support tools include data matching, anomaly 
detection, risk modeling, social network analysis, robotic process 
automation, geospatial analysis, link analysis, business intelligence, 
and open-source intelligence. Currently, we are using robotic process 
automation to assist a member OIG to automate tasks associated with 
monitoring of pandemic spending that are currently manual reviews. This 
project will save critical time for both the OIG and the recipients 
that report spending information. In addition, we are assisting OIGs 
with development of risk models to help them identify high-risk 
recipients of pandemic funds for additional oversight. Our social 
network analysis assists in investigative work to uncover insights on 
networks of individuals who may have defrauded pandemic relief 
programs.
      Data science staff will utilize the tools to identify 
trends, patterns and anomalies and generally develop insights to detect 
and prevent potential or suspected fraud, waste, abuse and 
mismanagement of covered funds based upon best available data and 
analytic techniques. Currently, we have augmented the data science 
talent focused on pandemic relief in the oversight community with 12 
data science fellows placed at the PRAC and member OIGs.
      Development of capabilities necessary to identify, 
acquire, and curate data that can be used for pandemic oversight to 
allow for a flexible and adaptable cloud-based platform to analyze 
data. This should include capabilities to support data governance, data 
quality, data policies and standards, data inventory, and data 
security.
Cross-Cutting Oversight Work
    The PRAC has eight ongoing cross-cutting oversight projects. One of 
the projects is reviewing the spend rate data across five federal 
pandemic response programs that provided a large majority of their 
funds to states for expenditure, such as the Coronavirus Relief Fund. 
On another project, with member OIGs, we are identifying programs where 
multi-dipping has occurred, or there is a risk of it occurring. 
Additionally, we are examining COVID-19 contracting data from Fiscal 
Year 2020 where first-time federal contractors or limited competition 
was used. Further, with the Audit Subcommittee, the PRAC developed an 
acquisition and grant workforce data call to assess qualifications of 
personnel and resources provided, as required by Section 
15110(d)(1)(B)(vii-viii) of the CARES Act. The data call will go out to 
the acquisition and grant workforce in early Fiscal Year 2022. With 
MITRE, we are researching best practices and lessons learned from 
pandemic response in state unemployment insurance (UI) benefits 
programs. As I previously mentioned, the PRAC is reviewing the degree 
of transparency provided in publicly available award-level data for 
federal pandemic relief and assistance spending to provide Congress, 
policymakers, and the public with specific examples of gaps in 
reporting. We are also evaluating whether fraud controls that SBA 
applied in phase III of the Paycheck Protection Program (PPP) (and 
which we understand are being applied in the SBA's new Restaurant 
Revitalization Fund program) would have likely detected known fraud 
that occurred during last year's distribution of PPP funds. Finally, we 
are collaborating with member OIGs to conduct impact case studies at 
six different locations to identify the federal pandemic response funds 
provided to those locations, the purpose of those funds, and whether 
the federal program spending aligned with the intended goals and 
objectives. Access to information about the total amount of funds 
received, the purpose of those funds, and the progress made toward 
achieving the program goals and objectives is not always centralized 
and can be difficult for the public to track down or may not even be 
available to the public.
    In May, we also issued a report on COVID-19 in prisons and 
detention facilities pulling together insights and trends across 
multiple agencies and programs, presenting a comprehensive cross-agency 
view with Department of Justice OIG, Department of Homeland Security 
OIG, and Department of Interior OIG. This report is the first in a 
series of cross-agency reviews.
    Our staff is also working on deconfliction with OIGs and GAO, as 
well as the tracking of all work in the community to identify cross-
agency trends and patterns, as required by our authorization in the 
CARES Act 151109d)(1)(B)(i) through our strategic plan to ensure 
coordinated, efficient, and effective comprehensive oversight. Some 
examples of these efforts include the development of a systematic 
coordination and deconfliction tracker that is regularly updated, 
distribution of a monthly report that provides a list of all ongoing 
pandemic response oversight projects to all pandemic OIGs and GAO, and 
monthly meetings with GAO to share key activities and priorities.
PRAC Fraud Task Force
    Earlier this year, the PRAC stood up a Fraud Task Force to serve as 
a resource for the IG community by surging investigative resources into 
those areas where the need is the greatest: pandemic loan fraud. As of 
July, we have 28 agents from 8 OIGs who have been detailed to work on 
Task Force cases. These agents have partnered with prosecutors at the 
Department of Justice's Fraud Section and at United States Attorneys' 
Offices across the country.
    The idea behind our Task Force is to harness the expertise of the 
oversight community and attack this problem with every tool we have: 
criminal, civil, forfeitures of money and property, suspension and 
debarments. Our PRAC Fraud Task Force works closely with other 
initiatives to combat pandemic fraud such as the Department of Justice 
COVID-19 Fraud Enforcement Task Force.
    Additionally, the PRAC adopted a subpoena policy in April 2021. 
This policy directly supports the Fraud Task Force and our member IGs, 
and contributes to the IG community's efforts to stop the large-scale 
fraud we are seeing in pandemic response programs.
                               Conclusion
    The PRAC was created 16 months ago in the midst of a pandemic, yet 
our extraordinarily talented staff, working with our member OIGs and 
our oversight partners at GAO and at the state and local level, have 
fulfilled the independent oversight responsibilities that the CARES Act 
placed on us and that the public expects from us. While we know oversee 
more than $5 trillion in federal spending, I am confident that the IG 
community is up to the task of doing what we can to advance 
transparency and accountability through our oversight efforts.
    Thank you again for your strong support for our work, and we look 
forward to working with the Congress and the Administration as the PRAC 
and our IG partners continue to fulfill our crucial oversight mission. 
This concludes my prepared statement, and I would be pleased to answer 
any questions that you may have.

    Mr. DeFazio. Thank you.
    We would now move to Ms. Heather Krause, Director of 
Physical Infrastructure, Government Accountability Office.
    Ms. Krause. Chairman DeFazio, Ranking Member Graves, and 
members of the committee, thank you for the opportunity to 
discuss our work on the Federal Government's response to and 
recovery from the COVID-19 pandemic.
    While COVID-19 cases remain significantly lower than the 
peak in January 2021, the recent increases in cases illustrate 
the risk of known and emerging variants, and the associated 
public health and economic challenges. The CARES Act and other 
COVID relief laws included billions in funding to provide 
disaster assistance to State, local, Tribal, and Territorial 
governments, and financial relief to the transportation 
industry.
    FEMA, DOT, and the Department of the Treasury undertook 
additional responsibilities and, in some cases, set up new 
programs to distribute these funds. Our testimony today is 
based on our work examining these efforts, and focuses on, one, 
the status of select relief programs administered by FEMA, DOT, 
and Treasury; and two, lessons learned, and actions to improve 
the Federal response.
    First, FEMA, DOT, and Treasury continue to play critical 
roles in the ongoing Federal response to COVID-19. For example, 
FEMA continues to assist individuals, as well as State, local, 
Tribal, and Territorial governments in response to the 
pandemic, and it has obligated over $79 billion from its 
disaster relief fund. This fund, which is generally used to 
provide assistance following a natural disaster, had never been 
used to provide assistance for a nationwide public health 
emergency on the scale required by the COVID-19 pandemic.
    FEMA's efforts have included providing assistance to 
individuals for lost wages, crisis counseling, and funerals, 
and reimbursing States, Territories, and Tribes for pandemic-
related costs, such as for testing supplies, personal 
protective equipment, National Guard activities, and vaccine 
distribution.
    DOT and Treasury continue to make available the 
approximately $200 billion in financial assistance to the 
transportation sector, including to air carriers, airports, 
motorcoach and schoolbus operators, Amtrak, and transit 
agencies. According to transportation industry representatives 
we have spoken with, this assistance has been critical during a 
period of sharp declines in travel demand, and uncertainty 
about the pace and nature of the recovery, and enabled 
recipients to avoid layoffs, maintain service, and ramp up 
operations as demand for their service improves.
    As the Federal Government's response and recovery efforts 
continue, we identified key lessons and additional actions FEMA 
and DOT can take to help improve these efforts and prepare for 
future public health emergencies.
    For example, we found that clearly established and defined 
roles and responsibilities among Federal agencies is important 
for an effective Federal response. The COVID-19 pandemic 
highlighted once again the need for a National Aviation 
Preparedness Plan to coordinate aviation and public health 
sector efforts, and ensure safeguards are in place to limit the 
spread of communicable disease threats from abroad, while 
minimizing any unnecessary disruptions with travel and trade.
    We recommended that DOT work with the Federal partners to 
develop such a plan. However, DOT maintains that the 
Departments of Health and Human Services and Homeland Security 
should lead that effort. Without such a plan, the U.S. may not 
be as prepared to minimize and quickly respond to future 
communicable disease events.
    In addition, Federal agencies' efforts to effectively 
collect and analyze data are key to making critical decisions 
on program operations. For example, FEMA faced challenges 
collecting and analyzing data on requests for supplies, such as 
personal protective equipment, made through the Federal 
Government. We recommended that DOT develop an interim solution 
to help States track the status of their supply requests, and 
plan for supply needs, which it has not yet taken steps to 
address. Until FEMA develops a solution, States, Tribes, and 
Territories may continue to face challenges that hamper the 
effectiveness of their COVID-19 response.
    In closing, the size and scope of the Federal Government's 
response efforts, from distributing funding to implementing new 
programs, demands strong accountability and oversight. It is 
critical for agencies to implement our recommendations to help 
improve the Government's ongoing efforts, as well as prepare 
for future public health emergencies. We will continue to 
monitor the implementation of these programs and our 
recommendations, as part of our ongoing oversight efforts.
    This concludes our statement. We look forward to answering 
your questions.
    [The joint prepared statement of Ms. Krause and Mr. Currie 
follows:]

                                 
    Joint Prepared Statement of Heather Krause, Director, Physical 
  Infrastructure, U.S. Government Accountability Office and Chris P. 
   Currie, Director, Homeland Security and Justice, U.S. Government 
                         Accountability Office
   COVID-19 Pandemic: Actions Needed to Improve Federal Oversight of 
Assistance to Individuals, Communities, and the Transportation Industry
   highlights of gao-21-105202, a testimony before the committee on 
      transportation and infrastructure, house of representatives
Why GAO Did This Study
    In response to the public health and economic crises created by the 
COVID-19 pandemic, Congress provided billions of dollars across a range 
of agencies to mitigate the effects of COVID-19. This included billions 
to:
      FEMA's Disaster Relief Fund to provide assistance to 
individuals as well as state, local, tribal, and territorial 
governments, and
      DOT and Treasury to provide financial assistance to the 
transportation sector.

    This statement describes: (1) the federal response and selected 
relief programs administered by FEMA, DOT, and Treasury and (2) lessons 
learned based on GAO's reviews of selected COVID-19 relief programs, 
including related recommendations and their implementation status. This 
statement is based on GAO's body of work on the CARES Act issued from 
June 2020 through July 2021.To update this information, GAO reviewed 
agency documentation; and interviewed agency officials, industry 
associations, and selected businesses that applied to these programs on 
the latest implementation efforts.
What GAO Recommends
    GAO has made numerous recommendations to help improve the 
government's ongoing response and recovery efforts and prepare for 
future public health emergencies, including the six identified in this 
statement. While Treasury took action to develop a compliance 
monitoring program, the other five recommendations to FEMA and DOT 
still need to be implemented.
What GAO Found
    The Federal Emergency Management Agency (FEMA), Department of 
Transportation (DOT), and Department of the Treasury (Treasury), among 
others, continue to provide financial assistance to mitigate the 
effects of the COVID-19 pandemic.
      FEMA reported obligating over $79 billion from its 
Disaster Relief Fund to respond to COVID-19. Through several programs, 
FEMA is providing help to individuals with funeral costs; reimbursing 
communities for vaccine distribution; and funding federal agencies' 
efforts to support communities, including National Guard deployments.
      DOT and Treasury continue to make available the over $200 
billion appropriated by COVID-19 relief laws for financial assistance 
to the transportation sector, including to air carriers, airports and 
airport tenants, Amtrak, and transit agencies. Through several 
financial assistance programs, GAO's work has found DOT and Treasury 
have provided critical support to the transportation sector during a 
period of sharp declines in travel demand and uncertainty about the 
pace and nature of the recovery. Depending on the program, financial 
assistance has reportedly enabled recipients to avoid layoffs, maintain 
service, and ramp up operations as demand for their services improves.

    Based on GAO's prior work examining responses to public health and 
fiscal emergencies, including the COVID-19 pandemic, GAO has (1) 
identified key lessons learned that could improve the federal response 
to emergencies, and (2) made several related recommendations, including 
ones that highlight the importance of applying these lessons learned.

        Lessons Learned

          Coordinate, establish, and define roles and 
        responsibilities among those responding to the crisis and 
        address key capability gaps.
          Provide clear, consistent communication.
          Collect and analyze data to inform decision-making 
        and future preparedness.
          Establish mechanisms for accountability and 
        transparency to help ensure program integrity and address fraud 
        risks.
          Consider challenges posed by setting up new programs 
        quickly.

                       Source: GAO, GAO-21-105202

    For example, DOT has not developed a national aviation preparedness 
plan to coordinate, establish, and define roles and responsibilities 
for communicable diseases across the federal government. GAO 
recommended in 2015 that DOT work with federal partners to develop such 
a plan, but it has not taken any action. Without such a plan, the U.S. 
is less prepared to respond to future communicable disease events. In 
addition, FEMA has faced challenges collecting and analyzing data on 
requests for supplies, such as personal protective equipment, made 
through the federal government. In 2020, GAO recommended that FEMA work 
with relevant stakeholders to develop an interim solution to help 
states track the status of their supply requests and plan for supply 
needs. FEMA has not taken action on this recommendation, and until the 
agency develops a solution, states, tribes, and territories will likely 
continue to face challenges that hamper the effectiveness of their 
COVID-19 response.
                               __________
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee:
    We are pleased to be here today to discuss our work assessing the 
federal response to the Coronavirus Disease 2019 (COVID-19) pandemic, 
particularly as it relates to supporting state, local, and tribal 
governments and the transportation sector. As of mid-July 2021, the 
U.S. had nearly 34 million reported cases of COVID-19 with more than 
600,000 reported deaths. In addition, serious economic repercussions 
from the pandemic continue to affect the transportation sector, as 
travel has not fully returned to prepandemic levels across many modes.
    In March 2020, Congress took action in response to this 
unprecedented global crisis to protect the health and well-being of 
Americans. Notably, Congress passed, and the President signed into law, 
the CARES Act, which provided over $2 trillion in emergency assistance 
and health care response for individuals, families, and businesses 
affected by COVID-19.\1\ The CARES Act and other COVID-19 relief laws 
appropriated $95 billion to the Federal Emergency Management Agency's 
(FEMA) Disaster Relief Fund to provide disaster assistance to state, 
local, tribal, and territorial governments, among other things.\2\ 
These laws also appropriated approximately $200 billion in financial 
relief to programs supporting the transportation industry. The 
Department of Transportation (DOT) and Department of the Treasury 
(Treasury) undertook new responsibilities and, in some cases, set up 
new programs to distribute these funds.
---------------------------------------------------------------------------
    \1\ Pub. L. No. 116-136, 134 Stat. 281 (2020). As of March 11, 
2021, five other relief laws were also enacted in response to the 
COVID-19 pandemic: the American Rescue Plan Act of 2021, Pub. L. No. 
117-2, 135 Stat. 4; the Consolidated Appropriations Act, 2021, Pub. L. 
No. 116-260, 134 Stat. 1182 (2020); Paycheck Protection Program and 
Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020); 
Families First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 
178 (2020); and the Coronavirus Preparedness and Response Supplemental 
Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146. We refer 
to these six laws, each of which was enacted as of March 11, 2021, and 
provides appropriations for the COVID-19 response, as ``COVID-19 relief 
laws,'' and the funding appropriated by these laws as ``COVID-19 relief 
funds.''
    \2\ In March 2020, the CARES Act was enacted, appropriating $45 
billion for the Disaster Relief Fund. Pub. L. No. 116-136, div. B, tit. 
VI, 134 Stat. at 543. In March 2021, the American Rescue Plan Act of 
2021 appropriated $50 billion to the Disaster Relief Fund. Pub. L. No. 
117-2, Sec.  4005, 135 Stat. 4, 79.
---------------------------------------------------------------------------
    Recognizing the need for robust monitoring and oversight of new 
authorities and funding, the CARES Act includes a provision for us to 
report regularly on the federal response to the pandemic.\3\ In the 
course of these reviews, we have identified key lessons learned that 
support an effective federal response to crisis.
---------------------------------------------------------------------------
    \3\ Pub. L. No. 116-136, Sec.  19010, 134 Stat. at 579-81.
---------------------------------------------------------------------------
    Our statement today is based on our work examining federal actions 
in response to the public health emergency and economic effects on the 
transportation sector caused by COVID-19. Specifically, this statement 
describes (1) the federal response and selected relief programs 
administered by FEMA, DOT, and Treasury and (2) lessons learned based 
on our reviews of these and other COVID-19 relief programs, including 
related GAO recommendations and their implementation status.
    In preparing this statement, we relied primarily on our body of 
work issued from June 2020 through July 2021 that reviewed, among other 
things, FEMA's efforts to coordinate the federal government's response 
to the COVID-19 public health emergency and provide assistance to 
states, localities, and tribes in obtaining supplies to prepare for and 
cope with COVID-19. This body of work also reviewed DOT and Treasury's 
efforts to support air carriers, aviation contractors and repair 
station operators, ticket agents, airports and airport tenants, transit 
agencies, and Amtrak, among others.\4\
---------------------------------------------------------------------------
    \4\ See COVID-19: Opportunities to Improve Federal Response and 
Recovery Efforts, GAO-20-625 (Washington, D.C.: June 25, 2020); COVID-
19: Brief Update on Initial Federal Response to the Pandemic, GAO-20-
708 (Washington, D.C.: Aug. 31, 2020); COVID-19: Federal Efforts Could 
Be Strengthened by Timely and Concerted Actions, GAO-20-701 
(Washington, D.C.: Sept. 21, 2020); COVID-19: Urgent Actions Needed to 
Better Ensure an Effective Federal Response, GAO-21-191 (Washington, 
D.C.: Nov. 30, 2020); COVID-19: Critical Vaccine Distribution, Supply 
Chain, Program Integrity, and Other Challenges Require Focused Federal 
Attention, GAO-21-265 (Washington, D.C.: Jan. 28, 2021); COVID-19: 
Sustained Federal Action is Crucial as Pandemic Enters Its Second Year, 
GAO-21-387 (Washington, D.C.: Mar. 31, 2021); and COVID-19: Continued 
Attention Needed to Enhance Federal Preparedness, Response, Service 
Delivery, and Program Integrity, GAO-21-551 (Washington, D.C.: July 19, 
2021).
---------------------------------------------------------------------------
    For those reports, we reviewed FEMA, DOT, and Treasury 
documentation, analyzed program data, and interviewed agency officials. 
We also interviewed industry associations representing businesses 
eligible to apply to these federal assistance programs and selected 
applicants. More detailed information on the scope and methodology can 
be found in our June 2020, August 2020, September 2020, November 2020, 
January 2021, March 2021, and July 2021 reports. For this statement, we 
also included information from interviews with agency officials, 
industry associations, and selected businesses that applied to these 
programs on the latest implementation efforts as part of our ongoing 
work on the COVID-19 relief programs. In addition, we obtained updated 
data on the status of financial assistance provided by FEMA, DOT, and 
Treasury.
    We conducted the work on which this statement is based in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
 FEMA, DOT, and Treasury Continue to Play Critical Roles Coordinating 
  Federal Response to COVID-19 and Providing Financial Assistance to 
                           Hard-Hit Entities
    FEMA continues to play a key role in the ongoing COVID-19 pandemic 
response effort, and its workforce has taken on additional 
responsibilities, including supporting COVID-19 vaccine distribution. 
FEMA's Disaster Relief Fund is a major source of federal disaster 
recovery assistance for state, local, and territorial governments when 
a disaster occurs. As we reported in July 2021, this fund--generally 
used to provide assistance following a natural disaster--had never been 
used to provide assistance for a nationwide public health emergency on 
the scale required by the COVID-19 pandemic.\5\ However, as of July 20, 
2021, according to agency officials, FEMA had obligated over $79 
billion from the Disaster Relief Fund for the following three types of 
disaster assistance to respond to COVID-19:
---------------------------------------------------------------------------
    \5\ GAO-21-551.
---------------------------------------------------------------------------
      Individual Assistance. These grants provide disaster 
survivors assistance to cover necessary expenses and serious needs--
such as housing, counseling, or funeral costs--which cannot be met 
through insurance or low-interest loans. For the COVID-19 response, as 
we reported in March 2021 and July 2021, FEMA has used this program to 
provide lost wages assistance, crisis counseling, and funeral 
assistance. For example, FEMA provided funeral assistance in all 50 
states, D.C., Puerto Rico, Guam, Commonwealth of the Northern Mariana 
Islands, American Samoa, and the U.S. Virgin Islands. According to FEMA 
officials, the agency had obligated about $40 billion from the Disaster 
Relief Fund for Individual Assistance grants as of July 20, 2021. This 
includes $38.8 billion for Lost Wages Assistance and $1 billion for 
Funeral Assistance.\6\
---------------------------------------------------------------------------
    \6\ Pursuant to an August 2020 presidential memorandum, upon 
receiving a FEMA grant, states and territories may provide eligible 
claimants $300 or $400 per week--which includes a $300 federal 
contribution--in addition to their Unemployment Insurance benefits. The 
presidential memorandum directed that the program would end when $44 
billion had been obligated; the balance of the Disaster Relief Fund 
reached $25 billion; on December 27, 2020; or upon the enactment of 
legislation providing supplemental federal unemployment compensation, 
whichever comes first. The White House, Memorandum on Authorizing the 
Other Needs Assistance Program for Major Disaster Declarations Related 
to Coronavirus Disease 2019 (Aug. 8, 2020).
---------------------------------------------------------------------------
      Public Assistance. These grants provide assistance to 
state, local, tribal, and territorial governments, and certain types of 
private nonprofit organizations so that communities can quickly respond 
to and recover from major disasters or emergencies. On February 2, 
2021, the President issued a memorandum that directed FEMA to fully 
reimburse states, territories, and tribes for all work eligible for 
emergency protective measures, which includes costs associated with 
vaccine distribution and the purchase of testing supplies and personnel 
protective equipment.\7\ FEMA officials stated that as of July 20, 
2021, FEMA had received 25,798 project applications for Public 
Assistance and awarded $29.7 billion. If all of the remaining 
approximately 16,000 applicants submit projects, FEMA anticipates it 
will receive a minimum of approximately 32,000 additional public 
assistance projects for an estimated additional $27.8 billion as of the 
end of fiscal year 2021.
---------------------------------------------------------------------------
    \7\ For all 59 major disaster declarations for COVID-19, FEMA has 
authorized Public Assistance grants for emergency protective measures 
only. This may include eligible medical care, purchase and distribution 
of food, non-congregate medical sheltering, operation of Emergency 
Operations Centers, and the purchase and distribution of personal 
protective equipment (PPE). White House, Memorandum on Maximizing 
Assistance from the Federal Emergency Management Agency, February 2, 
2021. For natural disasters, Public Assistance grants can be used for 
emergency cleanup and for permanent reconstruction projects to, for 
example, rebuild damaged public infrastructure. White House, Memorandum 
on Maximizing Assistance from the Federal Emergency Management Agency, 
February 2, 2021.
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      Mission assignments. FEMA also issues mission 
assignments--work orders directing other federal agencies to provide 
direct assistance to state, local, tribal, and territorial 
governments--to support disaster response and recovery. For the COVID-
19 response, for example, FEMA issued a mission assignment to the 
Department of Defense to fund National Guard deployments to assist in 
recovery efforts. As of July 21, 2021, according to agency officials, 
FEMA had obligated about $7.5 billion from the Disaster Relief Fund for 
mission assignments.

    FEMA's workforce has also been tasked with taking on additional 
responsibilities to establish mass vaccination sites and provide 
funeral assistance to families impacted by the COVID-19 pandemic.
      Mass vaccination sites. In January 2021, the President 
tasked FEMA with establishing mass vaccination sites as part of a 
national effort to speed the pace of COVID-19 vaccination campaigns and 
to ensure equitable access to vaccinations. In response, FEMA 
established Pilot Community Vaccination Centers (CVC). As of June 20, 
2021, FEMA reported that the Pilot CVCs had given more than 5.6 million 
doses of vaccines across 39 locations, including sites that have 
extended their participation in the pilot program.\8\ As of June 20, 
2021, according to agency officials, FEMA stood down its pilot CVCs 
while continuing to support state-run vaccination efforts. 
Specifically, FEMA is coordinating with other federal agencies to 
support the distribution of COVID-19 vaccines by deploying additional 
personnel to vaccination sites and providing funding to states, tribes, 
and territories for vaccine distribution. As of July 20, 2021, 
according to agency officials, FEMA had obligated almost $5.7 billion 
through the Public Assistance program for vaccine distribution.
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    \8\ The initial pilot period for each location was eight weeks; 
however, jurisdictions were able to request an extension of an 
additional four weeks, during which period of time the site would 
receive federal staffing and support, but not an additional vaccine 
allocation.
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      Funeral assistance. The COVID-19 Funeral Assistance 
Program provides funeral assistance for COVID-19 related deaths that 
occurred after January 20, 2020. In December 2020, the Consolidated 
Appropriations Act, 2021, appropriated $2 billion to the Disaster 
Relief Fund for eligible funeral expenses for individuals or households 
with COVID-19-related funeral expenses.\9\ As we reported in July 2021, 
the scope of FEMA's funeral assistance program for COVID-19 related 
deaths is unprecedented.\10\ On April 12, 2021, FEMA began accepting 
and processing applications for Funeral Assistance via a dedicated call 
center number. According to agency officials, as of July 20, 2021, the 
call center had received and is processing 241,664 applications, and 
FEMA had approved 109,319 applications and awarded approximately $723.7 
million in funeral assistance.
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    \9\ Pub. L. No. 116-260, div. M, tit. II, 134 Stat. at 1910.
    \10\ GAO-21-551.

    COVID-19 relief laws appropriated over $95 billion for DOT to 
provide financial assistance to airports and airport tenants, Amtrak, 
aviation manufacturers and repair station operators, and transit 
agencies.\11\ Based on the most recent data we have, DOT has expended 
close to $27 billion with the level of expenditure varying by 
program.\12\ DOT's Federal Aviation Administration (FAA), Federal 
Railroad Administration (FRA), and Federal Transit Administration (FTA) 
continue to provide financial assistance through these programs, as 
described below.
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    \11\ In addition to the over $95 billion appropriated for COVID-19 
relief, the Airport and Airways Trust Fund received a $14 billion 
appropriation from the general fund. Continuing Appropriations Act, 
2021 and Other Extensions Act, Pub. L. No. 116-159, Sec.  1205, 134 
Stat. 709, 728.
    \12\ Some of these programs received funds in March 2021 and are 
still being rolled-out.
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      Airport grants. Administered by FAA, these grants provide 
funds for eligible airports to prevent, prepare for, and respond to the 
effects of the COVID-19 pandemic. The allocation of funds and certain 
allowable uses of funds differ by COVID-19 relief law.\13\ By accepting 
these funds, certain recipients must meet workforce retention 
requirements.\14\ Airport association representatives told us that the 
federal funding provided has been critical. According to FAA officials, 
federal aid has allowed airports to maintain operations, pay their 
employees, and meet their debt obligations while airports experienced 
historic decreases in revenue and passenger demand for air travel due 
to the COVID-19 pandemic. As of May 14, 2021, according to FAA data 
sources, the agency had processed a total of 5,397 grant applications 
for the CARES Act and the Consolidated Appropriations Act, 2021 funds. 
Specifically, officials stated that in February 2021, FAA began 
allowing airports to amend their initial CARES Act airport grant 
agreements to use grant funds for near-term airport development, such 
as construction projects for the airfield, terminal, or parking. 
Airports were required to submit additional information about proposed 
construction projects. As we reported in July 2021, FAA also continues 
to process Consolidated Appropriations Act, 2021 grant 
applications.\15\ FAA has also begun processing grant applications for 
the American Rescue Plan Act of 2021. According to FAA officials, as of 
July 2021, FAA had expended approximately $6.9 billion of the $20 
billion appropriated to provide grants to airports, including grants 
for the benefit of eligible airport concessions.\16\
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    \13\ Under the CARES Act, funds were available for any purpose for 
which airport revenues may lawfully be used. Under the Consolidated 
Appropriations Act, 2021 and the American Rescue Plan Act of 2021 funds 
were generally available for costs related to operations, personnel, 
cleaning, sanitization, janitorial services, combating the spread of 
pathogens at the airport, and debt service payments. Additionally, 
under the Consolidated Appropriations Act, 2021 and the American Rescue 
Plan Act of 2021, certain amounts were made available to provide relief 
from rent and minimum annual guarantees to airport concessions.
    \14\ Specifically, airport sponsors of small, medium, and large-hub 
airports accepting CARES Act grant funds were required to continue to 
employ, through December 31, 2020, at least 90 percent of the number of 
individuals employed as of March 27, 2020. The Consolidated 
Appropriations Act, 2021 extended this requirement through February 15, 
2021, and the American Rescue Plan Act of 2021 extended this 
requirement through September 30, 2021. Nonhub and nonprimary airports, 
as defined under 49 U.S.C. Sec.  47102, were excluded from the 
workforce retention requirement under each of the three COVID-19 relief 
laws. Additionally, DOT could waive the workforce retention requirement 
if DOT determined that the airport was experiencing economic hardship 
as a direct result of the requirement, or the requirement would reduce 
aviation safety or security.
    \15\ GAO-21-551.
    \16\ FAA grants to airports are made on a reimbursable basis, 
meaning that airports submit requests for costs already incurred. 
According to FAA officials, many airports have already incurred 
reimbursable costs for their grant amounts, even though FAA's 
expenditures appear low.
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      Amtrak grants. Amtrak, which receives federal funding 
through grants from FRA, is to use these funds to prevent, prepare for, 
and respond to COVID-19 and has used these funds to address shortfalls 
in ticket revenue, pay employee salaries, and cover other operating, 
debt, and capital expenses. As we reported in March 2021, COVID-19 
relief laws directed that funding is to be used to support Amtrak's 
state and commuter partners, avoid additional employee furloughs, and 
restore daily long-distance service.\17\ As of May 31, 2021, according 
to agency officials, Amtrak had expended $1.95 billion of the $3.7 
billion appropriated to provide financial assistance.
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    \17\ GAO-21-387.
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      Aviation Manufacturing Jobs Protection program. DOT, in 
setting up this new program, is to use these funds to provide financial 
assistance payments to businesses engaged in aviation manufacturing 
activities and services, or maintenance, repair, and overhaul 
activities and services.\18\ These funds are to be used for wages, 
salaries, and benefits. Recipients must agree to refrain from 
conducting involuntary layoffs or furloughs or reducing pay rates and 
benefits for the eligible employee group for the duration of the 
agreement. Based on DOT's estimated timeframes, DOT will start 
allocating funds out of the $3 billion appropriated by the end of 
September 2021.
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    \18\ To be eligible, a business must show it involuntarily 
furloughed or laid off at least 10 percent of its workforce in 2020 as 
compared to 2019 or has experienced at least a 15 percent decline in 
2020 revenues as compared to 2019. These businesses also may not have 
received federal financial assistance under specified COVID relief 
programs, such as the Paycheck Protection Program.
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      Transit grants. Transit agencies are to use these funds 
to prevent, prepare for, and respond to COVID-19. These funds were 
initially available to transit agencies for any expenses incurred 
related to COVID-19 on or after January 20, 2020, although now these 
funds must be directed, to the maximum extent possible, to payroll and 
operations expenses.\19\ Officials from 22 agencies we interviewed said 
they had used CARES Act grants for operating expenses such as covering 
employee salaries, providing PPE to employees, and implementing 
enhanced cleaning and sanitation procedures on their vehicles. One 
transit agency we spoke with said the federal funding they received 
allowed the agency to meet its local match responsibilities, which had 
been disrupted during the pandemic. Furthermore, transit association 
representatives told us that federal funding used to cover payroll, and 
for cleaning and disinfecting equipment and stations, has been critical 
to instilling the confidence of transportation workers and passengers 
in transit systems. As of May 1, 2021, according to officials, FTA had 
awarded $26.2 billion of the $69 billion appropriated to provide grants 
to transit agencies and transit agencies had expended $18.4 billion. 
FTA is to allocate these funds primarily through existing formula grant 
programs with some limitations.
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    \19\ As of December 27, 2020, recipients were required to direct 
funds, to the maximum extent possible, to payroll and operations of 
public transit (including payroll and expenses of private providers of 
public transportation), unless the recipient certifies to the Secretary 
of Transportation that the recipient has not furloughed any employees. 
Consolidated Appropriations Act, 2021, div. M, tit. IV, 134 Stat. 1182, 
1947.

    COVID-19 relief laws appropriated over $110 billion for Treasury to 
provide financial assistance through programs directed at air carriers, 
aviation contractors, repair station operators, ticket agents, motor 
coach operators, school bus operators, and the passenger and pilot 
vessel industries. Based on the most recent data we have, Treasury has 
made available over $80 billion in financial assistance as loans and 
payments, as described below. With continued uncertainty over when and 
how travel demand will return to pre-pandemic levels, industry 
associations representing aviation and other businesses that applied to 
these programs and selected companies that applied for funding from 
these programs said that although there were challenges, these programs 
provided critical financial assistance that, for example, allowed 
companies to remain operational, maintain their workforce levels, and 
prevent bankruptcies.
      Aviation Worker Payroll Support Programs (PSP1, PSP2, 
PSP3). These funds are to be used by air carriers and aviation 
contractors for employee wages, salaries, and benefits.\20\ As of July 
2021, based on our analysis of Treasury data, 613 PSP1 agreements were 
signed, 479 PSP2 agreements were signed, and 453 PSP3 agreements were 
signed.\21\ In total, Treasury has signed agreements to provide $59 
billion of the $63 billion appropriated and continues to sign PSP3 
agreements. Industry associations and selected companies we interviewed 
reported that these funds provided critical support and helped keep 
employees on payroll. By taking these funds, businesses agreed to 
refrain from conducting involuntary terminations or furloughs for 
specified periods, among other requirements.\22\
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    \20\ Passenger air carriers were eligible for the initial payroll 
support program (PSP1) and the two extensions of the program (PSP2 and 
PSP3). Cargo air carriers were only eligible for PSP1.
    \21\ Many businesses received funding from multiple iterations of 
the program, and only PSP2 recipients are eligible for PSP3 payments.
    \22\ Treasury developed taxpayer protections for certain payments 
made under PSP1, PSP2, and PSP3. Passenger air carriers receiving over 
$100 million of payroll support are required to provide notes equal to 
30 percent of the payroll support provided over $100 million with a 10-
year term. Contractors receiving over $37.5 million of payroll support 
must provide notes equal to 44 percent of the payroll support provided 
over $37.5 million with a 10-year term. In addition, certain recipients 
issued warrants to Treasury providing the right to purchase shares of 
common stock.
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      Loans for Aviation and National Security Businesses. 
Treasury provided loans to aviation and national security businesses, 
which were intended to provide liquidity to these sectors. As we 
reported in December 2020, Treasury executed 35 loans valued at $21.9 
billion from the $46 billion in funds available through this 
program.\23\ As we reported in July 2021, this loan program provided 
critical assistance to large passenger air carriers, but fewer benefits 
to smaller businesses.\24\ As of July 1, 2021, according to a Treasury 
report, 7 loans with a total anticipated value of $18.3 billion have 
been fully repaid. Of the $3.6 billion anticipated value of outstanding 
loans, 36 percent ($1.3 billion) was disbursed by Treasury to loan 
recipients.
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    \23\ GAO, Financial Assistance: Lessons Learned from CARES Act Loan 
Program for Aviation and Other Eligible Businesses, GAO-21-198, 
(Washington D.C.: Dec.10, 2020).Under the CARES Act, Treasury may not 
issue loans or loan guarantees to recipients unless the recipient is a 
publicly traded company and Treasury receives a warrant or equity 
instrument in the company, or in the case of a private company, if 
Treasury receives a warrant, equity instrument, or senior debt 
instrument in the company.
    \24\ GAO-21-551.
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      Coronavirus Economic Relief for Transportation Services 
(CERTS) program. Treasury will provide these funds to businesses that 
operate motor coaches, school buses, and passenger or pilot vessels--to 
be used by recipients primarily to cover payroll. Treasury's 
application portal was open to applicants for four weeks, opening in 
late June and closing on July 19, 2021. After the application period 
closed, Treasury reported it would use information from the complete 
applicant pool to determine the amount of each grant award. As of July 
19, 2021, based on Treasury's estimated timeline, the agency has not 
started awarding funds out of the $2 billion appropriated. Among other 
eligibility requirements, businesses must have experienced revenue 
losses of 25 percent or more from 2019 to 2020 as a direct or indirect 
result of COVID-19 pandemic. Additionally, Treasury may adjust the size 
of individual grants based on other sources of federal assistance 
provided to the applicant.\25\ Finally, these recipients must agree to 
certain conditions, including refraining from conducting involuntary 
furloughs or reducing pay rates or benefits for nonexecutive employees.
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    \25\ Under the Consolidated Appropriations Act, 2021, Treasury may 
reduce the amount of assistance it provides to these businesses to 
ensure that the total federal assistance from all relevant relief 
programs does not exceed a business's 2019 revenues. In determining the 
amount of assistance to be provided, Treasury must consider, among 
other requirements, other sources of federal assistance provided to the 
provider of transportation services.
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Lessons Learned from Selected Federal Response Efforts to the COVID-19 
                                Pandemic
    Based on our prior body of work examining responses to public 
health and fiscal emergencies, including the COVID-19 pandemic, we have 
identified key lessons learned that could improve the federal response 
to emergencies.\26\ We have also made numerous recommendations related 
to improving the federal response, which agencies have taken some steps 
to address. Below we highlight selected findings and six 
recommendations from our prior work on FEMA, DOT, and Treasury that 
demonstrate the importance of applying these lessons learned.
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    \26\ GAO-21-387.
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    Coordinate, establish, and define roles and responsibilities among 
those responding to the crisis and address key capability gaps. As part 
of our review of the government-wide COVID-19 response over the last 
year and a half, we have found that without clearly established and 
defined roles and responsibilities among federal agencies, the federal 
response is not as effective.\27\ With multiple agencies working to 
address and mitigate the public health and economic effects of the 
COVID-19 crisis across the U.S., coordination is essential. For 
example:
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    \27\ GAO-21-387.
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      The COVID-19 pandemic has highlighted--once again--the 
need for a national aviation-preparedness plan for communicable 
diseases that clearly establishes roles and responsibilities. In 2015, 
we found that such a plan could establish a mechanism of coordination 
between aviation and public health sectors to more effectively prevent 
and control a communicable disease threat while minimizing unnecessary 
disruptions to the national aviation system. We recommended that DOT 
work with federal partners to develop such a plan in light of the 
effect of communicable diseases, such as Ebola, on air travel and 
public health; however, DOT maintains that the Departments of Health 
and Human Services and Homeland Security should lead the effort.\28\ 
With no action taken, in June 2020, we urged Congress to take 
legislative action to require the Secretary of Transportation to work 
with relevant agencies and stakeholders, such as the Departments of 
Health and Human Services and Homeland Security, and members of the 
aviation and public health sectors, to develop a national aviation-
preparedness plan.\29\ As we reported in July 2021, Congress has 
considered but not passed legislation to require a national aviation 
preparedness plan.\30\ Without such a plan, the U.S. will be less 
prepared to minimize and quickly respond to future communicable disease 
events.
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    \28\ GAO, Air Travel and Communicable Diseases: Comprehensive 
Federal Plan Needed for U.S. Aviation System's Preparedness, GAO-16-
127, (Washington D.C.: Dec.16, 2015).
    \29\ GAO-20-625.
    \30\ GAO-21-551.
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      Our prior work on National Preparedness found that FEMA 
uses several scenarios--including a pandemic influenza similar to 
COVID-19--to allow states, territories and other jurisdictions to 
assess their own emergency response and recovery capabilities (e.g., 
how quickly they can restore electricity, or how much emergency housing 
they can provide).\31\ While this information has provided useful 
information about capability gaps at the state and local level, FEMA 
has not used the information to determine the nation's capability gaps 
across all levels of government. Moreover, FEMA has yet to determine 
what steps are needed to address the capability gaps once they are 
identified, including capability gaps that have been known since 2012. 
If FEMA had determined what steps are needed to address capability 
gaps, the nation may have been more prepared to respond to COVID-19. In 
May 2020, we reported that FEMA had yet to: (1) determine what steps 
are needed to address the nation's capability gaps across all levels of 
government; and (2) informed key stakeholders, such as Congress, about 
what resources will be needed across all levels of government.\32\ To 
address this, we recommended that FEMA should, following the completion 
of the 2021 National Preparedness Report, determine what steps are 
needed to address the nation's emergency management capability gaps 
across all levels of government and inform key stakeholders, such as 
the Office of Management and Budget and Congress, about what level of 
resources will be necessary to address the known gaps.
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    \31\ See for example, GAO, National Preparedness: Additional 
Actions Needed to Address Gaps in the Nation's Emergency Management 
Capabilities, GAO-20-297 (Washington, D.C.: May 4, 2020).
    \32\ GAO-20-297.
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         In June 2021, FEMA officials stated that they are planning to 
complete the National Preparedness Report by December 31, 2021. In 
addition, FEMA is planning to complete the National Stakeholder 
Preparedness Review and National Preparedness Investment Strategy to 
identify capability gaps and establish priorities that align with those 
gaps. FEMA anticipates it will identify resources and capabilities 
needed to address the national gaps by December 31, 2022.

    Provide clear, consistent communication. In a crisis, federal 
agencies should provide clear and consistent communication, 
specifically to those they are trying to assist.\33\ We previously 
reported that Treasury and FEMA did not always communicate effectively 
with applicants and recipients of programs they administered or 
managed, which left these entities unable to fully benefit from the 
programs:
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    \33\ For example, see GAO-21-387 and GAO-20-701.
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      In prior reviews, we found that Treasury did not 
communicate in a clear, consistent way with applicants and recipients--
particularly smaller businesses--of the Payroll Support Programs and 
Loans for Aviation and National Security Businesses program.\34\ For 
example, we reported in December 2020 that when designing and 
implementing the loan program, Treasury viewed itself as a lender of 
last resort but did not state this view in published documents.\35\ 
This omission led to some applicants being surprised by parts of the 
process, such as when Treasury encouraged over a third of all 
applicants to apply to another loan program before continuing to pursue 
a loan from Treasury. Since Treasury's authority to make new loans 
under this program was set to expire in December 2020, we highlighted 
lessons for Congress and Treasury for designing and implementing 
program like this type in the future, including setting and 
communicating clear program goals and communicating clear timelines for 
actions. As Treasury implements new federal assistance programs, such 
as CERTS, it has opportunities to engage in clearer, more consistent 
communication with eligible businesses and their representatives. 
According to Treasury officials, they are working to ensure CERTS 
program eligibility is easily understood, and they have reached out to 
industry associations representing potential applicants to share 
information about the programs and to inform program design.
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    \34\ GAO-21-551; GAO-21-198; GAO-20-701.
    \35\ GAO-21-198.
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      FEMA did not always communicate effectively with Public 
Assistance applicants, specifically tribal governments. As we reported 
in March 2021, several tribal governments reported challenges related 
to completing administrative requirements-such as activating an 
emergency operations plan and submitting a tribal Public Assistance 
Administrative Plan--to request and receive Public Assistance program 
funding directly from FEMA.\36\ Although FEMA's Tribal Pilot Guidance 
states that tribes may request technical assistance, tribal 
representatives we interviewed reported that many tribal governments 
were given little or no technical assistance when they requested 
support. Without the availability of consistent and timely technical 
assistance across regions, some tribal entities may be unable to 
request and receive Public Assistance directly from FEMA to help 
respond to the COVID-19 pandemic. Further, we reported that FEMA did 
not consult with tribal entities in advance of issuing its policy on 
eligible Public Assistance costs early in the COVID-19 pandemic. In 
March 2021, we recommended that the FEMA Administrator provide timely 
and consistent technical assistance to support tribal governments' 
efforts to request and receive Public Assistance directly from FEMA, 
including providing additional personnel, if necessary, to ensure that 
tribal nations are able to effectively respond to COVID-19.\37\ The 
Department of Homeland Security (DHS) concurred with our 
recommendation. DHS stated that FEMA's Recovery Directorate will 
publish a memorandum that will contain direction to FEMA regions 
regarding the assignment of Public Assistance program delivery managers 
to promote equitable delivery of Public Assistance to tribal 
governments. As we reported in July 2021, FEMA stated that it plans to 
send the draft memorandum to tribal governments in July 2021.\38\
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    \36\ GAO-21-387.
    \37\ GAO-21-387.
    \38\ GAO-21-551.
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         We also recommended that the FEMA Administrator adhere to the 
agency's protocols listed in its updated 2019 Tribal Consultation 
Policy by obtaining tribal input via the four phases of the tribal 
consultation process when developing new policies and procedures 
related to COVID-19 assistance. DHS concurred with our recommendation. 
As we reported in July 2021, DHS stated that FEMA's National Tribal 
Affairs Adviser, based in the Office of External Affairs, will 
coordinate with other FEMA offices and directorates, as appropriate, to 
review the agency's adherence to protocols listed in the Tribal 
Consultation policy.\39\
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    \39\ GAO-21-551.

    Collect and analyze data to inform decision-making and future 
preparedness. Without data, federal agencies face difficulties making 
critical decisions to inform efforts and program operations. In our 
review of FEMA's COVID-19 activities, we found it faced challenges at 
the national and regional levels collecting the data needed to make 
decisions and allow for the prioritization of resources.\40\ In 
September 2020, we reported that these challenges included tracking 
supply requests, including those for personal protective equipment, 
made through the federal government and budgeting for ongoing needs. As 
a result, we recommended that the FEMA Administrator work with relevant 
federal, state, territorial, and tribal stakeholders to devise interim 
solutions, such as systems and guidance and dissemination of best 
practices, to help states enhance their ability to track the status of 
supply requests and plan for supply needs for the remainder of the 
COVID-19 pandemic response.
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    \40\ GAO-21-387; GAO-20-701.
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    As we reported in July 2021, FEMA has not taken action to devise 
interim solutions that would systematically help states, tribes, and 
territories effectively track, manage, and plan for supplies to carry 
out the COVID-19 pandemic response in the absence of state-level end-
to-end logistics capabilities that would track critical supplies 
required for a response of this scale.\41\ Without action across the 
board to help states ensure they have the support they need to track, 
manage, and plan for supplies, states, tribes, and territories on the 
front lines of the whole-of-nation COVID-19 response will likely 
continue to face challenges that hamper their effectiveness.
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    \41\ GAO-21-551. DHS disagreed with this recommendation, noting, 
among other things, work that FEMA had already done to manage the 
medical supply chain and increase supply availability. Although FEMA 
disagreed with our recommendation, it began taking some action in March 
2021. We note that we made this recommendation to both DHS and the 
Department of Health and Human Services (HHS) with the intent that they 
would work together under the Unified Coordination Group to address 
challenges reported by state officials with both public health and 
emergency management responsibilities. Although both DHS and HHS have 
reported separate actions, taken as part of other efforts within each 
separate purview, neither has articulated how they worked with the 
other nor how they assessed whether the actions changed the experiences 
of state officials who reported issues during our prior work.
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    Establish mechanisms for accountability and transparency to help 
ensure program integrity and address fraud risks. With over $200 
billion in financial assistance appropriated to support the 
transportation sector, ensuring the funds are spent as intended is 
critical to reduce fraud and ensure the programs support recovery. Our 
work on COVID relief to the transportation sector underscores the 
importance of establishing, documenting, and implementing processes and 
procedures to ensure accountability and guard against fraud.\42\
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    \42\ GAO-21-191.
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    We found that DOT and Treasury initially experienced challenges 
related to the oversight of COVID relief monies and programs, although 
early difficulties are diminishing.\43\ These challenges underscore the 
tension between getting the funds out as quickly as possible and 
setting up robust, risk-based oversight and monitoring processes:
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    \43\ GAO-21-551; GAO-21-191; GAO-20-701.
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      FAA reported difficulties administering the COVID relief 
programs while simultaneously setting up monitoring and compliance 
systems to oversee funds. More specifically, FAA officials said it was 
challenging and resource-intensive to establish and oversee a grant 
program with more eligible uses than allowed under existing airport 
grant programs. FAA has since taken steps to manage this increased 
workload, including establishing a dedicated team--two full-time 
employees and three annuitants with prior airport grant management 
experience--to review and process airport payment requests. 
Additionally, in late 2020, FAA hired a contractor to develop a 
monitoring dashboard and develop auditing policies and procedures. In 
July 2021, we reported that FAA continues to track recipient compliance 
with statutory workforce requirements. We continue to review FAA's 
oversight efforts.
      Treasury officials also told us that developing a 
compliance monitoring system for hundreds of PSP recipients from 
scratch was time-consuming and initially involved trial-and-error. In 
November 2020, we reported while PSP recipients had begun submitting 
required compliance reports, Treasury had not yet finalized a 
monitoring system to identify and respond to the risk of noncompliance 
with PSP agreement terms, potentially hindering its ability to detect 
program misuse in a timely manner.\44\ We recommended that Treasury 
finish developing and implement a compliance monitoring plan that 
identified and responds to risks of noncompliance. In April 2021, we 
confirmed that Treasury had developed, documented, and implemented a 
risk-based approach to monitor PSP recipients' compliance with the 
terms of their financial assistance. We continue to review Treasury's 
compliance monitoring of PSP recipients.
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    \44\ GAO-21-191.

    In our reviews, we have found that DOT and Treasury are tracking 
recipient compliance with statutory requirements. For example, the 
Payroll Support Programs (PSP1, PSP2, and PSP3) agreements require 
recipients to 1) limit executive compensation and 2) not engage in 
involuntary furloughs or terminations for specific periods of time. 
Concerns continue to be raised by other oversight bodies and members of 
Congress about certain actions taken by recipients that may not be 
serving the interests of taxpayers and aviation workers.\45\ With 
regard to federal assistance to the transportation sector, specific 
concerns have been raised, including the following:
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    \45\ Some have suggested that these concerns could be addressed by 
federal agencies imposing additional requirements on recipients of 
federal assistance.
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      Businesses ``double-dipping'' or obtaining funds from 
more than one federal financial assistance program, and
      Businesses furloughing employees prior to signing PSP 
agreements with workforce retention requirements and outsourcing jobs 
after workforce retention requirements for federal financial assistance 
have expired.

    However, the laws that authorized these programs did not prohibit 
businesses from accessing other federal financial assistance, and the 
requirement for businesses to retain employees expires for PSP3 
recipients in either September of this year or the date on which 
assistance provided is exhausted, whichever is later.
    New programs authorized in December 2020 and March 2021, CERTS and 
Aviation Manufacturing Jobs Protection program, do take into account 
other COVID-19 relief funding provided to eligible recipients. 
According to DOT and Treasury officials, these and other relevant 
requirements regarding eligibility will be clearly laid out and built 
into the application and review process.
    Consider challenges posed by setting up new programs quickly. In a 
crisis, federal agencies may be called upon to set up new programs to 
address urgent needs. In our reviews, DOT and Treasury acknowledged 
challenges in standing up new COVID relief programs and getting funds 
out quickly through these programs. For example:
      DOT was tasked with setting up the Aviation Manufacturing 
Jobs Protection program under the American Rescue Plan Act of 2021 in 
March 2021. Setting up this program included establishing program rules 
and guidelines, creating a public website, conducting public outreach, 
selecting an application portal, and moving personnel within the 
department to lead this effort and provide assistance. DOT officials 
said setting up a new program for a sector that has not historically 
received federal financial assistance, requires a balance between 
distributing the funds quickly while ensuring necessary oversight is in 
place.
      With regard to PSP, the loan program, and CERTS, Treasury 
also noted the challenges of setting up emergency financial programs 
with intense industry expectations for the quick distribution of 
funds.\46\ Also, Treasury officials noted the challenge of providing 
assistance to industry sectors for which the agency had no prior 
experience and that included a wide-range of applicants, from those 
with only a few employees to those with tens of thousands.
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    \46\ The CARES Act required Treasury to publish procedures for PSP1 
not later than 5 days after the date of enactment of the act, and for 
the loan program within 10 days after enactment of the act. 
Additionally, the CARES Act directed Treasury to make initial payments 
to air carriers and contractors that submitted requests for financial 
assistance approved by the Secretary no later than 10 days after 
enactment of the act.

    In our reviews, we found that distributing funds through existing 
programs was relatively straightforward.\47\ Unlike the Aviation 
Manufacturing Jobs Protection program and the programs implemented by 
Treasury; FRA and FTA allocated funds primarily through existing 
programs, as directed by law. For example, FTA was able to distribute 
grants to transit agencies quickly using its existing program formulas. 
In addition, many of the transit grant recipients were well-known by 
FTA.
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    \47\ GAO-21-387; GAO-21-191.
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    As part of our ongoing work, we will continue to assess how FEMA, 
DOT, and Treasury are implementing the federal response as the country 
recovers from the public health and economic crises brought on by 
COVID-19 pandemic. This work includes examining how DOT and FAA are 
supporting research and development related to protecting the health of 
air travelers during pandemics while also maintaining aviation safety, 
security, and efficiency. In addition, we will continue to monitor 
issues related to FEMA's Disaster Relief Fund, workforce, and funeral 
assistance for COVID-19 related deaths.
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee, this completes our prepared remarks. It is critical for 
agencies to implement our recommendations to help improve the 
government's ongoing response and recovery efforts as well as prepare 
for future public health emergencies. We will continue to assess these 
issues as part of our ongoing work, including making recommendations as 
appropriate, and will be happy to assist the Committee as you work to 
support the federal efforts to recover from the pandemic. We would be 
pleased to respond to any questions that you may have at this time.

    Mr. DeFazio. Thank you for your testimony.
    We now move on to the Honorable Eric J. Soskin, inspector 
general, DOT.
    Mr. Soskin. Chairman DeFazio, Ranking Member Graves, and 
members of the committee, thank you for inviting me today to 
discuss DOT's response to the challenges created by the COVID-
19 pandemic.
    As you know, COVID-19's impact on the transportation 
industry has seriously affected jobs, businesses, and the lives 
of most Americans.
    DOT is committed to the safety and efficiency of our 
transportation system. And DOT agencies have moved quickly to 
release the more than $106 billion that Congress provided to 
DOT to help workers, families, and businesses deal with the 
pandemic. However, the large volume of funds makes it critical 
for DOT to enforce internal controls to prevent fraud, waste, 
and abuse.
    Today I will focus on the five risk areas my office has 
identified to help DOT effectively steward its COVID relief 
funds. Those are airport grants management; surface 
transportation oversight; contract and grant execution; 
financial management systems; and prevention of fraud, waste, 
and abuse.
    As to the first risk area, FAA must make effective use of 
the $20 billion in COVID relief funds it received for American 
airports. We have recommended stronger controls over grantee 
reimbursements, and a risk-based approach for detecting fraud, 
waste, and abuse. To its credit, FAA has begun assigning 
appropriate risk levels to grantees, and adjusting its 
oversight accordingly. FAA will also benefit from enforcing 
existing policies to verify grant spending and check cost 
increases. A focus on controlling costs is critical, given the 
100-percent Federal share the CARES Act provides for approved 
projects.
    Second, DOT's surface agencies must adapt their oversight 
to mitigate risks. These agencies received most of DOT's COVID 
relief funds, about $83 billion. And the volume also presents 
operational challenges. FTA and FRA, for example, received much 
more for some programs they oversee than in a typical year. 
While FTA quickly allocated these funds, transit agencies may 
take years to actually expend the grants, time during which the 
specific recipients and purposes can change. FTA must, 
therefore, ensure that it correctly awards funds, and tracks 
them over time. FRA faces similar challenges, with monitoring 
the $3.7 billion in supplemental funding Congress provided for 
Amtrak through FRA.
    At the same time, agencies must contend with the pandemic's 
operational impact and increased program risks. For example, 
FTA postponed its in-person oversight reviews in 2020, but has 
since resumed them, and now plans additional oversight reviews 
for COVID funding recipients this year.
    The third risk area for DOT is better managing contracts 
and grants. This is key, given the massive influx of COVID 
funds, in addition to its already substantial annual funding 
for contracts and grants that will be critical for DOT to 
address weaknesses our prior work has found.
    Specifically, DOT must, one, foster competition and obtain 
reasonable pricing for services and programs; two, ensure that 
contractors and grantees expend funds to achieve desired 
outcomes; three, have sufficient numbers of adequately trained 
and supervised personnel to ensure compliance with Federal 
requirements; and four, DOT must maintain the integrity of its 
multiple financial management systems, particularly given the 
recent increase in cyber attacks on Federal and private-sector 
information systems.
    DOT must, likewise, maintain its vigilance on efforts to 
prevent improper payments, as the drastic increase in 
disbursements and transactions could make compliance with 
Federal requirements more difficult.
    Finally, we are increasing our outreach to transportation 
agencies, as COVID relief funds are susceptible to fraud, 
waste, and abuse. Early detection and intervention will be 
critical, and it will be important for DOT agencies to use 
high-quality tracking and monitoring procedures. We are working 
to inform DOT staff and grantees about red-flag indicators of 
fraud, and how to report that fraud, as well as tracking and 
monitoring information.
    We are committed to using our audits and investigations to 
help maximize the Department's COVID funding, and to help it 
meet its mission. And we will keep the committee apprised of 
our work.
    This concludes my prepared statement. I will be happy to 
answer any questions that you, Mr. Chairman, or other members 
of the committee may have. Thank you.
    [Mr. Soskin's prepared statement follows:]

                                 
  Prepared Statement of Hon. Eric J. Soskin, Inspector General, U.S. 
                      Department of Transportation
Challenges Facing the Department of Transportation's COVID-19 Response 
                                Efforts
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee:
    Thank you for inviting me here today to discuss the Department of 
Transportation's (DOT) response to the challenges caused by the 
Coronavirus Disease 2019 (COVID-19) pandemic. As you know, COVID-19 has 
had a major impact on the U.S. transportation industry in ways that 
affect the Nation's economy and the jobs, businesses, and way of life 
of the American people. We note the Department's commitment to the 
success of recovery efforts through its work to ensure the safety and 
efficiency of the American transportation system while also protecting 
the safety and well-being of DOT employees.
    The Department has moved quickly to make the over $106 billion that 
Congress provided \1\ to DOT agencies available to help American 
workers, families, and businesses deal with the pandemic (see exhibit 
A). The volume of the funds and the speed with which they have been 
made available, however, present serious oversight challenges beyond 
those we have highlighted in past reports to the Secretary of 
Transportation and Congress. In June 2020, to help DOT promote 
effective stewardship of the over $36 billion provided by the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act, we 
identified five potential risk areas to help the Department bolster its 
oversight of these funds: managing airport grants efficiently; adapting 
surface transportation oversight approaches when necessary; executing 
contracts and grants effectively; tracking and monitoring funds 
accurately; and preventing and detecting fraud, waste, and abuse. These 
risk areas, and our suggestions to mitigate them, were drawn largely 
from our prior work helping DOT oversee a significant influx of funds 
for economic and emergency relief.\2\ Since that time, the Coronavirus 
Response and Relief Supplemental Appropriations (CRRSA) Act and 
American Rescue Plan (ARP) Act have added over $70 billion to this huge 
investment in DOT programs. These additional appropriations make the 
Department's attention to spending risks and internal controls even 
more critical for efficient and compliant expenditures and prevention 
of fraud, waste, and abuse.
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    \1\ The Coronavirus Aid, Relief, and Economic Security (CARES) Act 
of 2020 (Pub. L. 16-136) provided over $36 billion to DOT. The 
Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act 
of 2021 (Pub. L. 116-220) provided over $27 billion and the American 
Rescue Plan (ARP) Act of 2021 (Pub. L. 117-2) provided over $43 
billion. See exhibit A for the breakdown by agency.
    \2\ The American Recovery and Reinvestment Act of 2009 (ARRA), Pub. 
L. 111-5.
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    My testimony today will focus on the five risk areas mentioned 
above and how we are working to support the Department's efforts to 
help ensure funds achieve their vital purpose.
                                Summary
    DOT has received billions of dollars to fund its efforts to respond 
to and mitigate COVID-19 across all modes of transportation. For 
example, the Federal Aviation Administration (FAA) received over $20 
billion to support airports' continuing operations and replace lost 
revenue resulting from the sharp decline in passenger traffic and other 
airport business due to the pandemic. To mitigate the challenges 
associated with this huge influx of funds, we found that FAA must 
establish controls to ensure grantees adhere to Federal requirements 
and increase its own reporting transparency. The Agency is taking 
positive steps toward establishing a risk-based oversight approach and 
has categorized all COVID-related relief grants as ``high risk,'' thus 
strengthening its ability to manage these grant funds. DOT's surface 
transportation agencies received about $83 billion in COVID-19 relief 
funding and also face challenges in overseeing these funds and carrying 
out normal operations under COVID-19 constraints. Further, DOT agencies 
have started to adjust their oversight approaches to ensure that 
recipients meet Federal requirements and will need to continue to do 
so. We also highlighted that the Department must increase emphasis on 
how it awards and administers contracts and grants, ensure that 
individuals making agency or recipient awards have appropriate 
authority and training, improve procedures to maintain its overall low 
improper payment rate, and maintain the availability and integrity of 
its multiple financial management systems. Layered atop these 
challenges is the fact that the volume of COVID-19 relief funds and the 
speed at which they must be disbursed puts them at a higher than usual 
risk for fraud, waste, and abuse. For this reason, we found that it 
will be critical for all DOT agencies to implement data-quality 
procedures for tracking and monitoring and to be aware of ``red flag'' 
indicators of fraud schemes. To assist DOT in achieving that end, we 
are conducting outreach and education efforts to enhance understanding 
about how to recognize, prevent, and report fraud to the appropriate 
authorities.
            Effectively Managing Grants To Support Airports
    Since March 2020, FAA has received $20 billion in COVID-relief 
funds \3\ for grants-in-aid through the Airport Improvement Program 
(AIP)--more than the amount it received through AIP in the preceding 5 
fiscal years combined. While AIP has been DOT's main vehicle for 
providing grants to airports across the Nation for many years, FAA's 
receipt of this unprecedented injection of funds for COVID-19 relief 
comes with challenges similar to those our prior work has identified. 
To ensure these funds are put to effective use, FAA needs to establish 
increased controls over grantee reimbursements and implement a risk-
based approach to detect potential fraud, waste, and abuse.
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    \3\ FAA received $10 billion through the CARES Act, $2 billion 
through CRRSA, and $8 billion through the ARP Act.
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Establish Controls To Prevent Lapses in Grantee Adherence to Federal 
        Requirements and Increase Reporting Transparency
    Our work has previously identified challenges that FAA faces in its 
efforts to effectively manage large allocations of funds. Audits we 
conducted following Hurricanes Katrina and Rita in 2005 and the 
economic recession of 2009, as well more recent assessments, found 
lapses in grantee adherence to Federal laws and regulations, including 
those regarding improper payments, periods of performance, and grant 
documentation.\4\ Our 2021 AIP audit, for example, identified misused 
funds, false claims, and insufficient supporting documentation for 
reimbursement requests--issues with a total impact on AIP obligations 
of $298.1 million. Resolving these issues is critical, in part because 
the CARES Act authorizes the Federal share of approved projects to be 
increased to 100 percent, potentially reducing the incentives for 
localities to rigorously control project costs. Therefore, the Agency 
will benefit from enforcing existing policies that require program 
managers to verify grant fund expenditures and cost increases.
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    \4\ Oversight of Airport Improvement Program Hurricane Grants (OIG 
Report Number AV-2007-014), December 13, 2006. FAA Fulfilled Most ARRA 
Requirements in Awarding Airport Grants (OIG Report Number AV-2011-
053), February 17, 2011. Gaps in FAA's Oversight of the AIP State Block 
Grant Program Contribute to Adherence Issues and Increase Risks (OIG 
Report No. AV2021017), February 10, 2021. OIG reports are available on 
our website: https://www.oig.dot.gov/.
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    Our prior AIP audit work has also identified concerns about FAA's 
grant reporting practices. For example, FAA did not update over 75 
percent of the American Recovery and Reimbursement Act (ARRA) estimated 
grant amounts it published online with its actual awards to recipients. 
In particular, 25 of the 319 project cost estimates were off by more 
than 50 percent. Similarly, we identified issues with the accuracy of 
FAA-provided data for AIP grants during our 2021 review.
Use a Risk-Based Approach for Grant Oversight
    In addition, FAA is following through on recommendations made in 
our past work to establish a risk-based oversight approach, assign the 
appropriate risk level to grantees, and adjust the Agency's oversight 
accordingly. Given FAA's need to target its resources to oversee the 
vast number of grants that will be supported by COVID-19 funds, we 
initiated an audit assessing FAA's policies and procedures for the 
award and oversight of CARES Act funds. While this audit is currently 
underway, we have found that FAA has categorized all of its COVID-
related relief grants as ``high risk''-generating additional oversight 
and review responsibilities for Agency officials. In addition, FAA has 
primarily centralized those oversight and review responsibilities 
within its Headquarters personnel; it took this action to ensure that 
the process is standardized and to accelerate awareness of potential 
implementation issues due to the unique nature of the relief funding. 
For example, FAA is planning to collect and review documentation for 
the Aviation Manufacturing Jobs Protection Program.\5\ These steps will 
strengthen the Agency's mitigation strategy for identifying financial 
errors and inconsistencies in order to detect and prevent improper 
payments. Our future work will continue to focus on FAA's efforts to 
protect taxpayers' interests related to the oversight and management of 
these COVID-related grants.
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    \5\ The Aviation Manufacturing Jobs Protection Program, established 
by the American Rescue Plan Act of 2021, provides funding to eligible 
businesses, paying up to half of their compensation costs for certain 
categories of employees for up to 6 months.
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Leveraging Stewardship and Oversight Approaches To Enhance Transparency 
                           and Mitigate Risk
    DOT's surface transportation agencies received extensive COVID-19 
relief funding--about $83 billion. In particular, the Federal Transit 
Administration (FTA) has received about $69 billion to help transit 
systems in the United States mitigate the impacts of COVID-19, 
including support for their operating expenses. Congress also provided 
$10 billion to the Federal Highway Administration (FHWA) for highway 
infrastructure programs; over $3.7 billion to the Federal Railroad 
Administration (FRA) to support Amtrak; approximately $4.1 million to 
the Maritime Administration; and $150,000 to the Federal Motor Carrier 
Safety Administration. Based on our work, we have identified challenges 
these agencies may face in overseeing their funds in addition to 
carrying out normal operations under COVID-19 constraints.
Track and Report on Funding Progress and Accountability
    Sound processes for accurate tracking and reporting on funding 
progress and accountability are important for transparency and 
mitigating the risk of misuse.\6\ FTA and FRA, for example, received 
substantially more for the programs funded through COVID relief than 
they typically receive annually for the same programs and for recent 
disasters, such as Hurricane Sandy. While FTA has expeditiously 
allocated its COVID-relief funds, our work examining FTA's progress in 
using about $10 billion in Hurricane Sandy funds shows that transit 
agencies receiving grant funds can take years to expend large 
amounts.\7\ In addition, the amounts allocated to specific recipients 
and purposes can change over time. Therefore, FTA will need to pay 
ongoing attention to ensure that it correctly awards funds to 
recipients and that obligated amounts do not exceed limitations. 
Similarly, FRA oversees annual Federal funding for Amtrak, which in the 
last fiscal year amounted to $2 billion. In June 2021, we reported on 
FRA's program to oversee Amtrak's use of these Federal funds.\8\ The 
$3.7 billion in supplemental funding appropriated to ameliorate the 
impact of COVID-19 on Amtrak makes FRA's oversight even more critical. 
Our work, which was also applicable to FRA's oversight of the 
supplemental funding, found that the Agency has taken steps to improve 
its Amtrak oversight program and has plans to address weaknesses in its 
processes and systems for monitoring expenditures and tracking and 
following up on issues. FRA's completion of this work will enhance its 
ability to oversee Amtrak's use of both annual and COVID-19 
supplemental funding.
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    \6\ According to GAO's Government Auditing Standards (GAO-21-368G), 
April 2021, as reflected in applicable laws, regulations, agreements, 
and standards, Federal program officials and managers are responsible 
for providing reliable, useful, and timely information for transparency 
and accountability of these programs and their operations.
    \7\ Our work supporting FTA's Hurricane Sandy funding oversight 
includes: FTA Made Progress in Providing Hurricane Sandy Funds but 
Weaknesses in Tracking and Reporting Reduce Transparency Into Their Use 
(OIG Report No. ST2021032), July 21, 2021; FTA's Limited Oversight of 
Grantees' Compliance With Insurance Requirements Puts Federal Funds and 
Hurricane Sandy Insurance Proceeds at Risk (OIG Report No. ST2020005), 
October 30, 2019; and FTA Has Not Fully Implemented Key Internal 
Controls for Hurricane Sandy Oversight and Future Emergency Relief 
Efforts (OIG Report No. ST2015046), June 12, 2015.
    \8\ Fully Implementing a Grants Management Framework Will Enhance 
FRA's Amtrak Funding Oversight (OIG Report No. ST2021027), June 30, 
2021.
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Adapt Oversight Processes To Address COVID-19 Impact and Program Risks
    The Department also must contend with the pandemic's impact on 
program risks and operations, such as in-person inspections and travel. 
For example, while FTA was monitoring and providing guidance to grant 
recipients, it postponed the oversight reviews planned for fiscal year 
2020 until fiscal year 2021. In April 2021, FTA reported that it has 
since incorporated oversight of COVID-19 relief funds into the Agency's 
existing oversight program and developed a new proactive approach to 
COVID-19 relief funding oversight that focuses on both technical 
assistance and supplemental oversight.\9\ The Agency added that, 
starting in early summer 2021, it will begin supplemental oversight 
activities for COVID-19 relief funding recipients not scheduled for a 
Triennial or State Management Review this year. These steps by FTA to 
enhance oversight of COVID-relief funding are laudable and indicate 
progress toward addressing the potential risk areas we identified for 
stewardship of these funds. Such actions are also particularly 
important in light of the ways in which COVID-relief laws changed how 
recipients can use FTA funds, such as by allowing all recipients, 
regardless of size or urbanized area population, to charge operating 
expenses to FTA grants on a 100-percent Federal share basis. Other DOT 
agencies may face similar challenges and also may need to adjust their 
oversight approaches to ensure that recipients meet Federal 
requirements and use funds only for eligible purposes. We anticipate 
that future audits will examine the Department's performance in this 
area and also assess DOT's tracking and reporting efforts. We recently 
announced our audit of FTA's COVID-19 relief funding oversight.
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    \9\ FTA, ``Dear Colleague'' Letter, April 20, 2021.
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 Executing Contracts and Grants Effectively To Achieve Desired Outcomes
    Given the large influx of COVID-19 funds the Department has 
received, DOT agencies will need to pay even greater attention to the 
ways in which they award and administer contracts and grants. As of 
July 6, 2021, DOT had received over $106.3 billion in COVID-19 funding 
and had obligated over $47 billion of those funds. This obligation was 
in addition to its annual contract and grant obligations, which totaled 
over $74 billion in fiscal year 2019. Based on our previous work, 
unless the Department sustains focus on its award and oversight 
practices, it will face a number of risks to the effective use of these 
funds. Specifically, the Department needs to ensure that DOT agencies 
foster competition and receive reasonable pricing for services and 
programs; contractors and grantees expend funds as intended and to 
achieve desired outcomes; and that adequately trained and supervised 
personnel manage funds in accordance with Federal requirements. Our 
future work will focus on whether the Department is able to effectively 
manage the use and expenditure of DOT grant and contract funds, 
including those for COVID relief.
Foster Competition to the Extent Practical and Ensure Reasonable 
        Pricing
    To achieve efficiency and effectiveness and realize the best value 
for taxpayers, DOT will need to promote competition to the extent 
practicable and verify fair and reasonable pricing before agency-funded 
contracts are awarded. These activities should include developing sound 
independent Government cost estimates, conducting price and/or cost 
analyses, and requiring adequate justification for single bids. 
However, our past work--which has covered oversight of FHWA's ARRA-
related spending--identified deficiencies in these areas that could put 
billions in Federal funds at risk. For example, our 2012 audit of ARRA-
funded FHWA contracts showed that even minimal increases in the number 
of bids received could have a significant impact.\10\ Prices for 
contracts with one or two bids averaged 11 percent higher than prices 
for contracts with three bids--resulting in a total projected price 
difference of at least $179 million. In addition, in 2019, we assessed 
FAA's competitive award practices for major acquisition program 
contracts and subsequently recommended that the Agency could put up to 
$4.9 billion in Federal funds to better use by improving its ability to 
establish contract pricing that is fair, reasonable, and realistic.\11\ 
Specifically, FAA put billions of dollars at risk by awarding some 
competitive contracts without developing required Government cost 
estimates or adequately justifying several noncompetitive awards.
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    \10\ Lessons Learned From ARRA: Improved FHWA Oversight Can Enhance 
States' Use of Federal-Aid Funds (OIG Report No. ZA-2012-084), April 5, 
2012.
    \11\ FAA's Competitive Award Practices Expose Its Major Program 
Contracts to Cost and Performance Risks (OIG Report No. ZA2020020), 
March 9, 2020.
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Ensure That Contractors and Grantees Expend Funds as Intended
    As is the case with the Department's annual contract and grant 
spending, it is vital that DOT provide clear direction to contractors 
and grantees on Federal requirements for verifying and documenting 
expenditures of COVID-19 funds. However, our past work has found that 
DOT could do more to direct grantees to provide supporting 
documentation for their reimbursement requests and reviews to avoid 
improper payments. For example, in 2019, we reported that the 
Department did not routinely require grantees to provide support 
showing that the costs they submitted for reimbursement were reasonable 
or allowable.\12\ In addition, our review of FTA's oversight of 
Hurricane Sandy funds determined that FTA did not verify that grantees 
were using those funds solely for eligible expenditures, including an 
instance where a grantee had inappropriately spent over $17 million 
that had to be returned to the Federal Government.\13\ We also recently 
reported that FAA did not always award and administer contracts in 
accordance with the domestic content laws,\14\ which direct Federal 
agencies, with certain exceptions, to purchase American-made materials 
and goods to strengthen our economic and national security.\15\ This 
lack of compliance highlights another potential risk area for the 
Department as it strives to maximize the extent to which COVID-relief 
funding fulfills the goal of supporting our Nation's economic well-
being.
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    \12\ Stronger Guidance and Internal Controls Would Enhance DOT's 
Management of Highway and Vehicle Safety R&D Agreements (OIG Report No. 
ZA-2019-051), May 1, 2019.
    \13\ FTA Can Improve Its Oversight of Hurricane Sandy Relief Funds 
(OIG Report No. ZA2016077), July 21, 2016.
    \14\ Domestic content laws include the Buy American Act (BAA), 41 
U.S.C. Sec. Sec.  8301-8305, and Buy American Preference (BAP), 49 
U.S.C. Sec.  50101.
    \15\ Gaps in Guidance, Training, and Oversight Impede FAA's Ability 
To Comply With Buy American Laws (OIG Report No. ZA2021026), June 2, 
2021.
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    In the coming months, we will continue our work to assess the 
Department's efforts to effectively monitor the use of its COVID-19 
funds. Planned audits include assessing FAA's oversight of CARES Act-
funded airport development contracts and evaluating whether other DOT 
or grantee contracts using COVID-19 funds were awarded and expended for 
their intended purpose and accurately tracked for transparency.
Appropriately Train and Manage Personnel Who Administer Federal Funds
    Our previous reviews of DOT and grantee contracting activities also 
identified issues with the authorization and training of staff who 
award funds--within the Department and at recipient organizations. 
Given the distinct requirements associated with the COVID-19 funds, DOT 
must require that individuals administering agency or recipient awards 
have the appropriate authority and training to ensure compliance with 
applicable laws and regulations and that funds are used for intended 
purposes, an area in which our previous work has found gaps.\16\ In 
other work, we found that two DOT agencies--representing 69 percent of 
the Department's overall COVID funding--did not ensure that oversight 
support staff consistently documented their reviews or that resulting 
recommendations were tracked and resolved at the grantee and Federal 
levels.\17\
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    \16\ MWAA's Weak Policies and Procedures Have Led to Questionable 
Procurement Practices, Mismanagement, and a Lack of Overall 
Accountability (OIG Report No. AV-2013-006), November 1, 2012.
    \17\ FTA Did Not Adequately Verify PATH's Compliance With Federal 
Procurement Requirements for the Salt Mitigation of Tunnels Project 
(OIG Report No. ZA2016057), March 28, 2016; Opportunities Exist To 
Improve FRA and Volpe's Acquisition and Use of Oversight Contractors 
(OIG Report No. ZA2019056), July 10, 2019; FTA Has an Opportunity To 
Improve the Integrity Monitor Program for Hurricane Sandy Grantees (OIG 
Report No. ZA2019064), September 9, 2019.
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 Ensuring the Availability and Integrity of DOT's Systems for Tracking 
                      and Monitoring Federal Funds
    Effective stewardship of COVID relief funds depends on DOT's 
ability to effectively track and monitor spending, to detect errors in 
grant activities, and keep errors in expenditures low. These efforts 
require the Department to maintain the availability and integrity of 
its financial management systems.
Maintain the Availability and Integrity of DOT's Systems for Tracking 
        and Monitoring Federal Funds
    A major possible risk area for the Department is maintaining the 
confidentiality, availability, and integrity of the financial 
management systems \18\ that process CARES Act grants and monitor and 
disburse payments. Due to an increase in cyberattacks on Federal and 
private sector information systems since March 2020, we are currently 
assessing the security of the financial systems the Department uses to 
track and monitor COVID relief funds. For example, our review of FTA's 
ability to mitigate threats from cyberattacks found security control 
weaknesses, including that the Agency does not require over 4,600 
external users to use multifactor authentication, such as a username 
and password or a personal identification verification card, to access 
its financial management systems. Cyberattacks are among the biggest 
security threats facing the Federal Government today, as evidenced by a 
May 2021 Executive order that requires agencies to implement 
multifactor authentication within 180 days.
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    \18\ FTA uses three financial management systems--Transit Award 
Management System, Financial Management System and ECHO-WEB, which 
interfaces with the DOT-wide financial management system, Delphi.
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    Given the multiple financial management systems involved in 
tracking COVID relief grants, the Department will face security risks 
in tracking and monitoring these funds. For instance, an attacker could 
exploit vulnerabilities to take control over certain systems, cause a 
denial of service attack, or gain unauthorized access to critical files 
and data. To protect the integrity, availability, and confidentiality 
of sensitive information and mitigate risks to its financial management 
systems, DOT will need to effectively select, assess, and monitor its 
security controls and detect and correct weaknesses. For example, 
consistent updating of financial management systems with software 
patches will be vital whenever a security flaw is uncovered. Also, to 
mitigate risks to data availability, DOT must maintain adequate 
disaster recovery plans to quickly restore systems after unexpected 
disruptions. We will keep this committee apprised of DOT's progress in 
these and other areas when we complete our current audit work.
Maintain Compliance With Improper Payment Reporting
    During previous reviews,\19\ we found that some errors, such as 
improper payments, were caused by insufficient documentation, a program 
design or structural issue, or an administrative or process error made 
by State or local agency grantees. We also reported that DOT complied 
with the requirements of the Improper Payments Elimination and Recovery 
Act of 2010 and the Payment Integrity Information Act of 2019 and had 
reported an overall improper payment rate below 10 percent for each 
reviewed program and activity.\20\ However, the drastic increase in 
disbursements and volume of transactions under the COVID relief 
statutes could make it difficult for DOT to keep its reported improper 
payments below the 10-percent threshold. Sustained focus on procedures 
to detect improper payments could help mitigate this risk.
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    \19\ DOT's Fiscal Year 2019 IPERA Compliance Review (OIG Report No. 
FS2020029), April 27, 2020; DOT's Fiscal Year 2018 IPERA Compliance 
Review (OIG Report No. FI2019054), June 3, 2019; DOT's Fiscal Year 2017 
IPERA Compliance Review (OIG Report No. FI2018055), May 14, 2018.
    \20\ See OIG Report No. FS2020029. The Payment Integrity 
Information Act of 2019 (PIIA), Public Law 116-117, superseded the 
Improper Payments Elimination and Recovery Act of 2010 (IPERA), Pub. 
Law 111-204 (July 2010); see DOT's Fiscal Year 2020 Payment Integrity 
Information Act Compliance Review (OIG Report No. FI2021031), July 14, 
2021.
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Increasing Outreach and Education to Transportation Agencies To Prevent 
                   and Detect Fraud, Waste, and Abuse
    The volume of COVID-19 relief funds and the speed with which they 
are disbursed puts them at a higher than usual risk for fraud, waste, 
and abuse by recipients. Given that these funds will be spent on 
multiple purposes, with disparate requirements and restrictions, 
existing risk assessments may not be sufficient. Based on our prior 
assessments of DOT's oversight of large funding amounts--such as 
through ARRA and other initiatives--early detection and intervention is 
essential to mitigate misuse of funds. Thus, it will be critical for 
all DOT agencies to implement data quality procedures for tracking and 
monitoring. We are reviewing financial datasets--from the Department 
and from other Government resources--to determine whether DOT agencies 
are using COVID-19 funds properly.
    An important way to deter fraud is for DOT staff and grantees to be 
aware of certain ``red flag'' indicators typically associated with 
fraud schemes. For example, any mismarking or mislabeling of products 
and materials might indicate product substitution fraud; see exhibit B 
for descriptions of other fraud indicators. The best way to make 
individuals aware of these indicators is to conduct systematic fraud 
prevention education in the field. To that end, we are working with the 
Department to conduct outreach and education efforts to enhance 
understanding about how to recognize, prevent, and report potential 
fraud to the appropriate authorities, including our office.
    Since March 2020, our Office of Investigations has conducted over 
1,200 hours of outreach focusing on education and deterrence related to 
the Department's COVID-relief funds. In fact, this year we have almost 
doubled the hours we spent on COVID-relief outreach a year ago. In 
addition to hosting training events for our own investigators, we have 
conducted 139 COVID-funding-related outreach activities with DOT 
officials, regional modal partners, State grant recipients, and Federal 
law enforcement partners across the country--38 of which included 
information on fraud indicators. In addition, we are greatly involved 
with the work of the Pandemic Response and Accountability Committee, 
and we continue to seek out innovative methods of analyzing data and 
leveraging the experiences of others working on pandemic relief efforts 
across the inspector general community. These added outreach efforts 
will likely result in an increase in reporting of suspected 
mismanagement and indicators of criminal activity related to DOT-
disbursed COVID-19 funds.
    Our experience with the rapidly dispersed ARRA stimulus funds 
resulted in 24 investigations, 57 indictments, and 49 convictions 
representing over 38 years of incarceration and $85 million in 
restitution, recoveries, forfeitures and fines. For example, one 
investigation revealed that from 2004 to 2010, a CEO of an FTA grantee 
conspired and embezzled Federal ARRA funds. The CEO was sentenced to 30 
months of incarceration, 36 months of supervised release, and $1.3 
million in restitution. It will also be essential for DOT, when 
notified of wrongdoing by grantees or contractors, to take timely 
action to suspend andor debar these individuals or firms that have 
defrauded the Government or are otherwise known to be irresponsible. By 
doing so, the Department can help protect other Federal programs from 
fraud and other wrongdoing by the same individuals and entities. Timely 
action in response to indications of fraud will better protect against 
misuse of public funds by fraudulent or unethical firms or individuals 
in the future.
                               Conclusion
    COVID-19 has had a wide-reaching impact on the transportation 
industry and our economy. In response, DOT has taken quick action to 
distribute COVID relief funds and implement requirements established by 
the CARES, CRRSA, and ARP acts. Our office is committed to assisting 
the Department in its efforts to maximize the efficacy of these funds 
and meet its mission in these exceptional times. By maintaining focus 
on the most significant risk areas and establishing robust internal 
controls, DOT can spend COVID relief funds effectively, prevent fraud, 
waste, and abuse, ensure compliance with the law, and carry out its 
safety mission. Meeting these goals will maximize the value of taxpayer 
dollars during this critical time.
    In fulfillment of our own responsibilities pertaining to these 
funds, we will announce future work related to COVID oversight as 
needed and continue to deter and pursue wrongdoers who target COVID 
spending. We look forward to continuing to work with DOT in support of 
our shared goal to safeguard these critical funds from fraud, waste, 
and abuse and sustain our ongoing economic recovery.
    This concludes my prepared statement. I will be happy to answer any 
questions you or other Members of the Committee may have.
    Exhibit A. COVID-19 Relief Funds Provided to the Department of 
                   Transportation, as of July 6, 2021

       Coronavirus Aid, Relief, and Economic Security (CARES) Act
------------------------------------------------------------------------
                    DOT Agency                         Funds Provided
------------------------------------------------------------------------
Federal Aviation Administration...................       $10,025,000,000
Federal Transit Administration....................       $25,000,000,000
Federal Railroad Administration...................        $1,018,250,000
Office of the Secretary of Transportation.........           $57,753,000
Federal Motor Carrier Safety Administration.......              $150,000
Maritime Administration...........................            $4,134,000
Office of Inspector General.......................            $5,000,000
                                                   ---------------------
  Total Amount Provided by the CARES Act..........       $36,110,287,000
------------------------------------------------------------------------



 Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act
------------------------------------------------------------------------
                    DOT Agency                         Funds Provided
------------------------------------------------------------------------
Federal Aviation Administration...................        $2,000,000,000
Federal Highway Administration....................       $10,000,000,000
Federal Transit Administration....................       $14,000,000,000
Federal Railroad Administration...................        $1,000,000,000
Office of the Secretary of Transportation.........           $23,332,000
                                                   ---------------------
  Total Amount Provided by the CRRSA Act..........       $27,023,332,000
------------------------------------------------------------------------



                     American Rescue Plan (ARP) Act
------------------------------------------------------------------------
                    DOT Agency                         Funds Provided
------------------------------------------------------------------------
Federal Aviation Administration...................        $8,009,000,000
Federal Transit Administration....................       $30,461,356,000
Federal Railroad Administration...................        $1,700,000,000
Office of the Secretary of Transportation.........        $3,000,000,000
                                                   ---------------------
  Total Amount Provided by the ARP Act............       $43,170,356,000
------------------------------------------------------------------------

           Source: DOT Office of the Chief Financial Officer

  Exhibit B. Red Flag Indicators for Common Fraud Schemes and How To 
                         Report Suspected Fraud
    The following pages include brief descriptions of selected fraud 
schemes commonly seen on transportation projects, along with sample 
``red flag'' indicators for each scheme. It is important to note that 
the presence of one or more indicators does not prove fraud and that 
the indicators shown are not all-inclusive for each of the schemes 
described.
Bid Rigging and Collusion
    In bid rigging and collusion schemes, contractors misrepresent the 
competition against each other when, in fact, they agree to cooperate 
on the winning bid to increase job profit. Watch for:
      Unusual bid patterns: too close, too high, rounded 
numbers, or identical winning margins or percentages.
      Different contractors making identical errors in contract 
bids.
      Bid prices dropping when a new bidder enters the 
competition.
      Rotation of winning bidders by job, type of work, or 
geographic area.
      Losing bidders hired as subcontractors.
      Apparent connections between bidders: common addresses, 
personnel, or phone numbers.
      Losing bidders submitting identical line item bid amounts 
on nonstandard items.

Materials Overcharging
    In materials overcharging schemes, a contractor misrepresents how 
much construction material was used on the job and is then paid for 
excess material to increase job profit. Watch for:
      Discrepancies between contractor-provided quantity 
documentation and observed data, including yield calculations.
      Refusal or inability to provide supporting documentation.
      Contractor consistently loading job materials into 
equipment away from inspector oversight.
      Truck weight tickets or plant production records with 
altered or missing information.
      Photocopies of quantity documentation where originals are 
expected.
      Irregularities in color or content of weight slips or 
other contractor documents used to calculate pay quantities.

Time Overcharging
    In a time overcharging scheme, a consultant misrepresents the 
distribution of employee labor on jobs in order to charge for more work 
hours or a higher overhead rate, to increase profit. Watch for:
      Unauthorized alterations to time cards and other source 
records.
      Billed hours and dollars consistently at or near budgeted 
amounts.
      Time cards filled out by supervisors, not by employees.
      Photocopies of timecards where originals are expected.
      Inconsistencies between a consultant's labor distribution 
records and employee timecards.

Product Substitution
    In product substitution schemes, a contractor misrepresents the 
product used in order to reduce costs for construction materials. Watch 
for:
      Any mismarking or mislabeling of products and materials.
      Contractor restricting or avoiding inspection of goods or 
service upon delivery.
      Contractor refusing to provide supporting documentation 
regarding production or manufacturing.
      Photocopies of necessary certification, delivery, and 
production records where originals are expected.
      Irregularities in signatures, dates, or quantities on 
delivery documents.
      High rate of rejections, returns, or failures.
      Test records reflect no failures or a high failure rate 
but contract is on time and profitable.
      Unsigned certifications.

Disadvantaged Business Enterprises (DBE) Fraud
    In disadvantaged business enterprises schemes, a contractor 
misrepresents who performed contract work in order to appear to be in 
compliance with contract goals for involvement of minority or women-
owned businesses. Watch for:
      Minority owner lacking background, expertise, or 
equipment to perform subcontract work.
      Employees shuttling back and forth between prime 
contractor and minority-owned business payrolls.
      Business names on equipment and vehicles covered with 
paint or magnetic signs.
      Orders and payment for necessary supplies made by 
individuals not employed by minority-owned business.
      Prime contractor facilitated purchase of minority-owned 
business.
      Minority-owned business owner never present at job site.
      Prime contractor always uses the same minority-owned 
business.

Quality-Control Testing Fraud
    In quality-control testing schemes, a contractor misrepresents the 
results of quality control (QC) tests to falsely earn contract 
incentives or to avoid production shutdown in order to increase profits 
or limit costs. Watch for:
      Contractor employees regularly taking or labeling QC 
samples away from inspector oversight.
      Contractor insisting on transporting QC samples from the 
construction site to the lab.
      Contractor not maintaining QC samples for later quality 
assurance (QA) testing.
      Contractor challenging results, or attempting to 
intimidate QA inspectors who obtain conflicting results.
      Photocopies of QC test results where originals are 
expected.
      Alterations or missing signatures on QC test results.

Bribery
    In bribery schemes, a contractor compensates a government official 
to obtain a contract or permit contract overcharges. Watch for:
      Other government inspectors at the job site noticing a 
pattern of preferential contractor treatment.
      Government official having a lifestyle exceeding his/her 
salary.
      Contract change orders lacking sufficient justification.
      Oversight officials socializing with or having business 
relationships with contractors or their families.

                              Source: OIG

    Mr. DeFazio. OK, I thank the gentleman.
    And last would be Mr. James Izzard, assistant inspector 
general for investigations, Department of Homeland Security.
    Mr. Izzard. Chairman DeFazio, Ranking Member Graves, and 
members of the committee, thank you for inviting me here today 
to discuss OIG's oversight of FEMA's response to the COVID-19 
pandemic.
    The CARES Act provided DHS OIG $3 million in supplemental 
funding to conduct oversight of the nearly $50 billion of 
COVID-19 relief. DHS OIG is strategically initiating work to 
have the highest impact to help improve DHS programs and 
operations.
    Since January 2020, DHS OIG has received more than 6,000 
complaints, and initiated 120 investigations related to COVID-
19. We continue to investigate COVID-19 fraud perpetrated by 
companies and individuals seeking to exploit DHS-affiliated 
Government programs, including relief programs that FEMA 
administers.
    A number of our open investigations are under review for 
possible criminal prosecution by U.S. attorneys offices 
nationwide. Since the passage of the CARES Act, we have been at 
the forefront to detect, deter, and investigate COVID-19 fraud 
perpetrated against DHS and its components through our 
participation in working groups, coordination with FEMA and the 
PRAC, and leveraging the expertise of our professional staff to 
identify and investigate fraud schemes.
    For example, on February 3, 2021, as a result of an 
investigation we worked jointly with the VA OIG, the FBI, and 
the U.S. Attorney's Office for the Eastern District of 
Virginia, a defendant pleaded guilty to wire fraud, theft of 
Government funds, and making false statements. The 
investigation determined that the defendant repeatedly and 
falsely claimed to Federal officials that he was in possession 
of large quantities of PPE, including N95 masks.
    Based on the defendant's statements, VA and FEMA awarded 
his company contracts for more than $38 million to deliver 6.5 
million N95 masks. The VA intended to use the PPE to protect 
employees and patients at VA facilities, and FEMA intended to 
procure the N95 masks for the national stockpile. Despite the 
defendant's claims, he failed to supply any PPE or N95 masks to 
the Federal Government. On June 16, 2021, the defendant was 
sentenced to 21 months incarceration, and nearly $349,000 in 
restitution.
    In another instance, we led a task force that used data 
analytics to identify a major facilitator of fraudulent 
unemployment insurance claims. In November 2020, DHS OIG 
determined the individual and her co-conspirators were involved 
in facilitating close to a half million dollars in fraudulent 
unemployment insurance benefits, which included fraudulently 
using the identities of State prisoners.
    On April 8, 2021, the United States Attorney's Office for 
the Eastern District of Virginia issued a nine-count indictment 
charging four defendants with conspiracy to commit fraud in 
connection with major disaster benefits.
    Recognizing the magnitude and potential of these fraud 
schemes related to FEMA and unemployment insurance programs, we 
designated a team of special agents to investigate major 
unemployment insurance facilitated fraud schemes involving FEMA 
funds. Over the last 10 months, this team has executed 15 
search warrants and seizures, recovered $3 million, and 
realized 10 judicial actions. Our team continues to open new 
investigations nationwide that will likely yield high-impact 
results.
    In addition, since March 2020, we have initiated nine new 
audits related to CARES Act funds and FEMA's response to COVID-
19, including audits of FEMA's Federal coordination efforts and 
medical supply chain. We look forward to reporting the results 
of those audits when they are complete.
    Earlier this month, we completed an audit that was 
initiated in 2019, and is directly relevant to FEMA's ability 
to deliver crucial supplies in response to the pandemic. We 
found FEMA personnel didn't always take the necessary steps to 
ensure prospective contractors could deliver goods and services 
during compressed disaster response timeframes. Between March 
and May 2020, FEMA awarded and canceled at least 22 contracts, 
valued at $184 million, for crucial supplies in response to the 
national COVID-19 pandemic. We made one recommendation to FEMA, 
which is currently open.
    Thank you again for Congress' continued funding for our 
mission, which supports our robust oversight of the Department 
to help make its programs and operations more efficient and 
effective.
    Mr. Chairman, this concludes my testimony. I am happy to 
answer any questions you or other members of the committee may 
have.
    [Mr. Izzard's prepared statement follows:]

                                 
 Prepared Statement of James Izzard, Jr., Assistant Inspector General 
        for Investigations, U.S. Department of Homeland Security
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee:
    Thank you for the opportunity to discuss the Department of Homeland 
Security, Office of Inspector General's (OIG) critical oversight of the 
Federal Emergency Management Agency's (FEMA) preparedness, response, 
and recovery efforts related to the coronavirus (COVID-19) pandemic. 
Since the beginning of the pandemic, we have provided significant and 
timely information about the Department and its COVID-19 response 
through our audits, inspections, evaluations, and investigations. We 
are committed to transparency and keeping you and your fellow Members 
of Congress fully informed of our findings and recommendations.
    Annually, DHS OIG provides taxpayers with a substantial return on 
their investment. Each fiscal year DHS OIG issues hundreds of 
recommendations to improve the integrity, accountability, and 
performance of the Department. In FY 2020, DHS OIG identified 
$7,500,553,271 in questioned costs and funds put to better use through 
audits and inspections. In FY 2020, DHS OIG achieved more than $1.1 
million in recoveries, $389,000 in fines, and more than $15.3 million 
in restitutions.
    The DHS Inspector General (IG) is one of nine statutory IGs who are 
members of the Pandemic Response Accountability Committee (PRAC), 
created by Congress through the Coronavirus Aid, Relief, and Economic 
Security (CARES) Act. We closely coordinate with the PRAC, as 
appropriate, to share model practices and enhance our effectiveness.
    The CARES Act provided DHS $45.9 billion for COVID-19 relief and 
provided DHS OIG $3 million in supplemental funding, through a transfer 
from the Disaster Relief Fund (DRF), to conduct oversight of those 
funds. Given this funding and the range of associated mandates, DHS 
adopted a layered response to deliver critical supplies and services. 
FEMA, along with other Federal partners, is the DHS component 
responsible for managing the Federal Government's COVID-19 pandemic 
response.\1\ On August 8, 2020, then-President Trump authorized FEMA to 
expend up to $44 billion from the DRF for lost wage payments.\2\
---------------------------------------------------------------------------
    \1\ ``The Federal Emergency Management Agency's Response to COVID-
19 and Other Challenges.'' Statement of Robert Fenton, Senior Official 
Performing the Duties of the Administrator, FEMA. April 14, 2021. See 
also, ``Known for Disaster Aid, FEMA Prepares for New Challenge with 
Coronavirus Relief'', NPR, March 19, 2020.
    \2\ Presidential Memoranda, Memorandum on Authorizing the Other 
Needs Assistance Program for Major Disaster Declarations Related to 
Coronavirus Disease 2019, August 8, 2020.
---------------------------------------------------------------------------
    On December 27, 2020, the Consolidated Appropriations Act first 
required FEMA to provide funeral assistance through its Individual and 
Household Programs for deaths related to the COVID-19 pandemic. The Act 
provided $2 billion to reimburse funeral expenses incurred through 
December 31, 2020, at a 100 percent Federal cost share. On March 11, 
2021, President Biden signed the American Rescue Plan Act (ARPA), which 
appropriated $50 billion to FEMA for costs associated with major 
disaster declarations, including for funeral assistance and did not 
limit the date for expenses incurred.\3\ As of July 12, 2021, FEMA has 
provided over $606 million to more than 91,000 people to assist with 
COVID-19-related funeral costs for deaths occurring on or after January 
20, 2020.\4\ DHS OIG did not receive an additional allocation to 
oversee those monies, but nonetheless, we initiated work to oversee 
FEMA's funeral assistance efforts, as described below.
---------------------------------------------------------------------------
    \3\ American Rescue Plan Act of 2021, P.L. 117-2.
    \4\ FEMA press release HQ-21-134, July 12, 2021.
---------------------------------------------------------------------------
                             Investigations
    Since January 2020, DHS OIG has received a substantial number of 
COVID-19 fraud complaints nationwide and continues to investigate fraud 
perpetrated by companies and individuals seeking to exploit DHS-
affiliated government programs, including relief programs that FEMA 
administers. To date, DHS OIG has received more than 6,000 complaints 
and initiated 120 investigations. Many of our investigations involve 
individuals who have also attempted to defraud other COVID-19 programs.
    Since the passage of the CARES Act, DHS OIG has been at the 
forefront to detect, deter, and investigate COVID-19 fraud perpetrated 
against DHS and its components through our participation on working 
groups, coordination with FEMA, and reliance on the expertise of our 
professional staff.
    Our special agents participate in various working groups and task 
forces at the local, state, and regional level. This includes 
partnering with the Small Business Administration (SBA) OIG, Department 
of Labor OIG, Veterans Affairs OIG, United States Postal Inspection 
Service, Homeland Security Investigations (HSI), United States Secret 
Service, Federal Bureau of Investigation (FBI), and United States 
Attorney's Offices.
    We also participate in national working groups and task forces 
including the:
      Department of Justice (DOJ) Stimulus Funds Fraud Working 
Group;
      COVID-19 Fraud Enforcement Task Force;
      National Unemployment Insurance Fraud Task Force;
      DOJ Procurement Collusion Strike Force;
      DOJ Grant Fraud Working Group; and
      PRAC.

    We interface with FEMA through a joint Fraud Working Group. That 
Fraud Working Group provides fraud training, including indicators and 
fraud scheme awareness, that is tailored to assist FEMA employees with 
preventing and reporting suspected fraud. With respect to FEMA's 
funeral assistance program, DHS OIG special agents are actively and 
independently collaborating with FEMA to facilitate early detection of 
fraud.
    DHS OIG also developed an innovative approach to enhance the way we 
identify COVID-19 fraud schemes. Our team of special agents, forensic 
accountants, analysts, digital forensic examiners, and data scientists 
provides a multidisciplinary approach to analyzing large and complex 
data sets to identify fraud indicators and develop investigative leads. 
Using its expertise and a suite of cutting-edge data analytics tools, 
along with support from other Federal, state, and local partners, DHS 
OIG has uncovered complex, multi-million-dollar fraud schemes involving 
FEMA personal protective equipment (PPE) contracts and facilitators of 
major unemployment insurance fraud schemes involving FEMA funds. Over 
the last 10 months, our team has executed 15 search warrants and 
seizures, recovered $3 million, and realized 10 judicial actions, and 
our team continues to open new investigations that will likely yield 
high-impact results. We also developed an analytical dashboard to 
identify fraudulent FEMA vendors who were contracted to provide PPE for 
the National Stockpile. We have shared our model practice with the 
Inspector General community and through the PRAC.
    In addition, we established an internal COVID-19 fraud 
investigation team dedicated to identifying and investigating 
unemployment insurance fraud. This team is comprised of geographically 
dispersed agents who conduct high impact COVID-19 fraud investigations 
nationwide. In addition to investigating fraud associated with FEMA 
COVID-19 funding, these agents coordinate with task forces, working 
groups, and United States Attorney's Offices nationwide.
    Examples of our high-impact FEMA COVID-19 fraud investigations 
include:
Personal Protective Equipment Contract Fraud
    On February 3, 2021, the Chief Executive Officer (CEO) of Federal 
Government Experts, LLC (FGE) pleaded guilty to making false 
statements, wire fraud, and theft of government funds. The 
investigation determined the CEO repeatedly, and falsely, claimed to 
contracting officials from FEMA and Veteran's Affairs (VA) that he was 
in possession of large quantities of PPE, including N95 masks.
    Based on the CEO's statements, FEMA and the VA awarded FGE 
contracts to deliver more than 6 million N95 masks for a total cost of 
$38.5 million. FEMA intended to procure the N95 masks for the National 
Stockpile, and the VA intended to use the PPE to protect employees and 
patients at various VA facilities. Despite the CEO's claims, FGE failed 
to supply any PPE to FEMA and the VA. Ultimately, it was determined 
that the company was never in possession of large quantities of PPE or 
N95 masks despite the CEO's fraudulent claims.
    In addition, it was determined the CEO applied for various loans on 
behalf of FGE under the Federal Payroll Protection Program (PPP) and 
the Economic Injury Disaster Loan (EIDL) Program. The loan applications 
submitted by the CEO falsely stated the number of FGE employees and the 
amount of FGE's payroll. Specifically, the CEO claimed FGE had 37 
employees when, in fact, the company had 9. The CEO also claimed he had 
a monthly payroll of $322,000 when, in fact, FGE's monthly payroll was 
$13,907. FGE was awarded PPP and EIDL loans in the amount of $1.06 
million. On June 16, 2021, the CEO was sentenced to 21 months in 
Federal prison, with 3 years of supervised release, and paid $348,714 
in restitution.
Lost Wages Assistance Fraud
    In November 2020, DHS OIG determined that an individual and her co-
conspirators fraudulently acquired $436,834 in FEMA Unemployment 
Insurance (UI) benefits, which included using the identities of state 
prisoners. On April 8, 2021, the United States Attorney's Office for 
the Eastern District of Virginia issued a nine-count indictment 
charging four defendants with conspiracy to commit fraud in connection 
with major disaster benefits, fraud in connection with major disaster 
benefits, and mail fraud. One of the defendants pleaded guilty on June 
24, 2021, and is scheduled to be sentenced in October 2021. Judicial 
outcomes regarding the three co-defendants are pending.
    In a similar scheme, an individual pleaded guilty on June 11, 2021 
to mail fraud for her role in fraudulently obtaining FEMA unemployment 
benefits for 22 prison inmates. With the assistance of an inmate co-
conspirator, the individual used the identities of prisoners to file 
fraudulent UI claims to collect at least $223,984 in unemployment 
benefits.
    We continue to build and maintain relationships with our Federal, 
state, and local law enforcement counterparts and to use data analytics 
to identify significant fraud rings that impacted FEMA's Lost Wages 
Assistance Program. Given our current limited funding, we are focusing 
on Federal, state and local partners in areas most heavily impacted by 
unemployment insurance fraud. As we identify new fraud schemes, the 
number of cases will continue to grow.
                                 Audits
    Between 2014 and 2017, DHS OIG issued three reports on DHS' 
readiness to continue mission essential functions during a pandemic. In 
FY 2014, we reported \5\ that DHS did not adequately assess its needs 
before purchasing pandemic preparedness supplies and did not 
effectively manage its stockpile of pandemic PPE and antiviral medical 
countermeasures. In FY 2016, we reported \6\ DHS did not ensure 
sufficient coordination, adequate training, and consistent screening of 
people arriving at U.S. ports of entry during its response to Ebola. In 
FY 2017, we reported \7\ that DHS may not be able to effectively 
execute its preparedness plans during a pandemic. In total, we made 28 
recommendations and those recommendations are closed. In FY 2021, we 
conducted a verification review of DHS' efforts to determine the 
adequacy and effectiveness of DHS' corrective actions to our prior 
recommendations.\8\ While the Department provided adequate 
documentation of its initial plans and actions to address the 28 
recommendations, DHS did not effectively implement corrective actions 
to address three recommendations intended to provide operational 
efficiencies and controls needed in the current pandemic. We made three 
recommendations to ensure we improved department-wide oversight of PPE 
and pandemic planning. The Department concurred with the three 
recommendations and they remain open.\9\
---------------------------------------------------------------------------
    \5\ DHS Has Not Effectively Managed Pandemic Personal Protective 
Equipment and Antiviral Medical Countermeasures (OIG-14-129).
    \6\ DHS' Ebola Response Needs Better Coordination, Training, and 
Execution (OIG-16-18).
    \7\ DHS Pandemic Planning Needs Better Oversight, Training, and 
Execution (OIG-17-02).
    \8\ Ineffective Implementation of Corrective Actions Diminishes 
DHS' Oversight of Its Pandemic Planning (OIG-21-14).
    \9\ A recommendation is considered open when agreed-upon corrective 
action has not been implemented. A recommendation is resolved when the 
Component management official and OIG agree on (1) the reported 
findings and recommendations, (2) the corrective actions to be taken, 
and (3) where appropriate, target completion dates.
---------------------------------------------------------------------------
    We recently completed an audit that is directly relevant to FEMA's 
ability to deliver crucial supplies in response to COVID-19 but was 
initiated prior to the COVID-19 pandemic: FEMA Must Strengthen Its 
Responsibility Determination Process (OIG-21-44). We conducted this 
audit to determine whether FEMA contracting personnel followed Federal 
regulations, DHS policies, and FEMA procedures when awarding disaster 
response contracts. We found FEMA contracting personnel did not always 
take the necessary steps to ensure prospective contractors could 
deliver goods and services during compressed disaster response 
timeframes. As a result of inadequate guidance, FEMA personnel awarded 
contracts without making fully informed determinations as to whether 
prospective contractors could meet contract demands. Between March and 
May 2020, FEMA awarded and canceled at least 22 contracts, valued at 
$184 million, for crucial supplies in response to the national COVID-19 
pandemic. By awarding contracts without ensuring prospective 
contractors can meet contract demands, FEMA will continue wasting 
taxpayer dollars and future critical disaster and pandemic assistance 
will continue to be delayed. We made one recommendation to strengthen 
FEMA's responsibility determination process. FEMA concurred with our 
recommendation and it remains open.
    In the early days of the COVID-19 pandemic, DHS OIG identified the 
need to collect data before launching audit work in this unprecedented 
area. Therefore, in March 2020, DHS OIG began gathering DHS and the 
U.S. Department of Health and Human Services (HHS) pandemic response 
data in real time. We observed daily and semi-weekly interagency 
conference calls hosted by FEMA and HHS officials and monitored FEMA 
and HHS' daily national COVID-19 situation reports. OIG used this 
information to inform ongoing and proposed projects related to the 
pandemic.
    Since June 2020 our auditors have been monitoring FEMA's use of 
CARES Act funds in addition to FEMA's vaccine support role. Our 
auditors participate with Federal, state, and local oversight officials 
on various working groups, including the PRAC and the National 
Association of State Auditors, Comptrollers and Treasurers' COVID-19 
Accountability Work Group, to coordinate oversight work across local, 
state, and Federal agencies and to identify issues related to the 
administration of CARES Act and the ARPA funding. Finally, our Office 
of Audits is actively involved in DHS OIG's Disaster Relief Working 
Group, which focuses on our COVID-19 oversight work. This group 
collectively identifies common oversight issues and facilitates 
coordination and deconfliction.
    Since March 2020, we have initiated nine new audits related to 
FEMA's response to COVID-19, including audits of FEMA's Federal 
coordination efforts and medical supply chain. Our ongoing audits of 
FEMA's COVID-19 response include:
      FEMA's Federal Medical Supply Chain in Response to COVID-
19: Our objective is to determine to what extent FEMA managed and 
distributed medical supplies and equipment in response to COVID-19.
      FEMA's Federal Coordination Efforts in Response to COVID-
19: Our objective is to determine how effectively FEMA supports and 
coordinates Federal efforts to distribute PPE and ventilators in 
response to the COVID-19 outbreak.
      FEMA Emergency Food and Shelter Program (EFSP) 
Administration of CARES Act Funding: Our objective is to determine 
whether FEMA is administering CARES Act funding for the EFSP in 
accordance with Federal requirements to meet program goals.
      FEMA's Response to Declaration Requests for States, 
Tribes, and Territories: Our objective is to determine whether FEMA 
follows its policies and procedures consistently when responding to 
state, tribal, and territorial declaration requests.
      FEMA's Controls of Mission Assignments in Response to 
COVID-19: Our objective is to determine to what extent FEMA develops 
and oversees mission assignments for COVID-19 in accordance with FEMA's 
policies and procedures.
      FEMA's Disaster Relief Fund for Lost Wages Assistance to 
DHS Employees: Our objective is to determine to what extent eligible 
DHS employees received FEMA's DRF for supplemental state lost wages 
assistance.
      FEMA's DRF Lost Wages Assistance to States and 
Territories: Our objective is to determine to what extent FEMA ensured 
states and territories distributed supplemental state lost wage 
assistance from the DRF to eligible recipients.
      FEMA's Funeral Assistance for COVID-19: Our objective is 
to determine how effective FEMA's policies, procedures, and internal 
controls are in providing proper oversight of its funeral assistance 
program for COVID-19.
      FEMA's Workforce Management during Concurrent Events: Our 
objective is to determine whether FEMA is effectively planning, 
managing, and deploying its workforce to successfully respond to 
concurrent and consecutive disasters and emergencies, including 
assisting other DHS components or Federal agencies.

    We look forward to reporting the results of these audits when they 
are complete.
    Our oversight of the Department and its components would not be 
possible without the continued, bipartisan support from Congress that 
we have received for our budget requests. Because of that support, we 
expanded our ability to obtain and analyze a growing volume of digital 
forensic evidence, initiated efforts to modernize our information 
technology infrastructure, and we augmented our program and support 
staff to enhance our effectiveness. For example, we hired experts to 
help us improve our business information systems, improve the strength 
of our processes, and increase the efficiency of our workforce. In 
addition, we hired additional special agents in our Major Frauds and 
Corruption Unit to expand our ability to combat COVID-19 fraud. 
Congress' support has directly enhanced our ability to promote 
accountability and deter future fraud against DHS and its programs.
    Thank you for the opportunity to discuss the important work of DHS 
OIG and our continued oversight of the Department and FEMA's COVID-19 
response. This concludes my testimony, and I look forward to answering 
any questions you may have.

    Mr. DeFazio. Thank you for that. We will now proceed to 
questions to the first panel, and I think I will start with 
you, Mr. Izzard.
    Congratulations on the fraud you identified. Obviously, 
part of the problem was the lack of stockpile and preparedness 
that DHS had. And then, as I understand, some of the stockpile 
was outdated, proved to be otherwise not usable. Where are we 
at now?
    We are looking now--we are wearing masks again. That is 
just the Delta variant. Who knows what Epsilon, or Foxtrot, or 
whatever the next two are going to be. Where are we at in doing 
a better job of having a stockpile, so we don't have to go out 
for bids to unknown, specious vendors, and get ripped off?
    Mr. Izzard. Thank you for that question, sir. As mentioned, 
we have a number of ongoing projects that are looking at FEMA's 
readiness and preparedness to handle the pandemic. They are 
ongoing. And I would really be happy to take that back as a 
get-back, to make sure that we provide you a specific and 
detailed response to answer your question.
    Mr. DeFazio. I would appreciate that. I have read recently 
that we are now sourcing the N95s in the United States, which 
would be greatly preferable.
    I got involved--there was a gentleman in Texas who had--
when 3M abandoned the U.S. to go get cheap labor in China, they 
abandoned a plant, and this gentleman bought it, and he was 
running it with just one line, because he didn't have a lot of 
business, and then he wanted to ramp it up, but it took quite a 
bit of convincing and cajoling to get FEMA to work with him, as 
opposed to all this stuff we were trying to fly in from China.
    So I would like to get an update on that.
    And then I also--for Mr. Currie--no, that is all right, we 
have covered that.
    I had another question here.
    Well, if you could all just sort of generally give a 30-
second--in the areas which you oversee, a 30-second summary of 
what we can do to make this better in the future, and answer 
whether or not it requires specific changes in authorization or 
authority by Congress, or if this has all been internal to the 
bureaucracies and the Federal administrative rules.
    I know that is a lot to say, but give it a try. So we would 
start with the first panelist. That would be Michael Horowitz.
    Mr. Horowitz. Mr. Chairman, just a couple of things. I do 
think that work can continue to be done, as you referenced 
earlier, to advance transparency, to ensure that all 
information, all data is getting out there about how money has 
been spent, and where it has been spent, and to whom the money 
has gone to.
    We also think additional controls need to be put in place, 
and we have been working over the last many months with OMB 
leadership, and with the ARP implementation team leadership to 
do that.
    In terms of additional efforts that could be done from a 
congressional standpoint, or legislative standpoint, I think 
some of the needs of various programs, to ensure that they are 
taking the steps they are legally allowed to take with regard 
to, for example, data matching, and identity theft, that those 
agencies can undertake those efforts to try and address what 
are pretty substantial concerns in both of those spaces.
    Mr. DeFazio. OK, thank you.
    Ms. Krause?
    Ms. Krause. Sure. Yes, I would say there is a mix of things 
that both can be done when you are setting up programs in the 
future, as well as things that can still be handled on an 
ongoing basis, as we continue to respond.
    We identified some lessons learned, so coordinating, and 
identifying, defining roles and responsibilities when you are 
setting up the programs, and also as you are executing things, 
providing clear and consistent communication. I think we saw 
some challenges with that, with some of the program 
implementation.
    But there are opportunities, as, say, Treasury rolls out 
the CERTS Program, and FAA rolls out the Aviation Manufacturing 
Jobs Protection Program to sort of improve communications, and 
provide clear and consistent communications.
    I think, again, establishing strong accountability and 
transparency mechanisms, those are things that, I think, as you 
heard from the panel today, a lot of us are continuing to look 
at, and audit, and oversee as agencies begin to set those up.
    Mr. DeFazio. OK, thank you. And then Mr. Izzard?
    Mr. Izzard. Thank you, sir, for the question. I would echo 
the comments of my fellow panel members, except just to add, 
again, to really highlight what we believe is important, is 
accountability and transparency in the programs and processes.
    From an oversight perspective, we continue to allow our 
existing work to inform our future work. So, as we continue to 
learn more things in our existing work, I think that will help 
to tell us where we go next.
    As well as maintaining collaboration with FEMA, we do 
currently have collaborative efforts with FEMA within the lanes 
of our mission space, to ensure that they are able to detect 
fraud, and understand what types of things that we need to look 
for in their programs. So that is, I think, how we would answer 
that, from a DHS OIG perspective.
    Mr. DeFazio. OK, thank you. My time has expired.
    OK, I recognize Representative Webster for 5 minutes.
    [Pause.]
    Mr. Webster. Thank you, Chair. I have a question, I think, 
of Mr. Horowitz, and that is, do you think that, if there is--I 
don't know if you investigated the fact that the money may have 
been spent properly, it may have been the right price at the 
right time, so forth, but if the science was flawed, would that 
have affected something that you might ask, in that we are 
buying things, but we don't even need to buy them?
    Was there anything in your reports or any of the things 
that you did that would distinguish between right and wrong in 
that area?
    Mr. Horowitz. Congressman, we wouldn't generally look at 
trying to assess that kind of a question. Our HHS OIG, Health 
and Human Services inspector general, has done a fair amount of 
work on the healthcare-related issues, and I can certainly 
follow up with her in that office to see if there is anything 
in particular that would address your question. But I am not 
aware of it, as I sit here today.
    Mr. Webster. Yes, well, for 60 years there has been an 
acceptance of some flawed information that has been proven 
flawed in the last month or so, dealing with the size of 
particles, and are they airborne, an aerosol, or are they 
droplets that fall to the ground.
    So there were, literally, millions of these [indicating 
hand sanitizer bottle] bought by who knows who, everybody. And 
there was a bunch of dots that are on the ground--some of them 
are still out there--to keep 5 to 6 feet of distance between 
other people. All of that, basically, if this disease was 
carried from air particles, would be flawed, in that we would 
have spent millions, maybe billions of dollars on things that 
really didn't do any good, and it has been proven in this 
report that came out a couple of weeks ago from Linsey Marr, 
who is an aerosol scientist at Virginia Tech, but also is one 
of the few people in the world who is also studying infectious 
diseases.
    So in the end, we ended up buying things that may have been 
the right price, we just didn't need them. And I just wondered 
if there is--I mean, that may be just as fraudulent as charging 
too much for some sanitizer.
    [Pause.]
    Mr. Webster. So I guess my question would be is there 
anything in the future that you might be looking at that would 
also make sure that what we are buying is what we need?
    Mr. Horowitz. Well, I will say, Congressman, as an IG 
community, we do look at questions about whether what has been 
purchased is consistent with what is needed. Obviously, over 
time, as information is learned and issues come up, that could 
evolve. But it is certainly something that we would look at in 
the context of what has been purchased, generally.
    And I will just say, in terms of the website, 
PandemicOversight.gov, we are trying to put out there so that 
the public can see how money has been used, and where it has 
been used. Much of what we do, as inspectors general, is to get 
information out to the public, so that they can assess how that 
spending has occurred.
    Mr. Webster. Yes. Well, unfortunately, the bedrock of the 
science in every medical journal and medical book and doctors 
and their training, and so forth, stress hand washing, which is 
a good thing to do, and doesn't have anything to do with this, 
and distancing, in that the particles are--6 feet is enough 
distance. And therefore, that is OK.
    And so that was sort of the basis of all of the protection 
that was being done, including in this chamber. I remember 
telling some of the leadership, ``You don't have to be washing 
the doorknobs. It is in the air.'' But CDC and WHO were both 
saying, no, it is not, it gets into a droplet, falls to the 
ground, which was totally inaccurate, and has been proven 
false.
    I don't know, I just think we spent a lot of money on some 
things that didn't really need to be bought. But my time has 
run out, and I would love to discuss this further.
    I yield back.
    Mr. Larsen [presiding]. The Representative's time has 
expired. The Chair recognizes Congresswoman Norton for 5 
minutes.
    Ms. Norton. Mr. Chairman, can you hear me?
    Mr. Larsen. We can hear you, yes.
    Ms. Norton. I very much appreciate this hearing, as we try 
to focus on what we have learned for the future.
    My first question is for Inspector General Soskin. The 
District is Amtrak's hub, so I am particularly interested that 
Congress provided almost $4 billion in supplemental 
appropriations for Amtrak, in response to COVID-19 earlier this 
summer. You did an audit report on the Federal Railroad 
Administration's program of oversight of Amtrak's use of 
Federal funding. Your report found a range of problems at FRA: 
incomplete policies to assess Amtrak's adherence to programs, 
et cetera. You made several recommendations to FRA to improve 
its oversight.
    Can you describe FRA's response to your office's findings, 
and the specific steps it plans to take to implement the 
recommendations?
    Mr. Soskin. Yes, Representative Norton, I can.
    That audit report on FRA's oversight of Amtrak grant 
spending recognized in it its likely application, and the 
application of those recommendations to the future spending 
through CARES Act and other coronavirus relief funds that 
actually exceed the amount of grant funding that FRA typically 
administers for Amtrak.
    And we made several recommendations, which FRA has 
accepted, and is in the process of implementing, I believe, 
with target dates for closure later in 2021. Those 
recommendations include that they create measurable oversight 
goals and metrics for their oversight of Amtrak spending; that 
they create and develop policies and procedures by which they 
can track, on a comprehensive basis, the issues that are 
identified in their oversight, so that they don't just identify 
issues, and then those remain unaddressed by Amtrak; and 
relatedly, that they develop a more robust set of procedures to 
identify issues they identify that may need to be escalated to 
a higher level, to work with Amtrak to assure compliance with 
what has been identified in FRA's oversight.
    We believe that, if these recommendations are implemented, 
and implemented successfully, and executed upon, they will 
greatly assist FRA's oversight of those Amtrak supplemental 
funds in the COVID relief legislation.
    Ms. Norton. I appreciate that you set target dates, and 
that, apparently, these dates are being adhered to.
    My next question is for Mr. [sic] Krause of GAO.
    I am chair of the subcommittee that has just passed the 
transportation infrastructure bill. And the District, of 
course, has Metro, and is dependent on transit. So I am 
particularly interested in the billions in grant assistance to 
help transit agencies that Congress provided to manage their 
fiscal restraints.
    So, Mr. [sic] Krause, I would like to ask, how did the 
Federal Transit Administration perform in managing such a large 
influx of funds, and getting it to transit agencies in a timely 
manner?
    Ms. Krause. Thank you, Congresswoman Norton. This is 
actually Heather responding to your question, Heather Krause.
    So FTA, we found that they had some initial implementation 
challenges, because the use of funds was expanded beyond what 
they typically did. But when we have talked to transit 
agencies, they identified very few challenges that they have 
experienced in getting the funds.
    As it has been implemented, and as we get into the newer 
funds that have come out, there are more challenges at the 
local level, as they figure out how to allocate the funds among 
different entities at the local level.
    But otherwise, we have heard few challenges from the 
transit agencies, in terms of implementation. I know that our 
colleagues at the DOT IG are looking more closely at----
    Mr. Larsen. The gentlewoman's time has expired.
    The Chair recognizes Representative Davis of Illinois for 5 
minutes.
    Mr. Davis. Thank you, Mr. Chair. My first question would be 
to Mr. Horowitz.
    First off, I want to say thank you for the work that you 
and your team have done on a wide variety of issues that you 
and your team and this country has faced over the last few 
years.
    I do want to raise an issue that falls outside the realm of 
transportation and infrastructure, though. But you raised it in 
your testimony, and that is because it affects many of my 
constituents, including me, and it is the issue of unemployment 
insurance fraud.
    Does your committee have data on how many individuals were 
victims of identity theft during the pandemic, as it relates to 
attempts to defraud the unemployment insurance system, and how 
much money has the Federal Government been defrauded?
    Mr. Horowitz. Congressman, we have worked, the PRAC, 
closely with the IG at the Labor Department on these issues, 
and the Department of Labor OIG has done a lot of work in this 
space, and has made some estimates that the amount of fraud 
could be upwards of 10 percent at this point. But it is still 
unknown, I should emphasize, as we are investigating and 
looking at these issues.
    But one of the significant issues, as I mentioned, and as 
you referenced, has been identity theft, and the number of 
people that we have heard from have expressed concerns about 
having their identity stolen, of course. There are two 
problems, two very serious problems that arise from that, as 
you know. One is the program itself gets defrauded. But then, 
separately, you have the victim, whose identity has been used, 
who has to deal with the fallout from their credit, other 
issues, security clearances, perhaps, if you are a Federal 
employee, or employed in a sensitive position, and a number of 
challenges that arise as a result of that.
    And that is why we set up the Identity Fraud Working Group 
that we did, to try and tackle that problem.
    Mr. Davis. Well, thank you, Mr. Horowitz. As I mentioned, I 
was a victim myself, in my home State of Illinois. And after 
going through that ordeal, we tried to make sure that all of 
our constituents who were affected knew the right steps to take 
to protect themselves, and protect their families, and their 
own identity.
    But with that being said, sir, do you have any policy 
recommendations that you could lay out that might make it into 
any final report or recommendation?
    Mr. Horowitz. We have, as a community, put out some--
actually, the Labor Department IG and the SBA IG have public 
reports that they have recently issued on that, and certainly 
would be happy to send them to you. Much of it focused on what 
the agencies can do to both detect potential identity theft 
before it occurs, so stop it in its tracks, and then also, when 
it does occur, how to help victims of identity theft address 
those problems.
    So, for example, ensuring--and some of these are maybe 
obvious steps, but steps that--SBA OIG, for example, has 
recommended, with regard to the Economic Injury Disaster Loan 
Program, [inaudible] the importance, for example, of just 
maintaining and tracking identity theft complaints, processing 
information about identity theft, and helping to restore 
identity theft victims to their condition prior to the fraud, 
including stopping loan billing statements, preventing 
delinquency collections, taking what may seem like commonsense 
steps, but steps that aren't necessarily yet being done. And 
the IG there, and the IG at the Labor Department has also made 
recommendations that they are following up on. I am happy to--

    Mr. Davis. Thank you.
    Mr. Horowitz [continuing]. Talk with you further about 
that.
    Mr. Davis. Thank you. With that, you know, we tried to 
address the issue of unemployment in our initial funding given 
to States. Like, my home State of Illinois got $40 million to--
over $40 million, I believe to implement a pandemic 
unemployment insurance system to avoid some of these issues.
    Is there any work being done at the DOJ to investigate 
where those administrative fees might have gone, and what 
States could have done better to actually address identity 
theft on the front end, and unemployment fraud on the front 
end, since they got that administrative money before the 
pandemic unemployment insurance system was in place?
    Mr. Horowitz. That is an excellent question, and important 
question, Congressman. I would have to follow up with the 
Department on what they may be doing, investigatively, in that 
regard.
    But I do know, from working with and speaking with the 
Labor Department IG, and with our meetings that we have had 
ongoing with OMB leadership, that this an important area that 
the Labor Department IG has been following up on, and taking 
steps to look to address within the UI program, and that we 
have been raising consistently at the PRAC level, and are going 
to continue to try and move forward on to get the steps taken 
to try and address this very serious problem.
    Mr. Larsen. The Representative's time has expired. I now 
recognize myself for 5 minutes, and my first question is for 
Ms. Krause of the GAO.
    Since 2015, I have called for a National Aviation 
Preparedness Plan, following, in fact, your agency's 
recommendation from 2015. We have learned some lessons over the 
last year, and you have mentioned it in your testimony and 
report. Ms. Krause, could you elaborate on the GAO's 
recommendation for such a plan, and any new issues that ought 
to be addressed since your recommendation was released?
    Ms. Krause. Thank you, Mr. Larsen. We continue to advocate 
that this is something important that DOT needs to follow 
through on.
    Given how the pandemic rolled out at the beginning, I think 
it would have benefitted by having a National Aviation 
Preparedness Plan to more clearly outline roles and 
responsibilities, as well as airlines and airports have 
individual plans that can feed into a national plan, so that we 
are better prepared.
    Mr. Larsen. I note, as well, for maybe Mr. Currie, the 
joint testimony states the Department of Transportation 
maintains that the HHS and Homeland Security should lead the 
effort to develop a preparedness plan. Are those agencies in a 
position to work with DOT in developing a plan?
    Mr. Currie. Yes, sir. It is a good question. Those agencies 
are definitely more broadly responsible for national biodefense 
strategies, and so they should include those types of agencies, 
and work with them.
    But I totally agree that, in the space of the aviation 
environment, the Department of Transportation would be the one 
expected to take the lead on something like that, working with 
their industry. DHS and HHS just have too much to do across the 
board to focus in on every single industry.
    Mr. Larsen. Yes, thanks. I think we always saw, though, 
upon the announcement that, basically, U.S. citizens had to get 
back to the U.S., and were given very few days to do that--I 
think that was in February or March--clearly, DHS has a role, 
as Americans flooded immigration turnstiles throughout the 
country.
    So with this apparent conflict of agencies saying, ``It is 
not our job, it is their job, it is not our job, it is their 
job,'' is there a different agency--does the NSC, National 
Security Council, need to get heads together to make this 
happen?
    How do we get past the gridlock of finger-pointing at the 
bureaucracies? Have you thought through that, either Mr. Currie 
or Ms. Krause?
    Mr. Currie. This is Chris Currie, I can take that. 
Absolutely.
    So what we have been recommending for years, and what is 
being done right now is there has been a national biodefense 
strategy, even well before the pandemic, that is supposed to 
work across the entire Federal Government. And the Aviation 
Pandemic Plan would just be a piece of that, a sub-piece of 
that within the industry.
    So it is pretty well spelled out, who is responsible at the 
highest level. HHS and DHS have that broad authority to develop 
the strategy, and work with the White House and NSC, as you 
have said. But as I mentioned, I totally agree with Ms. Krause, 
that the Department of Transportation would have the lead in 
working specifically with their industry.
    Mr. Larsen. That is great. Thank you both very much.
    And just a reminder to Members, I have a bill to direct the 
DOT to develop a National Aviation Preparedness Plan, and would 
welcome cosponsors on that bill.
    Continuing on, Ms. Krause, I think it is page 17 of your 
testimony, and if you could just quickly address the Aviation 
Manufacturing Jobs Protection Program, which we approved in the 
American Rescue Plan, it has been set up, the first round of 
applications are in, DOT has reopened the application process 
through August 4th--I think I got the dates right.
    Have you started to look at the DOT's rollout of the 
application process, or will you wait a certain amount of time 
before GAO looks at the rollout of the plan?
    Ms. Krause. Yes, we have already begun work on that, in 
meeting with DOT and understanding how they are implementing 
the program, as well as talking to some of the industry 
associations to get a sense as to how the implementation has 
been going.
    I mean, initial conversations is they feel like the 
communication has been good from DOT with that program. But 
obviously, we will be following closely, and expect to report 
out on the status of that implementation later this fall, in 
October.
    Mr. Larsen. And one of your points in your report is that a 
lot of these programs were rolled out through existing 
mechanisms throughout the agencies. This was one program that 
sort of had to be created from whole cloth. Is it one of the 
things you are looking at, the compare-and-contrast of that, of 
those activities?
    Ms. Krause. Yes, certainly. I think what we found, as we 
have looked at all the different transportation programs, 
whether it is at Treasury or DOT, is if they are going through 
existing programs, that does help facilitate implementation.
    But when you are setting up new programs, or with entities 
that you don't typically either work with or have that kind of 
relationship with the agency, like DOT, or get this type of 
funding, typically, it is taking some time to get the program 
stood up, the guidelines out there, and then, obviously, some 
mechanisms on the back end to track the funds.
    Mr. Larsen. That is great. Thanks. My time has expired. I 
appreciate the answers from the both of you very much. And I 
now recognize Representative Massie of Kentucky for 5 minutes.
    Representative Massie.
    Mr. Massie. Thank you, Chairman Larsen. I would like to ask 
unanimous----
    Mr. Larsen. Mr. Massie, could you try your volume? And we 
will try on our end to increase your volume, as well, thank 
you.
    Mr. Massie. All right, can you hear me?
    Mr. Larsen. A little better, thank you, yes.
    Mr. Massie. All right, I would like to ask unanimous 
consent to submit to the record two articles from NPR. The 
first one is from August 5, 2020, titled, ``Foreign Workers 
Living Overseas Mistakenly Received $1,200 U.S. Stimulus 
Checks,'' and the second article is, ``IRS Says Its Own Error 
Sent $1,200 Stimulus Checks to Non-Americans Overseas.''
    Mr. Larsen. Without objection.
    [The information follows:]

                                 
Article entitled, ``Foreign Workers Living Overseas Mistakenly Received 
$1,200 U.S. Stimulus Checks,'' by Sacha Pfeiffer, NPR, August 5, 2020, 
             Submitted for the Record by Hon. Thomas Massie
    Foreign Workers Living Overseas Mistakenly Received $1,200 U.S. 
                            Stimulus Checks
by Sacha Pfeiffer

NPR, August 5, 2020
https://www.npr.org/2020/08/05/898903600/foreign-workers-living-
overseas-mistakenly-received-1-200-u-s-stimulus-checks

    Thousands of foreign workers who entered the U.S. on temporary work 
visas received $1,200 checks in error during the first round of 
stimulus payments, and many of them are spending the money in their 
home nations. One tax preparation firm told NPR that it has clients 
from 129 countries who mistakenly received stimulus checks, including 
Brazil, Canada, China, India, Nigeria and South Korea.
    Government officials and tax experts say the mistake happened 
because many foreign workers, whether unintentionally or on purpose, 
file incorrect tax returns that make them appear to be U.S. residents. 
Some of them are now trying to amend their returns because they worry 
that having mistakenly received a stimulus check will jeopardize their 
visa status, green card application or ability to return to the U.S.
    How much stimulus money was mistakenly sent to foreign workers 
living overseas is difficult to quantify. But Sprintax, which does U.S. 
tax preparation for nonresidents, did about 400 amended returns last 
year for people who mistakenly filed as U.S. residents, and so far this 
year it has done 5,000--almost 5% of the total federal tax returns it 
filed last year, according to the company. If just 5% of last year's 
more than 700,000 student and seasonal workers with F-1 and J-1 visas 
received a stimulus check in error, that would total $43 million.
    The ``economic impact payments'' sent erroneously to non-U.S. 
citizens are the latest in a series of mishaps involving coronavirus 
relief efforts, including nearly $1.4 billion in stimulus checks sent 
to dead Americans. As Congress debates another pandemic relief package, 
it's considering a second round of payments that would exclude the 
deceased, but its new bill does not address the problem of $1,200 
checks having mistakenly gone to foreign workers in other countries.
    Many of those workers are college students, often from Eastern 
Europe and South and Central America, who travel to the United States 
for temporary and seasonal low-wage jobs such as waiters, lifeguards 
and hotel housekeepers at ski resorts, amusement parks and beach 
destinations. In a typical year, the U.S. issues work visas to several 
hundred thousand foreign students.
    One of them is a 24-year-old citizen of the Dominican Republic who 
spent last summer working at a Cape Cod grocery store and this spring 
received a $1,200 stimulus check signed by President Donald J. Trump.
    ``I was really surprised because I was not expecting that money,'' 
the man told NPR, which agreed not to identify him because he is 
concerned that receiving the check could put him at odds with the U.S. 
government.
    ``I don't want . . . any problems,'' added the man, whose former 
Cape Cod landlord received the check and sent it to him in the 
Dominican Republic. ``If they say that we have to return it, I will 
return it. It is not a problem.''
    He said numerous foreign student workers he knows have also 
received stimulus checks, including people in Bulgaria, Colombia, 
Jamaica and Montenegro. Sometimes the checks were directly deposited 
into bank accounts on file with the IRS. Sometimes the checks were 
mailed to their former U.S. addresses and forwarded to them. And some 
checks could have been mailed to them directly overseas.
    The payments were intended to stimulate the U.S. economy by giving 
consumers spending money, but this Dominican man is not able to work on 
Cape Cod this summer because the Trump administration's freeze on 
foreign work visas has prevented seasonal workers from coming to the 
U.S.--so he'll be spending his stimulus payment in his own country.
    ``This money, to be honest, is a big help,'' he said, ``because we 
can buy food, we can pay the cable services, and we also can pay the 
university,'' referring to a school in the Dominican Republic where he 
takes online classes.
    Only U.S. citizens and U.S. ``resident aliens'' are eligible for 
stimulus money, but the Dominican man interviewed by NPR and some of 
his friends do not meet that eligibility standard. A ``resident alien'' 
is a federal tax classification, and to qualify for it an individual 
needs a green card or must have been in the U.S. for a certain amount 
of time.
    The U.S. government acknowledges that some stimulus checks were 
improperly sent to foreign workers and told NPR that the Treasury 
Department is ``exploring possible options'' to prevent that from 
happening again.
    Most foreign workers should file a form 1040-NR--the NR stands for 
nonresident--but instead mistakenly file a 1040, the form most commonly 
used by individual U.S. taxpayers, according to Georgia attorney 
Clayton Cartwright, who specializes in immigration tax law and has a 
background in accounting.


LEFT: Stimulus checks are prepared on May 8, 2008, in Philadelphia. In 
 2020, stimulus checks again went to many Americans, this time during 
 the pandemic's economic fallout. Some of that money went to thousands 
of foreign workers not eligible to receive the funds. Jeff Fusco/Getty 
                                 Images
   RIGHT: Thousands of foreign workers mistakenly received economic 
 stimulus checks from the U.S. government, likely because many filled 
out an IRS 1040 tax form instead of a nonresident 1040-NR form. Daniel 
                    Acker/Bloomberg via Getty Images

    ``I would say probably anywhere to a third to a half [of first-time 
foreign filers] are filing the wrong return,'' especially if they use 
e-filing software such as TurboTax that is intended only for U.S. 
residents, Cartwright said.
    When foreign workers file the wrong form, ``I don't know if the IRS 
would even be able to tell,'' he added. ``I mean, they have no way of 
knowing. You don't mark on your [Form 1040] tax return whether you're a 
citizen.''
    If a foreign worker files an incorrect tax form and also has a U.S. 
address, a bank account on file with the IRS, and a Social Security 
number--as many foreigners with work visas do--that increases the 
likelihood that the IRS would mistakenly mail them a stimulus check, he 
said.
    Some foreign workers did not realize they had filed incorrect tax 
forms until they received a stimulus check in error this spring, and 
they are now scrambling to amend their returns, said Sprintax's vice 
president, Enda Kelleher.
    ``We saw a huge number of people contacting us after the first 
stimulus payment because they said, `Hey, I got this check. I never 
asked for it, I didn't think I was entitled to it, and how can I 
correct it?' '' he said.
    Those clients were from 129 different countries, including 
Argentina, Zimbabwe, Peru, Colombia, Vietnam, Pakistan, Spain, Japan, 
Germany, Ghana, Russia, Nepal, Mongolia, Uzbekistan and the 
Philippines, according to Kelleher.
    ``It's a serious issue,'' he added, noting that in a recent 
Sprintax survey of more than 500 schools, 43% reported they had 
students or scholars who think they received stimulus checks in error. 
As a result, many schools ``believe it's a significant problem,'' he 
said.
    ``It doesn't surprise me that that would have happened,'' said 
Cartwright, the Georgia attorney. ``Now, does that make good policy 
sense? Probably not.''
    Cartwright said Congress was in ``panic mode'' in March as the U.S. 
economy was shutting down over the pandemic, so it rushed stimulus 
funding out the door. ``You know--damn the torpedoes, full steam ahead. 
We've got to get the money out,'' he added. ``So they just do it and 
just live with the consequences,'' including unintended ones.
    ``That is spillage,'' Cartwright said of the money that 
accidentally leaked overseas as Congress tried to flood the U.S. 
economy with stimulus money. ``I don't mean to sound flip or cavalier, 
but it's spillage.''
    The IRS says non-U.S. residents who received stimulus money in 
error should return it. But Kelleher anticipates that if additional 
stimulus payments are distributed, some foreign workers who tried to 
send back their first mistaken check will get a second one.

                                 
Article entitled, ``IRS Says Its Own Error Sent $1,200 Stimulus Checks 
to Non-Americans Overseas,'' by Sacha Pfeiffer, NPR, November 30, 2020, 
             Submitted for the Record by Hon. Thomas Massie
  IRS Says Its Own Error Sent $1,200 Stimulus Checks to Non-Americans 
                                Overseas
by Sacha Pfeiffer

NPR, November 30, 2020
https://www.npr.org/2020/11/30/938902523/irs-says-its-own-error-sent-1-
200-stimulus-checks-to-non-americans-overseas

    The IRS now acknowledges that its own error caused some citizens of 
other countries to mistakenly receive $1,200 coronavirus relief 
payments--and that the mistake is likely to happen again if more 
stimulus money goes out.
    When reports of the mistake first surfaced, the U.S. government 
placed the blame on those non-Americans, saying that many noncitizens 
erroneously received stimulus checks because they had filed incorrect 
tax returns that made them appear to be American.
    But many non-Americans who received stimulus money do not file U.S. 
tax returns. One of them is Susanne Wigforss, a 78-year-old Swedish 
citizen who lives in Stockholm.
    Wigforss was surprised in July to get a $1,200 check in the mail 
from the U.S. Treasury. It was followed by a letter from the White 
House signed by President Trump, addressed to ``My Fellow American'' 
and informing her that ``your economic impact payment has arrived.''
    ``I thought, `I can't believe it,' '' Wigforss recalled. ``They're 
sending it to me. Why? I mean, it's crazy, isn't it?''
    Only U.S. citizens and U.S. ``resident aliens'' are eligible for 
stimulus money--``resident alien'' is a federal tax classification, and 
to qualify an individual needs a green card or must have been in the 
U.S. for a certain amount of time--and Wigforss is neither.
    Asked about this by NPR, the IRS acknowledged it mistakenly sent 
checks to some noncitizens who receive Social Security and other 
federal benefits--such as Wigforss, who receives a small Social 
Security payment from having worked in California for several years.
    ``This is so wrong,'' Wigforss said, ``because I saw that a number 
of people were being evicted every month in Chicago, for instance, and 
I thought one of those families would have needed this stimulus check. 
Why should a Swedish citizen living abroad receive $1,200?''
    ``There's no way I'm going to cash this money--it doesn't belong to 
me,'' she added. ``But how much money is bleeding out from the Treasury 
Department because of these [misdirected] stimulus checks, I wonder?''
    The U.S. government cannot answer that question. The Treasury 
Inspector General for Tax Administration did find that, as of late May, 
$34 million in stimulus money had gone to people who filed a tax return 
with a foreign address.
    But that includes eligible people, such as U.S. citizens living 
abroad, and does not include ineligible foreign citizens who received a 
check at a U.S. address. For example, NPR interviewed a citizen of the 
Dominican Republic who was not eligible yet received a $1,200 economic 
impact payment at his former address in Massachusetts. That $34 million 
also does not include people, such as Wigforss, who received a check 
but did not file a U.S. tax return.
    Since Congress passed its coronavirus relief package in a hurry in 
March, the U.S. government has put no mechanisms in place to prevent 
these mistakes from happening again. As a result, if a new relief plan 
with more stimulus payments passes in the final weeks of the Trump 
administration or during the Biden administration, some of that money 
is likely to mistakenly end up in mailboxes overseas again.
    U.S. Treasury officials said they are ``continuing to assess the 
accuracy of the economic impact payments . . . and the recovery efforts 
for any erroneous payments.'' In the meantime, they told NPR, the IRS 
is ``relying on individuals to voluntarily return these payments.''
    ``I think the poor folks in the IRS don't have the bandwidth to go 
chasing this,'' said Enda Kelleher, a vice president at Sprintax, which 
does U.S. tax preparation for nonresidents, ``but it would be great if 
they did, because I believe that there's millions of dollars that have 
gone to people that weren't entitled to it, or they're certainly not 
the intended recipients.''
    Kelleher said Sprintax has clients from about 150 countries who 
mistakenly received stimulus checks, mostly commonly in India, China, 
South Korea, Vietnam and the United Kingdom, as well as numerous 
nations in Latin America.
    ``It's awful when we hear of millions of dollars going into the 
wrong hands,'' he added, ``but it was probably within a somewhat 
acceptable threshold of error or margin of error'' because Congress 
opted for speed over accuracy when it flooded the U.S. economy with 
money last spring.
    Many non-Americans who erroneously received a check are trying to 
return it because they worry it will jeopardize their visa or 
immigration status, ``but there's equally thousands that are saying, 
`Well, if they were silly enough to make this mistake, it's their 
mistake and I'm not going to give it back until they ask for it,' '' 
Kelleher said.
    Van Shockley falls in that category. He's 74 and was born in 
Pennsylvania, but he moved to Australia after becoming disillusioned 
with U.S. politics in the 1960s.
    ``I had always been depressed when JFK was killed,'' he explained. 
``I just couldn't get over that, so I started looking for someplace 
else [to] start all over.''
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

 LEFT: Susanne Wigforss, a Swedish citizen, poses with the letter she 
received from the White House about the $1,200 economic impact payment 
                     she received. Susanne Wigforss
 RIGHT: Van Shockley, who gave up his U.S. citizenship and has been an 
  Australian citizen for about a half-century, mistakenly received a 
   stimulus check and suspects he got it because he receives Social 
  Security from having worked in the U.S. before moving overseas. Van 
                                Shockley

    Shockley gave up his U.S. citizenship and has now been an 
Australian citizen for about a half-century. His last trip to the U.S. 
was 40 years ago. But he, too, received stimulus money, even though he 
is not eligible for it and does not file a U.S. tax return.
    ``That was the weirdest thing ever,'' he recalled. ``I checked the 
mail and I pulled out a check. It had a Federal Reserve/Treasury 
thingamajig on it with the eagle and all that. It's made out to me. I 
thought: `What's it from--America? What the hell's going on here? Why 
am I getting a check from the government?' ''
    Shockley suspects he mistakenly got a check because he receives 
Social Security from having worked in the U.S. before moving overseas.
    ``At first, I thought it was a joke,'' he said, ``and then I went 
down to the bank and I said, `Do you have some way of verifying that 
this is legal?' And the girl came back after five minutes and said, 
`It's legal. You got the money.' ''
    ``I didn't ask for the money. I didn't expect any money,'' Shockley 
added. ``But as soon as I got it, I stuck it in the bank. You ain't 
getting it back!''
    He attributes the mistake to U.S. government incompetence.
    ``Oh, complete stupidity. They're just not doing their job 
properly,'' Shockley said. ``But I'm not complaining totally because I 
was happy with the money!''

    Mr. Massie. Mr. Horowitz, I want to focus on these stimulus 
checks that were sent overseas to folks that weren't American 
citizens. These articles were from last year.
    But disturbingly, not only were the $1,200 checks sent, I 
am aware of a situation where somebody who hasn't even worked 
in the United States since the 1970s received not just the 
$1,200 check, but the $600 check and the $1,400 check. This 
individual does not file a U.S. tax return, and so there was no 
way to know whether the individual even met the constraints or 
requirements on income in order to receive these checks.
    Can you tell me what the IG's office has done to 
investigate these?
    Mr. Horowitz. Yes, Congressman. So last year, for example, 
the tax IG that oversees the IRS issued a report outlining a 
series of problems with payments by the agency of stimulus 
checks. And the GAO actually reported on that, as well, last 
year, and outlined some of the matching that failed to occur at 
the IRS with sending out the stimulus checks.
    I would have to follow up with the tax IG about what 
ongoing work they may have done with regard to the subsequent 
checks that have been sent out. I am not familiar, frankly, as 
I sit here today, with the ongoing work, and I believe GAO may 
have some followup work, as well, in that space.
    Mr. Massie. OK, if you could send those to my office, I 
would appreciate it, as it comes out in real time.
    Mr. Horowitz. Will do.
    Mr. Massie. I am afraid, since all three checks went to the 
particular person that I am aware of, and that this person does 
not file a U.S. tax return--this person actually worked in the 
United States in the late 1960s and early 1970s, and for that 
reason is somehow in the database. This person does not file a 
U.S. tax return. This person does not have a green card. This 
person is not a U.S. citizen or a dual citizen of the United 
States. And I would hope that we have the measures in place to 
keep this money from going to these individuals, or maybe 
Congress needs to acknowledge that they wrote a law that sends 
money overseas to people who aren't citizens.
    One of two things is true. We are either sending money to 
people who don't qualify on the income level, people who don't 
file tax returns, to people who don't work in the United 
States, people who don't live in the United States. That is the 
other thing. These checks are going to foreign addresses. I 
would hope that would be a trigger to do a check to see if this 
person is a citizen, if we are sending it to a foreign address. 
Maybe we should check to see if they have filed a tax return.
    I know U.S. citizens who didn't get checks. Some still 
haven't gotten their checks, who are U.S. citizens, and it had 
something to do with their tax return, yet this didn't keep 
people who are foreign nationals from getting these checks, who 
don't file tax returns, haven't filed tax returns in, you know, 
in at least 40 years.
    So I hope we will keep a check on that. And I don't want to 
take any more of your time, and I appreciate you looking into 
it. And I will yield back the balance of my time. Thank you.
    Mr. Horowitz. Thank you.
    Mr. DeFazio [presiding]. Representative Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chair.
    Ms. Krause and Mr. Soskin, I want to follow up on 
Representative Norton's question regarding assistance at 
transit agencies.
    Ms. Krause, you mentioned problems cities are having. Can 
you expand on that? Can you tell us about those problems you 
mentioned?
    Ms. Krause. What I was getting at is more the time that it 
takes at the local level to determine how to distribute the 
funds, when you are at the urbanized area and the funds are 
down at that level. There are some discussions at the local 
level as to how to dedicate those funds to the different and 
often multiple providers that are at the local level. So that 
is what is playing out, in terms of some of the transit funding 
now.
    Mrs. Napolitano. Are there any problems other than that?
    Ms. Krause. No. As I said before, when we have talked to 
transit agencies, largely implementation has gone--they found 
few challenges with implementation of the program from FTA.
    Mrs. Napolitano. Thank you.
    Mr. Soskin, Ms. Krause mentioned you would be able to 
expand on the issues of assistance to transit agencies. Can you 
please explain your work and findings on assistance to transit 
agencies?
    Mr. Soskin. Absolutely, Congresswoman Napolitano. We have 
two audits planned on Federal Transit Administration relief 
funding oversight. It is a sort of a two-phase audit, one of 
which will be the design of the FTA's controls for requirements 
and oversight risks during the awarding and life cycle of the 
grants that they are providing to transit agencies, and the 
second phase, or second audit will be a look at the 
implementation of their controls.
    In the relief funding management challenges report that we 
identified for the Department of Transportation last year, we 
also recognized several of the other oversight challenges, the 
challenges the transit agencies will face with these funds.
    One is that there is an interesting hybrid here of 
providing funds through an existing program, but providing them 
for new purposes, in terms of the operating expenses, and the 
100-percent Federal share of those operating expenses. And we 
look forward in our work to examining how the oversight and how 
the expenditures work, given that new purpose within an 
existing program.
    And the other challenge we highlight is monitoring funding 
and FTA's past reliance, in many cases, on either self-
certifications by transit agencies of their compliance with 
eligibility and funding conditions, as well as the reliance on 
oversight contractors, oversight support personnel who can be 
contractors, who, of course, are a valuable, important resource 
when the spigot of funds opens suddenly, as it has with 
pandemic relief funding, and as it has with hurricane relief 
funding in the past, with the ARRA funding a decade ago.
    But ensuring that those support personnel are properly 
trained, that they are familiar with the Federal oversight 
restrictions, and that they have methods to ensure that 
attention is brought to their recommendations and issues they 
identify will be critical.
    Mrs. Napolitano. Well, one of the transit agencies 
indicated that they were having problems securing the PPEs. Can 
you tell me why?
    Mr. Soskin. I am not familiar with the details of that 
issue of securing PPEs. I am not sure if we have done work in 
that area, but my staff and I would be happy to follow up with 
you about that question, and work with the Department to try 
and get you a specific and accurate response.
    Mrs. Napolitano. Thank you very much. I think it would be 
important to find out why the distribution was held up to the 
States, and then filtered down to the counties. And it made a 
great problem for my transit agencies, especially the little 
ones, too.
    Thank you very much. Mr. Chair, I yield back.
    Mr. DeFazio. Representative LaMalfa.
    Mr. LaMalfa. Thank you, Mr. Chairman. I did want to touch 
on the issue of commercial aircraft, and the mask-wearing issue 
with COVID, and I wanted to address this to Mr. Soskin.
    Last month, 27 of us sent a letter to TSA and CDC about 
their decision to renew the mandate through September 13, at 
least--not even sure when they are going to review the length 
of time. But we asked them to review the policy, and remove or 
modify it for passenger commercial aircraft. What we are 
getting is reports of 75 percent of the unruly passengers 
reports this year are because of the mask situation.
    I think we have all seen the videos of people getting 
pretty roughed up there, with the--if their 2-year-old doesn't 
have the mask on, or it is not on the right way, and this while 
people are on the plane that are not even wearing theirs 
correctly, with the enforcement or what have you.
    So we know that the aircraft themselves have extremely 
efficient filters that do a good job through the HEPA filters, 
of circulating the air through the aircraft, and cleaning it. 
So the situation is such that people are getting extremely 
frustrated, and that we are asking TSA and CDC to look at this 
sooner, rather than after the complete summer season is over 
with.
    So what was the consideration for the social effects for 
people that are on passenger planes, and the interaction this 
would cause with passengers and flight personnel on the 
aircraft?
    Has that been considered by DOT at all, are you aware of, 
Mr. Soskin?
    Mr. Soskin. Well, Representative LaMalfa, first let me 
express that we take extremely seriously the issue of unruly 
passengers on aircraft, and the potential impact on aviation 
safety. Our criminal jurisdiction here overlaps with the FBI's. 
And it is important to note that FAA has instituted a zero 
tolerance policy, and can pursue civil penalties, including 
increasingly more significant fines for unruly passengers, as 
they work to keep the onboard environment safe.
    We haven't done any work at this time in looking at the 
mask policy, specifically. As you know, it is an evolving 
public health environment. We saw the new CDC guidance and OMB 
guidance, as well as that from the--I understand the 
congressional doctors over the last few days, regarding masking 
in nonaviation environments.
    I do appreciate your highlighting, however, the efficiency 
of the filters on commercial aircraft. I think it is, of 
course, important for members of the traveling public to 
recognize all the safety measures that are in place to keep 
commercial aviation safe.
    Mr. LaMalfa. Well, it is exciting to hear about the zero 
tolerance policy, but I am talking about real people that are 
trying to travel here. And if they do have kids, if they do 
have people with special needs, it seems there is some really 
overzealous enforcement going on. And I think, for the flight 
personnel themselves, I hear the browbeating by the people 
announcing, as the flight is going along, ``Wear the mask,'' 
you know. Basically, it is really becoming an atmosphere that 
is not pleasant for something that has been on the wane here 
lately for, you know, the mask mandates.
    Now we are seeing we are going back and forth on mask 
mandates in this very body here--a lot of politics being played 
around it, as you might be hearing, that on one side of the 
building, in the House, it is a strong mandate. And on the 
Senate side, it doesn't seem to be as big of a problem. So 
somewhere in the rotunda there is a transition of how big the 
threat is.
    But I think we need to take a really good look at how this 
is affecting the morale of passengers, as flights are picking 
up once again, people with special needs, people with small 
children, and just a general attitude. It is not helping the 
airlines, it is not helping those personnel to have to be these 
hardcore enforcers on that.
    So is that something that you see there being an issue, Mr. 
Soskin?
    Mr. Soskin. Again, we have not engaged in any work to look 
specifically at the mask mandate or its effects. It is an area 
of overlapping responsibility among DOT and TSA, as well as the 
FBI, for enforcement. And I think my staff and I would be happy 
to discuss that question----
    Mr. LaMalfa. I am interested in that FBI piece there. So 
that is something. OK, well, I thank you for your time.
    Mr. Chairman, I will yield back.
    Ms. Davids [presiding]. Mr. Cohen, you are now recognized 
for 5 minutes.
    Mr. Cohen. Thank you very much. And first I would like 
everybody--if you can notice in the background, there is a 
television screen in my office, where the Washington Nationals 
are playing a baseball game. Four of their players are on COVID 
restrictions. Eight of their personnel are on COVID 
restrictions. I think they--masks is a good idea, and 
especially on airplanes, and where the public gathers in small 
spaces.
    But I want to thank Chairman DeFazio and Member Graves for 
holding this hearing.
    Most of the transportation industry was devastated, with 
significant declines because of COVID-19, people afraid to fly, 
and concerned about flying next to people. And even with masks, 
it is still somewhat concerning.
    We resuscitated the industry with lots of aid, but some of 
it was far from perfect in how it was delivered. One issue I 
worked on extensively was the disproportionate share of CARES 
Act grants that were awarded to certain smaller, less-
trafficked airports at the expense of our major commercial-hub 
airports, who service most of the public, and do most of the 
work, and need most of the money, including Memphis, which is 
the world's largest cargo airport in the world.
    These award amounts were based on a formula developed by 
the Senate and the Federal Aviation Administration that 
produced massive windfalls for certain small airports. As many 
as 31 airports received grants for at least 4 years' worth of 
operating expenses, and over and above--so they would have had 
4 years' worth of operating expenses without any moneys that 
they would otherwise have received. Fortunately, the wrong-
headed formula was changed, and the airports, for the future 
funding, didn't receive a disproportionate share of funding 
from two subsequent relief bills based on the pandemic. 
Nevertheless, the amounts that were awarded to certain airports 
for the CARES Act were far more than needed or were fair.
    Mr. Soskin, can you tell me why the formula was written 
this way in the first place, and what your office is doing to 
monitor the smaller airports, and their use of that money, and 
to see to it that it is properly spent, in accordance with FAA 
grant requirements?
    Mr. Soskin. Congressman Cohen, as Ms. Krause highlighted 
earlier, one of the tradeoffs that we face in awarding 
emergency relief funding, like in the CARES Act and CRRSA and 
the ARP, is the tradeoff between doing something new and 
unfamiliar for the agencies administering funds, and making use 
of existing mechanisms, existing programs, and existing 
formulas.
    And in this case, I think it is instructive. The responsive 
approach that was taken by FAA when it identified the 
multiyears of operating expenses that you referenced, and 
updated and limited the funding beyond a certain point, and 
then Congress, in the CRRSA, extended that, and narrowed the 
scope----
    Mr. Cohen. Mr. Soskin, I know the history. I know the 
history. I have been through it, and found it difficult to get 
through it. The question was why was it written that way in the 
first place?
    It wasn't using a formula that we already had. It was a new 
formula that the Senate and the FAA came up with. Why did they 
do that?
    Mr. Soskin. That is a question that we may look at, as part 
of our current audit in the FAA's award and oversight of CARES 
Act funds. And, you know, beyond its potential inclusion in 
that ongoing audit work, those are----
    Mr. Cohen. Mr. Soskin, thank you. You are not answering the 
question, but I will go on to Ms. Krause, and hopefully she 
will be better at doing that.
    What can you tell us about how much of the grants that were 
awarded to these small airports has been used, and whether 
larger, commercial service airports are getting enough funding 
from the FAA to meet their needs?
    Ms. Krause. Yes, we have some data, and we can give you 
more specifics. But at the highest level, the larger airports, 
when you are looking across the different funding streams, have 
expended more funds than the smaller ones.
    So when you are looking at the large-hub airports, you are 
seeing about 75 percent of their funds that they have received 
across the 3 buckets of money having been expended, where you 
are seeing lesser funds closer--you know, it all depends. We 
can give you more details, but when you get to the smaller 
airports, it is a smaller percentage, but in some cases, you 
know, around 50 percent or so.
    So I am happy to give you more details on sort of the spend 
rates across airport----
    Mr. Cohen. If you can. And if they are spending that money 
on superfluous things, they had plenty of funds. They, 
basically, have long, dirt runways and a windsock, and they 
didn't really need all that money. And what are they spending 
it on now? Is it extraneous things, just to spend the money?
    This was horrific. And if you would, let me know about 
that.
    Mr. Soskin, if you would, give me your report, and let me 
know why that was done, and what is being done to oversee it, 
and make sure that the money is being spent properly.
    With that, I yield back the balance of my time.
    Ms. Davids. Thank you. The gentleman yields back. Mr. 
Johnson from South Dakota is now recognized for 5 minutes.
    Mr. Johnson of South Dakota. Thank you very much, Madam 
Chair. My question will be for any of the panelists that want 
to weigh in, because I am sure you all have some expertise on 
this front. And I would compliment the chair on pulling 
together this panel. Clearly, we should all care about the 
efficiency and the effectiveness of Federal dollars invested in 
infrastructure, certainly during COVID, as well as during any 
time.
    So I think my preference would be this, to remind all of us 
about how inefficient much of our investment in infrastructure 
is in this country. Environmental reviews in this country 
commonly run in excess of 1,000 pages. That is not typical 
across the world. Our environmental reviews take, on average, 
five times longer than they do in Canada, and twice as long as 
they do in the European Union. Of course, building subways is 
expensive, but the New York subway capital construction costs 
per project are quadruple the global average for urban subway 
systems.
    And so I think my question for the panelists is, as you did 
your analysis of these infrastructure investments during COVID, 
did we get a sense of what the financial cost of compliance to 
these environmental and historical reviews were?
    And do we have any sense about how they compare to what we 
would see in other parts of the world?
    Mr. Soskin. Representative Johnson, I can take that 
question first, because I think it is important to understand 
that, at this point, a lot of the funds that have so far been 
allocated and awarded have been on the operating expense, 
upfront.
    So we are going to see the reviews and the infrastructure 
awards flow out over a period of years, and, you know, that is 
something that we have observed in our work on the Hurricane 
Sandy relief funding, where, in our report earlier this year, 
we highlighted that, although $10 billion in hurricane 
resilience and recovery funds were awarded shortly after 
Hurricane Sandy, even at this point only about $4 billion of 
those funds have been expended.
    So at this point----
    Mr. Johnson of South Dakota. Mr. Soskin, give this 
committee some--as we look forward, because, you are right, 
sort of the next tranche of capital investment is likely 
coming--given your historical experience, give us some sense of 
what the financial costs of those environmental and historical 
reviews would be.
    Mr. Soskin. So I don't have readily at hand the details of 
what some of those expenses are. Anecdotally, I believe, the 
elements of your question are correct, that planning and 
environmental reviews can take longer than in some other 
countries. I think that is a problem that has been recognized 
across the Government, and it is something we would be happy to 
follow up on if we have some work in that area we can share 
with you.
    Mr. Johnson of South Dakota. Maybe for all the panelists, 
just so we can focus on solutions, given your deep expertise, 
and as you have done analyses in inefficient and efficient 
governmental spending, are there things that could be changed 
in the Federal infrastructure, environment, landscape, statutes 
that could make for a more efficient investment?
    Are we getting in the way? And if so, how?
    Ms. Krause. I can jump in. This is Heather.
    So I would say, as infrastructure funding gets rolled out, 
depending on what folks are looking for out of the investment, 
being clear about and defining what the program is, if there 
are certain intentions, if there are certain outcomes that you 
are looking for; really, being clear on what you want the 
outcomes to be, and sort of thinking about how to measure that, 
I think upfront, is really important.
    Mr. Johnson of South Dakota. Thank you very much.
    Anybody else?
    Mr. Currie. I will jump in, sir----
    Mr. Johnson of South Dakota. Mr.----
    Mr. Currie. Yes, I will jump in. This is Chris Currie from 
GAO. And so I do a lot of our work on disaster response and 
recovery, multibillion-dollar recovery programs, which, though, 
for disasters go to rebuild infrastructure.
    And the issue you talked about of EHP reviews, or whether 
it is engineering reviews, or whatever it might be, has been a 
huge challenge in these infrastructure programs.
    Another thing that I wanted to point out, though, it is not 
just within individual grants or programs. There are so many 
different funding streams from different agencies that--all of 
which often have different requirements and different 
timeframes.
    So one of the things we hear from State and locals is, ``I 
may have to do an EHP review for FEMA projects, and do a 
separate one for HUD, and then do a separate one for FTA, and 
do a separate one for Federal Highway.'' I think that is 
something that could be looked at in this area, as well.
    Mr. Johnson of South Dakota. Oh, thank you very much. That 
is an excellent tactical suggestion, Mr. Currie.
    And for any of the other experts, if you have other 
suggestions, I am out of time, but I would love to have any 
comments from you. And we will work together, I am sure, on the 
committee in a bipartisan way to try to make these investments 
even more efficient.
    And with that I would yield back. Thank you.
    Ms. Davids. Thank you. The gentleman yields back. The Chair 
now recognizes Mr. Johnson from Georgia for 5 minutes.
    Mr. Johnson of Georgia. Thank you, Madam Chair, for holding 
this hearing. And thank you to the witnesses for your time and 
your testimony. The amount of $5.9 trillion is a significant 
sum of money, a lifeline for hard-working Americans, and the 
sum total of relief and job protection measures provided in the 
CARES Act.
    Last year, Congress acted decisively during a once-in-a-
century pandemic. But our work is far from done. We are 
obligated to ensure that relief aid arrived to the folks who 
needed it most, especially Black Americans, communities of 
color, and low-income groups already in poorer health, due to 
being without healthcare coverage. Communities of color were 
the essential workers who disproportionately bore the brunt of 
sickness, hospitalization, and death due to COVID-19, and who 
were exposed throughout the pandemic, while enabling us to work 
from home. They are the people who have too often been 
underserved and unserved by the Federal Government.
    Mr. Izzard, your office has found FEMA's management of 
disaster relief grants and funds to be inadequate. You reported 
last year that improving FEMA's management of these grants 
would be one of DHS's top challenges in responding to the 
COVID-19 pandemic. What is the impact of these deficiencies on 
FEMA's ability to get disaster relief grants to communities of 
color and Black Americans?
    Mr. Izzard. Well, thank you for the question, sir. As you 
rightly stated, we have done a lot of work in this area, and we 
have ongoing work now.
    One particular audit that was done--and I will just say 
that I am much more attuned to our criminal investigative work, 
but have some general visibility on our audit work, and one 
particular audit that was done looked at FEMA strengthening its 
responsibility determination process, to ensure that contracts 
are granted properly in the right place and the right time. 
That audit, actually, was awarded and then cancelled, cancelled 
22 contracts valued at about $184 million.
    So we were able to identify, as a part of that audit, that 
there were deficiencies that FEMA had, in not providing 
guidance to the contracting personnel, and we provided a 
recommendation to them, as well, in order to fix that.
    Also looking at----
    Mr. Johnson of Georgia. Let me ask you this. Has FEMA made 
any improvements in helping the underserved and 
underrepresented since your report was released?
    Mr. Izzard. Well, we do have other projects ongoing now 
that speak to equity, and one in particular that is going on 
now is we are looking at some work that will actually deal with 
equity in how things are handled. We are planning work that is 
related to that. So that is ongoing. And so we would hope to 
have an answer for you more specifically here, in the near 
future.
    But we will take that as a get-back, because we believe 
that is very important work.
    Mr. Johnson of Georgia. All right, thank you.
    Ms. Krause, the GAO reported on the CARES Act loan program 
for aviation, and found that small businesses were less likely 
to receive loans under this program, and that Treasury 
prioritized applications from large passenger carriers.
    That said, small businesses are more likely to be led by 
minorities and women. As a result of Treasury's actions, what 
has been the impact on minority-owned small businesses and 
Black-owned small businesses from prioritizing the large 
carriers?
    Ms. Krause. So we didn't get into that level of detail, in 
terms of who is impacted, in terms of the types of--or that 
level of detail in the data.
    I think what we did find, though, with that program, and 
some of the challenges that the small businesses faced, was 
some lessons to be learned if there is another similar type of 
program in the future. So having potentially multiple paths, or 
multiple programs to be able to support the diversity of 
businesses that might be applying for that type of assistance.
    Mr. Johnson of Georgia. Thank you.
    Mr. Izzard, what key things do you believe FEMA still needs 
to do to improve their grant management oversight, especially 
for the grantees who desperately need these funds, whose 
livelihood and families depend on relief aid?
    Mr. Izzard. Well, as you stated, sir, that is a very, very 
important area to look into. We certainly remain in 
collaborative [inaudible] with FEMA to ensure that they are 
continuing to direct their attention----
    [Audio malfunction.]
    Mr. Izzard [continuing]. Gaps and deficiencies.
    In fact, our recommendations in my audit works are intended 
to actually point them in the direction of where the greatest 
deficiencies are. So we will continue our collaboration with 
them, and continue to--in the hopes that they will move in the 
direction that----
    Ms. Davids. Thank you, the gentleman's time has expired.
    Mr. Johnson of Georgia. Thank you.
    Ms. Davids. The Chair now recognizes Mr. Nehls from Texas 
for 5 minutes.
    Mr. Nehls. Thank you, Madam Chairwoman.
    Mr. Izzard, I thank you for being here. It is good to see 
you. In your written testimony, it states that each fiscal 
year, DHS, Department of Homeland Security, OIG issues hundreds 
of recommendations to improve the integrity, accountability, 
and performance of the Department, the Department of Homeland 
Security.
    The DHS inspector general is one of nine statutory IGs who 
are members of the Pandemic Response Accountability Committee, 
or PRAC. We know that the CARES Act provided DHS, Department of 
Homeland Security, almost $46 billion for COVID-19 relief, and 
I believe your Department, sir, you have around $3 million of 
that to conduct oversight of those funds.
    So my question for you is, Mr. Izzard, are you monitoring 
the resources the Biden administration uses on border missions?
    Mr. Izzard. Thank you, sir. We have a number of ongoing 
projects with regard to the border at this time. In fact, our 
inspector general has recently made a number of trips to the 
border to personally take a look at the humanitarian crisis 
that is occurring at the border.
    And so, as a result of that trip, our office has initiated 
additional projects. So there are projects that are ongoing. I 
am happy to get back with our staff, and make sure we provide 
details of what those projects entail, and what they will 
cover, what they are intended to cover.
    Mr. Nehls. Thank you. And as you stated, the humanitarian 
crisis--how much is the border crisis costing the American 
people?
    In other words, how much money has DHS used to address the 
1 million people who have been apprehended at our southern 
border since the start of the year?
    Mr. Izzard. That is a great question, sir, and I don't have 
that information and detail available. I prefer not to speak 
anecdotally to it, but I will certainly make sure that we get 
you the detailed information. I believe we have done work in 
that area, and we will look at that to get that answer back to 
you.
    Mr. Nehls. That is fair enough, and thank you for that.
    And recently, the city of La Joya, in Texas, issued a 
public health warning due to the potential spread of COVID from 
infected migrants. And what took place? About July 26th, just a 
couple of days ago, there was an undocumented migrant family at 
a Whataburger, and they were coughing and sneezing while they 
were inside this Whataburger, and they weren't wearing any 
masks. And so a citizen contacted the La Joya Police 
Department, and the officer approached them and asked that 
family, ``What are you doing here? What is going on?'' And that 
family said that they were released by Border Patrol because 
they had COVID-19. The family also stated that a local charity 
group paid for their room at a local hotel.
    We do know that the Hidalgo County judge, Mr. Richard 
Cortez, called on Federal immigration officials to stop 
releasing infected migrants into their communities.
    So has the Department of Homeland Security--has your office 
examined how many migrants have been released from custody with 
COVID? If so, how many?
    Mr. Izzard. We do have an open project that looks at DHS's 
protocols, and how they handle matters such as that at the 
border. I will make sure we get that information to you. But 
yes, sir, to directly answer your question, we do have an open 
project. It is ongoing. We look forward to providing and 
publishing the final report, once it is complete.
    Mr. Nehls. Thank you. And I can't wait to receive that 
answer.
    And you stated earlier that you have a collaborative effort 
with FEMA. And so is FEMA being deployed to the border?
    Mr. Izzard. I am aware that there are reports that FEMA has 
been represented at the border. That is my understanding.
    Mr. Nehls. All right, so what--so you don't really know 
what operations have been impacted due to FEMA's deployment at 
the southern border? You couldn't answer that. Fair enough.
    Is FEMA spread too thin, sir?
    And the reason I ask that is will FEMA be able to respond, 
as hurricane season bears down on the gulf coast?
    I represent southwest Houston, southwest Texas, and 
hurricane season is coming. Will FEMA be able to handle that, 
with the responsibility that I believe they also have at the 
southern border?
    Mr. Izzard. Well, I certainly understand that question, 
sir, and I appreciate it. We believe that our independence and 
objectivity is really the bedrock of what we do, and so we will 
continue to conduct our oversight work to ensure that we 
address issues that arise. And if there are gaps that arise, 
that we will address those.
    I don't know that we would opine on whether they are spread 
too thin, or their role and how they function, but we certainly 
will, in an oversight capacity, address any gaps that do arise 
as a result of how they lay out their programs.
    Mr. Nehls. Thank you, Mr. Izzard, and I look forward to 
hearing back from you. And thank you for your candidness.
    Madam Chair. I yield back.
    Ms. Davids. Thank you. The gentleman yields back. Ms. Titus 
is now recognized for 5 minutes.
    [Pause.]
    Voice. Muted.
    Voice. You are muted, Ms. Titus.
    Ms. Davids. Ms. Titus, I believe that your microphone is 
muted.
    Ms. Titus. Is that better?
    Ms. Davids. We can hear you now.
    Ms. Titus. Oh, OK----
    Ms. Davids. You are recognized for 5 minutes.
    Ms. Titus. I was addressing this to Mr. Currie.
    Early on in the pandemic, there were several reports from 
State and local emergency responders, alleging that their 
orders for supplies were getting redirected. The chairman and I 
raised some concerns with the former Administrator, and it 
seemed that the former President's son-in-law was heavily 
involved in some of the coordination efforts under FEMA.
    One example was in Arizona. The Phoenix fire chief 
complained, ``We have ordered millions of dollars of personal 
protective equipment that keeps getting hijacked before getting 
to the city of Phoenix.'' I wonder what steps FEMA has taken to 
prevent this kind of unpredictability from happening again in 
the future.
    And is there any investigation still going on about that, 
or what can we do to take additional steps to be sure that we 
don't have a bridge to nowhere?
    Mr. Currie. Yes, ma'am, thanks for the question. That was 
actually one of our recommendations last year, still early on 
in the pandemic. There is no doubt there was a ton of confusion 
early on between FEMA and the State and local governments about 
who was making decisions, where Federal supplies wound up, and 
where they didn't. We heard lots of stories from States about 
supplies showing up that they didn't ask for, and then supplies 
that they asked for never showing up.
    So one of our recommendations was that, obviously, FEMA 
needed to get a better handle on communication and coordination 
with the States on that prioritization.
    Actually, back when we made that, they disagreed. They 
thought we were already doing that. But they have taken a 
number of steps to improve that. And we have heard some 
improvements. But I will say that the need for the PPE and the 
supplies, as you know, has drastically been reduced over the 
last 6 months or so.
    So my concern, moving forward, if we face another surge, 
and we get into the need for the Federal Government to begin 
airlifting and providing those supplies again, that we are 
going to face similar challenges moving ahead.
    Ms. Titus. Well, that distresses me because Las Vegas is 
becoming a hot spot, and we see on the news every night 
hospitals are being backed up, we need more testing to 
complement the vaccine. So I hope all these things you hear 
about supply chain are not going to apply to the work that you 
all are doing. So I am glad you are trying to get on top of 
that.
    I would add that, while most of the people you worked with 
were good actors, there were a number of kind of schemes that 
we heard about, fraud schemes, theft of public funds, hoarding 
of scarce materials, fictitious claims against the Government. 
Are you all working with the State and local law enforcement to 
try to either go after those people, or be sure that it doesn't 
happen in the future, or what we need to put in place to 
prevent it?
    Mr. Currie. Yes, ma'am. A couple of things I will say, and 
then I want the DHS IG to talk about some of their 
investigative work, too.
    But one of the things we saw in the pandemic that creates 
that situation is when there was a run on supplies, FEMA and 
DHS were looking around, trying to find anybody that could 
provide that. And, of course, mixed up in that were people that 
were looking to defraud the system and could never provide the 
supplies.
    We saw the same thing after 2017, with the disasters, 
people promising they could provide a certain amount of meals 
or water in Puerto Rico, and things like that, and they never 
could. So, you know, whenever there is----
    Ms. Titus. There is also price gouging, I am sure.
    Mr. Currie. Oh, yes, ma'am, absolutely, and that is one of 
the--I mean, that is not outright fraud, but that is one of the 
most important roles of the Federal Government, to make sure 
that is not going on.
    So we have looked at that from the standpoint of, like, how 
do we get better at contracting, so we don't have these kind of 
gaps and deficiencies. But I know Mr. Izzard has also done a 
lot of investigative work on that side, too.
    Ms. Titus. Thank you.
    Mr. Izzard?
    Mr. Izzard. Yes, ma'am. So, as Mr. Currie mentioned, we 
have done and continue to do a lot of investigative work on 
that front.
    We found that the amount of fraud, as it relates to 
identity theft, misuse of the lost wage assistance program is 
continuing to grow. We identified additional misconduct 
allegations and threats to that program that we have to wind up 
initiating investigations on.
    So we are using sort of a parallel approach with initiating 
audits that address potential gaps in the program, as well as 
going after the bad actors who have defrauded the system.
    It would not be a stretch or an exaggeration to say that we 
have seen it across the entire Nation. And so we believe that 
we are going to continue to find those pockets in areas where 
there are individuals who have exploited the system to 
personally enrich themselves, financially,
    Ms. Titus. Well, thank you. I serve also on the Homeland 
Security Committee, so be sure you reach out and let me know if 
we can be helpful in that in any way with our local State 
officials, working together with you.
    Thank you both, and thank you, Mr. Chairman. I yield back.
    Ms. Davids. Thank you. The gentlelady yields back. The 
Chair now recognizes Mr. Stauber for 5 minutes.
    Mr. Stauber. Thank you, Madam Chair.
    You know, I first would like to speak a little about some 
of the jaw-dropping scenes we have seen over the past several 
months, where entire classes of individuals have been refused 
service and the ability to fly because they have a disability.
    I have a son with Down syndrome, and I understand the 
difficulties that parents must deal with when traveling with 
children with disabilities. I will say this loud and clear: 
Just because someone has a mental or physical disability does 
not mean they are less of a human, or have less of a right to 
fly than you and I. And yet we have seen this exact situation 
play out all over the country.
    Those with disabilities and their families have been 
shamed, embarrassed, and harassed, all because a child may take 
down their mask unintentionally, or someone has such a severe 
disability that it precludes them from wearing a face covering. 
This type of discrimination is not what America should look 
like. It is unacceptable. And I urge President Biden to stop 
encouraging these types of rigid and inflexible mandates that 
both put our transportation workers in uncomfortable positions, 
and discriminate against those with disabilities.
    And now, shifting gears, Mr. Horowitz, according to your 
testimony it is your responsibility to ``ensure that taxpayer 
money is used effectively and efficiently to address the 
pandemic-related public health and economic needs that were 
funded through the various COVID-19 relief bills,'' It is clear 
that the last 12 months may account for the largest amount of 
financial fraud to ever be committed against the United States. 
We have seen countless stories of algorithms and bots applying 
for fake unemployment insurance, identity theft, misuse of PPP, 
and idle grants and loans, and an array of other crimes that we 
haven't even heard about yet.
    And Mr. Horowitz, are you aware that the EIDL program alone 
has $80 billion--that is with a ``B''--$80 billion in fraud?
    Mr. Horowitz. Congressman, I am aware of various reports to 
that effect, in terms of the numbers. And frankly, there are 
still investigations ongoing.
    Mr. Stauber. Yes, and just so----
    Mr. Horowitz. How that was distributed----
    Mr. Stauber. Just so we are on the same page, you are aware 
of $80 billion worth of fraud, and----
    Mr. Horowitz. I am aware of reports----
    Mr. Stauber. Yes, and how about the PPP, Mr. Horowitz? How 
about the PPP? Do we know how much fraud is in there yet? And 
can you give us an estimate?
    Mr. Horowitz. I don't have an estimate. I can get back to 
you on what the SBA IG has reported on. And he has put out----
    Mr. Stauber. Sure.
    Mr. Horowitz [continuing]. A number of reports about his 
concerns regarding how that--both of those programs, frankly, 
were handled certainly a year ago, when----
    Mr. Stauber. Yes, Mr. Horowitz, I think that, if you would 
get back to the committee on what the PPP fraud is, or what you 
think it is--and I know that, working with the SBA, you can get 
a really, really good idea. And I appreciate that.
    And I hope that it concerns you as much as it does me that 
there are everyday Americans who were being denied loans and 
assistance because the accounts had run dry, while at the same 
time there were criminals collecting, in one example, $20 
million from these relief funds for fake small businesses.
    And I understand that you aren't working to combat these 
crimes, but these crimes against the taxpayer should never have 
been able to be committed in the first place. And I thank you 
for testifying today, and I think that before my colleagues on 
the other side of the aisle prepare to pass another $4.5 
trillion in spending that we can't afford, we should address 
this fraud, corruption, and abuse that has already plagued the 
Federal Government and hurt everyday Americans.
    Mr. Currie, with my 1 minute remaining, you had mentioned 
that FEMA was doing all they could in reference to the supply 
chain, getting the supplies wherever they could. Mr. Currie, 
would you agree that bringing back manufacturing to our shores, 
bringing back pharmaceutical manufacturing to this country, 
bringing back PPE-making in this country, and bringing back 
critical minerals mining to this country to hold the destiny of 
this great country into our own hands, would you agree with 
that?
    Mr. Currie. Sir, there is no doubt that the pandemic 
exposed that we are reliant on foreign sources for many of our 
products, pharmaceutical, all the things that you mentioned. So 
the----
    Mr. Stauber. And if we don't--Mr. Currie, if we don't learn 
from that, shame on us, correct?
    Mr. Currie. Yes, sir.
    Mr. Stauber. OK, thank you. I yield back.
    Ms. Davids. Thank you. The gentleman yields back. The Chair 
now recognizes Ms. Brownley for 5 minutes.
    Ms. Brownley. Thank you, Madam Chair. I appreciate it. My 
first question is to Mr. Horowitz.
    And just in general, do you feel like you have enough 
resources, in general, to appropriately oversee fraud and 
abuse?
    Mr. Horowitz. So, Congresswoman, I think we have been 
certainly very appreciative in the community about the support 
coming from Congress. But frankly, several IGs have noted the 
challenge they have, overseeing billions of dollars in spending 
in their agency, compared to what they have gotten in terms of 
additional relief.
    I know DHS OIG is one of the IGs that have mentioned this 
problem, and Mr. Izzard could speak to that, about, I think, 
getting a few million dollars to oversee tens of billions of 
dollars has been a challenge, for example, for DHS OIG. And I 
know some other IGs have also raised that concern.
    We have demonstrated, as IGs, as a track record, that we 
have returned multiples of investments in our efforts because 
of the wrongdoings that we find, the efficiencies we find. And 
so investment in IGs have proven, over our 40-year history, to 
be very good investments for the taxpayers.
    Ms. Brownley. I couldn't agree with you more.
    And Mr. Izzard, if you have anything to add to that?
    Mr. Izzard. Oh, yes, ma'am, thank you. I agree 100 percent 
with Mr. Horowitz, and appreciate his response.
    The Department received, I believe it was, over $40 billion 
to assist with our CARES--from the CARES Act, and we were--OIG 
received about $3 million, too, for oversight work. And so we 
have found it at times challenging. However, we forged ahead. 
And I believe we have been successful in our efforts, and 
certainly leveraging our relationships and partnerships, for 
example, with the PRAC, which is a relationship that we 
thoroughly appreciate, as well as the other OIGs in the 
community.
    So also, funeral assistance is a new one, a newer one, 
where there was tens of billions of dollars allocated to 
support that. And we have not gotten any supplementals for 
that. However, we have moved ahead. We actually have projects 
ongoing now to address funeral assistance.
    So I think, with more, we certainly can do more. But 
notwithstanding, we are going to continue to forge ahead and do 
everything we can to address the challenges that the pandemic 
has brought with it.
    Ms. Brownley. Thank you, sir. And I just wanted to say to 
you, I know that you personally are not responsible for 
Homeland Security priorities, and particularly around FEMA. But 
I was concerned, in your response to another question with 
regards to FEMA's readiness, in terms of extreme weather 
conditions. I mean, I think we all have to look ahead and know 
that that is coming.
    I am from California. There is no question that our fire 
season has started very early. And I just anticipate across the 
country that we are going to continue to experience more 
extreme weather conditions. And coupled with that, we don't 
know whether there is going to be another surge in this 
pandemic, where we are going to have to call upon FEMA, as 
well.
    So I would just like to say, I hope that FEMA is doing the 
appropriate planning and expressing what their needs may be in 
order to be ready for any pandemic issues or any extreme 
weather conditions experienced across the country.
    And my last question is, again, back to Mr. Horowitz. On 
the CARES Act and other related legislation, there were 
detailed reporting requirements to ensure transparency and 
accountability. And then, going on OMB's guidance to agencies, 
then, was to say we don't really need any more additional 
information.
    Your office has come back and said that that your office 
recommended that OMB issue the guidance to agencies to collect 
the missing information. So I was just wondering if that 
actually happened.
    Mr. Horowitz. Thank you for asking about that, 
Congresswoman, because that has--you are right--been a very 
important issue for us. We were very concerned last year, when 
OMB issued its guidance initially after the CARES Act, without 
consulting with the PRAC, that basically said USAspending.gov 
would be the tool that you will use to report through.
    We have identified in another report that is on our website 
that we issued in November some of the significant problems 
with that. And we are pleased that OMB----
    [Audio malfunction.]
    Mr. Horowitz [continuing]. This year issued a revised memo 
that tried to address some of that. Of course, it's very 
difficult to go back from a year ago to get that kind of data 
that we need.
    Ms. Brownley. Well----
    Mr. Horowitz. We are working with leadership to do that.
    Ms. Brownley. Thank you. I believe my time is up.
    I yield back, Madam Chair.
    Ms. Davids. The gentlewoman yields back. The Chair now 
recognizes Mr. Westerman for 5 minutes.
    Mr. Westerman. Thank you, Madam Chair. And thank you to the 
witnesses.
    Mr. Soskin, at the end of the 116th Congress, Congress 
authorized a Maritime Transportation System Emergency Relief 
Program. But the administration has not requested any funds for 
this program.
    The U.S. maritime industry estimates it needs $3.5 billion 
in emergency relief, as a result of unanticipated COVID costs, 
and has requested those funds be provided under the MTS 
Emergency Relief Program. Are you monitoring the maritime 
industry's resources?
    Mr. Soskin. Mr. Westerman, I am not actually familiar with 
the maritime industry funding issue that you have identified. I 
would be happy to consult with my staff, and we can follow up 
with you on your question about that area.
    Mr. Westerman. OK, thank you. I would appreciate that.
    Mr. Soskin, in March, Administrator Fenton, in talking 
about testing on the border, he said that testing is happening, 
COVID testing, and that there is less than a 6-percent positive 
rate on the border. Are you aware if this testing is still 
happening, and if those testing rates have increased, those 
positive rates?
    Mr. Soskin. I am not familiar with that issue, but I think 
DHS Assistant IG Izzard might have more awareness about testing 
on the border.
    Mr. Westerman. Yes, I was going to ask him that question, 
as well.
    Mr. Izzard, do you have any information on that?
    Mr. Izzard. I do know that we have ongoing projects. And as 
I said earlier, our inspector general recently made personal 
visits to the border, which has resulted in some of the 
projects.
    I don't know specifically the answer to that question, but 
I will make sure we get you a response, directly.
    Mr. Westerman. Thank you, sir. I was on the border last 
weekend, down in the Rio Grande Valley, and I saw reports on 
Monday that there were 671 additional COVID-positive tests in 
Hidalgo County. And I have seen reports that say the COVID 
infection rate is up 900 percent along the border.
    One thing that I took back from the trip to the border, 
along with many what I would call crisis areas, was on the 
flight back out of McAllen. I noticed, in the airport, there 
were several passengers that were holding manila envelopes 
that, on one side, it was printed. I think it was something 
like, ``Please help me. I do not speak or read English. Please 
help me get on the right airplane.'' And then, on the other 
side of the envelopes, it would have flights outlined on it, 
departing airports, arriving airports, and the times on that.
    Mr. Izzard, can you confirm if those were migrants, or was 
that just a group of people carrying envelopes through the 
airport?
    Mr. Izzard. Sir, I can't confirm, I really don't know. I am 
sorry, I just don't know the answer to that.
    Mr. Westerman. So you don't know if DHS is putting migrants 
on commercial airlines, and shipping them around the country?
    Mr. Izzard. Well, I do know that we have an open audit at 
this point that looks at that specific area. It is ongoing. So 
I can't speak to the findings of that at this point, but I 
certainly look forward to providing that at the point in which 
the audit is finalized. We do have an audit working that 
direction, though.
    Mr. Westerman. So if you don't know if commercial airlines 
are being used to move migrants around the country, you also 
wouldn't know if those migrants are being tested for COVID, or 
being vaccinated before being moved around the country.
    Mr. Izzard. I don't know the answer to that. Perhaps that 
is something that our project may look into. But I will make 
sure to take note of that, to take that back for consideration 
with our staff.
    Mr. Westerman. Yes, I would appreciate that, if you could 
look at that sooner than later, and get an answer back on that 
issue.
    And Madam Chair, I yield back.
    Ms. Davids. The gentleman yields back. The Chair now 
recognizes Mr. Lowenthal for 5 minutes.
    Mr. Lowenthal. Thank you. Thank you, Chair. And I want to 
focus on a specific program that means a lot to me that Mr. 
Currie and Ms. Krause had mentioned in their testimony. And if 
you could, just help me with that, and that is the Coronavirus 
Economic Relief for Transportation Services, or what is known 
also as the CERTS Program.
    As you highlighted, none of the $2 billion provided by 
Congress has been allocated. You note that Treasury faced a 
huge challenge setting up a new program to support industries 
where the agency had no experience, and where there were many 
small stakeholders. And you pointed out that Treasury is 
working to learn from its experience with the Payroll Support 
Program and other pandemic relief programs to communicate 
clearly, for instance, and that is very encouraging.
    But I want to be clear. The relief that Congress provided 
was vital to prevent dislocation and disruption in critical 
infrastructure. And no matter what sector we are talking about, 
aid prevented job loss, and kept businesses and agencies we all 
rely on, it kept them afloat.
    So my question is that climate change and many other 
challenges make this world, I understand, much less 
predictable, and we need to get better at responding to unique 
and unexpected challenges.
    So my question, then, is what can we do to build our 
capacity to implement programs like the CERTS Program?
    Ms. Krause. Thank you for the question. This is Heather 
Krause at GAO, and my colleague can jump in, as well.
    I would say, when you have an agency implementing a program 
where they don't, in Treasury's case, work with this applicant 
pool--and as you mentioned, it is a big, broad number of 
applicants there--it is really important that they work closely 
with the other Federal agencies that may have information or 
knowledge of those industries.
    So in this case, we are in the process of looking at the 
CERTS Program. We know that Treasury has reached out to DOT, 
and has worked with them to figure out--as well as the Coast 
Guard--to figure out how to determine eligibility for this 
program, because you do have a lot of different operators. And 
DOT can look and sort of see what are the operators and 
applicants that might--you know, ways to check eligibility.
    As we understand, the application process just closed on 
July 19th. So it is still in progress. But, in terms of 
implementing programs where they are new, and it is a new 
entity you work with, it is important to work with the 
industry, understand the industry, and work with those Federal 
agencies to better understand how you might effectively 
implement the program.
    Mr. Lowenthal. Is that what we have learned? If another 
crisis occurred, what have we learned to expedite that process 
now?
    Ms. Krause. I think it is really encouraging those agencies 
to work together upfront. Clearly communicating to industry 
sort of the status of the timelines and what they are doing, 
those are the types of things that we certainly learned are--
and expectations for the program, and sort of the timing of 
when it will roll out. Those types of communications are really 
important in these scenarios.
    Mr. Lowenthal. Thank you. I am also wondering whether the 
question can also be answered by--let me just see who that was. 
I think that was Mr. Currie.
    You also mentioned----
    Mr. Currie. Yes, sir.
    Mr. Lowenthal [continuing]. The CERTS Program. What can we 
do to build our capacity to implement programs--like the CERTS 
Program, which is all new--in the future, when there is a 
crisis that comes up?
    Mr. Currie. Yes, sir. Ms. Krause is definitely an expert on 
the CERTS Program, but I cover our work on disaster response 
and recovery, and one of the biggest themes that we see in the 
preparedness side is that, often, gaps in capabilities at the 
local level or in different industries have been identified 
through prior exercises and assessments.
    The problem is, because the event hasn't happened yet, we 
often don't take action to address that before it happens, and 
we don't close the gap that we know exists. And I think some of 
that is just latency, and especially with the pandemic, of 
disbelief in thinking that it is actually going to happen. And 
that is----
    Ms. Davids. Thank you, Mr. Currie.
    Mr. Currie. That is a key theme----
    Mr. Lowenthal. Thank you. I yield.
    Ms. Davids. The gentleman's time has expired. The Chair 
will now recognize Mr. Guest for 5 minutes.
    Mr. Guest. Thank you, Madam Chair.
    Mr. Horowitz, within the Federal Government's National 
Disaster Recovery Framework, the EDA serves as a coordinating 
agency for the economic recovery support function on behalf of 
the Department of Commerce. Congress has appropriated $1.5 
billion for EDA's Economic Adjustment Assistance Program in the 
CARES Act and, more recently, $3 billion in EAA funding in the 
American Rescue Plan. Twenty-five percent of that funding is 
dedicated to addressing employment and gross productivity 
losses in the travel, tourism, and outdoor recreation industry.
    As an agency that received $3.5 million in fiscal year 2021 
appropriations, how is the Pandemic Response Accountability 
Committee working with the EDA to ensure that this large 
appropriation amount that had been distributed during the 
pandemic is being distributed with transparency, and reducing 
waste, fraud, and abuse?
    Mr. Horowitz. So Congressman, what we have been doing at 
the Pandemic Response Accountability Committee is working with 
the IGs who oversee the specific agencies and the specific 
programs, to coordinate and make sure that we have got the 
right resources and tools to take those steps and do that 
oversight.
    And I can follow up with the IG to see what kind of work 
they have been doing with regard to that specific program.
    Mr. Guest. And let me follow up on your written testimony. 
You talk about the fraud task force that, as of July of this 
year, that 28 agents have been assigned to that task force. Can 
you talk a little bit about the work that the task force is 
doing?
    Mr. Horowitz. Absolutely. So one of the things that became 
clear early on in the work we have been doing from a law 
enforcement standpoint--and the IG community has a number of 
law enforcement agencies--is that, first of all, several of the 
programs, and several of the IGs were facing extraordinary 
requests and resource needs to deal with some of the fraud that 
they were dealing with, the SBA IG and Department of Labor IG 
being at the front of that line.
    In addition, what we found was that the fraud wasn't 
necessarily isolated, and the wrongdoing wasn't necessarily 
isolated to a specific program, but rather, it cut across 
programs. And so we needed to be coordinated with each other to 
share the learnings we were seeing.
    And then finally, we needed to make sure that what we were 
doing with that information, as we saw wrongdoing and fraud, 
was interacting with the other parts of the IG community that 
handled these issues, like auditors, and making sure that we 
were taking steps to go back and try and prevent further fraud 
and detect further fraud. So we were coordinating to do all of 
those things.
    Mr. Guest. And you also talk about the adoption of the 
subpoena policy, and how that has contributed in efforts to 
stop large-scale fraud that we are seeing in the pandemic 
response programs. Can you talk a little bit about the effect 
that this subpoena policy has had on what your agency is doing?
    Mr. Horowitz. Yes, and I certainly appreciate Congress 
giving us that authority in the CARES Act last year.
    We have put in place the subpoena authority that we have 
been given. IGs generally have documentary subpoena authority. 
They don't, though, have--for almost all of them--testimonial 
subpoena authority. [Inaudible] the House passed a bill that 
would, in fact, give IGs that authority, it is pending in the 
Senate, we hope it will get passed.
    And so we have put in place a subpoena policy that will 
allow the PRAC to assist IGs who need testimonial subpoenas to 
get that authority, so they can ask recipients of the funds, 
who may have evidence of wrongdoing, what they know, and help 
advance those kinds of investigations.
    Mr. Guest. Well, and last question; Mr. Izzard, here is a 
question for you.
    Several of your recent reports regarding FEMA look at 
challenges that occurred during Hurricane Harvey, Hurricane 
Sandy, and other large disasters. As we are once again 
approaching hurricane season, and as Mississippi is one of 
those States that is typically in the bull's-eye of approaching 
hurricanes, what can Congress do to fix some of these ongoing 
issues, as a result of the reimbursement backlogs, contract 
controls, and delayed processes?
    Mr. Izzard. Oh, well, thank you for that question. As you 
stated, we have a number of projects that we have done with 
regard to Hurricanes Harvey, Irma, and Maria, and we learned a 
lot from those, and we anticipate that we will learn a lot as 
we move forward. So I think, as we continue to perform our 
work, we will just continue a lot of work to inform the work 
that we have done in the past, and inform where we go from 
here.
    So we appreciate all the support that Congress has provided 
so far, and we look forward to continuing----
    [Audio malfunction.]
    Mr. Izzard [continuing]. Regard.
    Ms. Davids. Thank you. The gentleman's time has expired. 
The Chair now recognizes Mr. Carbajal for 5 minutes.
    Mr. Carbajal. Thank you.
    Mr. Currie, the Government Accountability Office, GAO, 
reported that some States had difficulty accessing the various 
Federal programs available to pay for PPE and testing supplies 
throughout the COVID-19 pandemic. My office heard directly from 
local leaders on this issue, and many were confused about the 
reimbursement and cost share responsibility. In times of 
crisis, I was disappointed in the lack of clarity from the 
Federal Government, and the bureaucratic redtape we had to 
navigate to get the needed resources in the hands of the 
American people, including my constituents.
    What has FEMA done to remedy this situation so that, in 
future emergencies, medical personnel around the country can 
get the equipment they need in a timely, efficient manner?
    Mr. Currie. Thank you, sir. I think I mentioned earlier 
that one of our first recommendations in this area was early on 
in the pandemic, was FEMA and its partners, to clarify with the 
States and local governments how it was providing supplies, 
when, and where, and why.
    Across 50 States, multiple Territories, multiple Tribes, 
all of which had disaster declarations, that was a little 
messy, upfront. I think they have made a lot of progress since 
then. But as I mentioned when Ms. Titus asked about this, my 
concern is that that was--you know, the needs have decreased 
significantly over the last 6 months or so for PPE. If that 
need was to explode again in the coming months, I would hope 
that what they have done to address some of these issues would 
fix some of those early problems. But at this point, I don't 
know.
    Mr. Carbajal. Thank you, Mr. Currie. In light of the votes 
scheduled that have been called, I have two other questions, 
but I am going to submit them for the record.
    With that, Madam Chair, I yield back.
    Ms. Davids. Thank you. The gentleman yields back.
    For the information of all Members and witnesses, we have a 
long vote series on the floor, and are going to go into recess. 
We will reconvene as soon as possible after the last floor 
vote, and we will come back to the first panel of witnesses.
    The committee stands in recess.
    [Recess.]
    Ms. Norton [presiding]. At the direction of the chair, in 
light of the series of votes and the lateness of the day, the 
committee now stands adjourned.
    [Whereupon, at 5:26 p.m., the committee was adjourned.]

                                Appendix

                              ----------                              


  Questions from Hon. Salud O. Carbajal to Heather Krause, Director, 
     Physical Infrastructure, U.S. Government Accountability Office

    Question 1. The COVID-19 pandemic exposed serious flaws in our 
federal government's preparedness to keep people in the aviation sector 
and travelers safe. It highlighted the need for a national aviation-
preparedness strategy to combat communicable diseases, like COVID-19.
    I have introduced H.R. 2387, the Fly Safe and Healthy Act, to 
establish a pilot for temperature checks and have supported Chairman 
DeFazio's legislation, the Healthy Flights Act of 2021, that calls for 
a national aviation strategy.
    a.  Can you describe the barriers the Department of Transportation 
and the Federal Aviation Administration have faced in developing a 
national strategy?
    Answer. While the Department of Transportation (DOT) is in the best 
position to develop a national aviation-preparedness plan, as we 
recommended in 2015, DOT does not believe that it should lead the 
development of such a plan. Rather, DOT maintains that those agencies 
that have both legal authority and expertise for emergency response and 
public health--namely the Department of Homeland Security (DHS) and the 
Department of Health and Human Services (HHS)--are best positioned to 
take the lead role in developing such a plan.\1\ However, in May 2020, 
DHS stated that it had reviewed its existing national, sector, and 
modal plans for pandemic preparedness and response activities and 
determined that it is not best situated to develop a national aviation-
preparedness plan. In June 2020, HHS stated that it is not in a 
position to develop a national aviation-preparedness plan because it 
does not have primary jurisdiction over the entire aviation sector or 
the relevant transportation expertise.\2\
---------------------------------------------------------------------------
    \1\ In 2015, we recommended that DOT work with relevant 
stakeholders, such as HHS, to develop a national aviation-preparedness 
plan for communicable diseases. See GAO, Air Travel and Communicable 
Diseases: Comprehensive Federal Plan Needed for U.S. Aviation System's 
Preparedness, GAO-16-127 (Washington, D.C.: Dec. 16, 2015).
    \2\ GAO, COVID-19: Federal Efforts Could be Strengthened by Timely 
and Concerted Actions, GAO-20-701 (Washington, D.C.: September 21, 
2020).
---------------------------------------------------------------------------
    In June 2020, in the absence of efforts to develop a plan, we urged 
Congress to take legislative action to require the Secretary of 
Transportation to work with relevant agencies and stakeholders, such as 
HHS and DHS, and members of the aviation and public health sectors, to 
develop a national aviation-preparedness plan.\3\ While FAA has 
provided some guidance to the aviation industry in response to the 
COVID-19 pandemic, we continue to believe that DOT is in the best 
position to work with its relevant stakeholders to develop a national 
aviation-preparedness plan, which could guide preparation for 
individual airlines and airports, as well as establish a framework for 
communication and response for the next communicable disease outbreak. 
Furthermore, as we reported in 2020, FAA and DOT have stronger and 
deeper ties to, as well as oversight responsibility for, the relevant 
stakeholders that would be most involved in such a broad effort, namely 
airlines, airports, and other aviation stakeholders. In addition, DOT's 
Office of the Secretary is the liaison to International Civil Aviation 
Organization (ICAO) for Annex 9 to the Chicago Convention--an 
international aviation treaty to which the United States is a 
signatory--in which the relevant ICAO standard that obligates member 
states to develop a national aviation-preparedness plan is 
contained.\4\ We urge Congress to take swift action to require a 
national aviation-preparedness plan, without which the U.S. will not be 
as prepared to minimize and quickly respond to ongoing and future 
communicable disease events.
---------------------------------------------------------------------------
    \3\ Priority Open Recommendations: Department of Transportation. 
GAO-21-591PR. (Washington, D.C.: Jun. 25, 2021) and GAO, COVID-19: 
Opportunities to Improve Federal Response and Recovery Efforts, GAO-20-
625 (Washington, D.C.: Jun. 25, 2020). As we reported in July 2021, 
legislation related to a national aviation-preparedness plan has been 
introduced in the current legislative session, as well as in previous 
sessions. For example, in October 2020, H.R. 8712, National Aviation 
Preparedness Plan Act of 2020, was introduced. If enacted, this bill 
would have required the Department of Transportation, in collaboration 
with DHS, HHS, and other aviation stakeholders, to develop a national 
plan to prepare the aviation industry for future communicable disease 
outbreaks. Further, in February 2021, H.R. 884, the National Aviation 
Preparedness Plan Act of 2021, was introduced in the House of 
Representatives, and in May 2021, S. 82, Ensuring Health Safety in the 
Skies Act of 2021, was reported favorably out of the Senate Committee 
on Commerce, Science, and Transportation. For additional information, 
see GAO, COVID-19: Continued Attention Needed to Enhance Federal 
Preparedness, Response, Service Delivery, and Program Integrity, GAO-
21-551 (Washington, D.C.: July 19, 2021). Since our July 2021 report, 
none of these bills have advanced.
    \4\ GAO, Air Travel and Communicable Diseases: Status of Research 
Efforts and Action Still Needed to Develop Federal Preparedness Plan, 
GAO-20-655T (Washington, D.C.: Jun. 23, 2020).

    b.  Can you also describe the importance of establishing a national 
aviation strategy?
    Answer. A national aviation-preparedness plan could help maximize 
an effective response to a public health threat, while minimizing 
potential inefficiencies in the national response effort and 
unnecessary disruptions to the national aviation system, and could 
ensure that individual airport and airline plans work in accordance 
with one another, among other things.\5\ For example, while the 14 
airports and 3 airlines we reviewed in 2015 had plans that address 
communicable disease threats from abroad, representatives from these 
airports and airlines reported facing multiple challenges in responding 
to threats. These challenges included obtaining guidance; communication 
and coordination among responders; and assuring employees have 
appropriate training, equipment, and sanitary workplaces. A national 
aviation-preparedness plan to respond to communicable disease outbreaks 
could help address these challenges. In addition, as stated above, 
under the Chicago Convention, the United States has obligated itself to 
implement standards that include a national aviation-preparedness plan 
for communicable disease outbreaks.\6\ In 2017, a joint evaluation of 
U.S. capacity to prevent, detect and rapidly respond to public health 
threats of a natural, deliberate or accidental nature highlighted the 
absence of a comprehensive national aviation-preparedness plan aimed at 
preventing and containing the spread of diseases, which would include 
points of entry not already covered by the Centers for Disease Control 
and Prevention (CDC).\7\
---------------------------------------------------------------------------
    \5\ GAO-16-127.
    \6\ Member states, including the United States, are obligated to 
establish regulations or take other appropriate steps to implement 
International Civil Aviation Organization standards within their own 
civil aviation systems. Additionally, member states are obligated to 
notify the International Civil Aviation Organization of a 
``difference'' from the international standard, if they find it 
impractical to fully comply with an international standard or otherwise 
differ from the standard in their regulations or practices. Chicago 
Convention on International Civil Aviation art. 38, Apr. 4, 1944, 61 
Stat 1180, T.I.A.S. No. 1,591
    \7\ World Health Organization. Joint External Evaluation of IHR 
Core Capacities of the United States of America: Mission Report, June 
2016. (Geneva: 2017).
---------------------------------------------------------------------------
    The COVID-19 pandemic has further highlighted the need for a 
national aviation-preparedness plan. Stakeholders publicly highlighted 
piecemeal response efforts that may have led to some of the confusion 
among stakeholders and chaos at certain airports that occurred earlier 
in 2020 following travel restrictions as a result of COVID-19, as well 
as increased screening efforts. For example, as we reported in June 
2020, stakeholders described actions taken by individual airlines in 
the absence of FAA guidance, such as to cease operations to certain 
countries, and a piecemeal approach to establishing standards for 
safely continuing or expanding service. This piecemeal approach points 
to the continued need for DOT to implement our 2015 recommendation to 
develop a coordinated effort to plan for and respond to communicable 
disease threats or for Congress to take legislative action, as we 
recommended in 2020, to require DOT to work with relevant agencies and 
stakeholders to develop such a plan. Without a national aviation-
preparedness plan, the United States remains insufficiently prepared to 
respond to communicable disease threats, now and in the future.

  Question from Hon. Salud O. Carbajal to Chris P. Currie, Director, 
  Homeland Security and Justice, U.S. Government Accountability Office

    Question 1. Since 2011, the Government Accountability Office (GAO) 
has called for interagency planning to address nationally significant 
biological events. The ongoing COVID-19 pandemic is showing us the need 
for a whole-of-government approach to address biological threats.
    What steps has FEMA and the federal government taken to protect our 
nation against biological threats?
    Answer. Effectively preparing for and responding to biological 
incidents, including infectious disease outbreaks and pandemics, 
requires engagement and commitment from the entire biodefense 
enterprise. At the highest level, national strategies, such as the 
National Biodefense Strategy, are designed to help guide preparedness 
activities by providing long-range strategic vision to guide 
policymaking. The Department of Homeland Security (DHS) was one of four 
agencies required by law to jointly develop a national biodefense 
strategy and associated implementation plan.\1\ The Strategy outlines a 
whole-of-government approach intended to help the United States 
actively and effectively assess, prevent, prepare for, respond to, and 
recover from all types of biological threats, whether they are natural, 
accidental, or deliberate.
---------------------------------------------------------------------------
    \1\ Signed into law on December 23, 2016, the National Defense 
Authorization Act for Fiscal Year 2017 required the Secretaries of 
Defense, Health and Human Services, Homeland Security, and Agriculture 
to jointly develop a national biodefense strategy and associated 
implementation plan, which shall include a review and assessment of 
biodefense policies, practices, programs and initiatives. Such 
Secretaries shall review and, as appropriate, revise the strategy 
biennially. See Pub. L. No. 114-328, div. A, title X, subtitle G, Sec.  
1086, 130 Stat. 2000, 2423-24 (2016) (classified, as amended, at 6 
U.S.C. Sec.  104).
---------------------------------------------------------------------------
    In August 2021, we issued a report on steps taken by the federal 
government to protect our nation against biological threats.\2\ 
Specifically, we found that the key federal agencies, including the 
Departments of Homeland Security (DHS), Defense (DOD), Health and Human 
Services (HHS), and Agriculture (USDA), developed a range of 
interagency response plans to prepare for nationally significant 
biological incidents. These strategic, operational, and tactical level 
plans address responding to a broad spectrum of biological threats, 
including those that are natural, accidental, or deliberate. At the 
time of our review, agencies were reviewing and revising a key planning 
document for responding to biological incidents. Officials GAO 
interviewed stated this revision would incorporate lessons learned from 
the ongoing COVID-19 pandemic, as well as lessons learned from a major 
biological incident exercise conducted in 2019 (Crimson Contagion).
---------------------------------------------------------------------------
    \2\ GAO, Biodefense: After-Action Findings and COVID-19 Response 
Revealed Opportunities to Strengthen Preparedness, GAO-21-513 
(Washington, D.C., Aug. 4, 2021).
---------------------------------------------------------------------------
    DHS, DOD, HHS, and USDA conducted numerous interagency exercises to 
help prepare for and respond to a wide variety of biological incidents, 
such as anthrax attacks, influenza pandemics, and diseases affecting 
plants and animals. Specifically, GAO identified 74 interagency 
biological incident exercises conducted from calendar years 2009 
through 2019.
    GAO also reported that FEMA's initial review of the COVID-19 
response demonstrated that capabilities needed for nationally 
significant biological incidents were underdeveloped. In its January 
2021 assessment of its response activities during the initial phase of 
the pandemic, FEMA recognized that its ability to anticipate state, 
local, and other nonfederal requirements during the pandemic was 
affected by an insufficient understanding of projected consequences and 
capabilities of such partners.
    Through the National Exercise Program, FEMA facilitates interagency 
feedback and reviews after-action reports to develop priorities for the 
next National Exercise Program cycle. However, analysis of after-action 
reports submitted to the program do not reflect the comprehensive view 
of all exercises conducted across the nation. The National Exercise 
Program is only one line of effort to conduct exercises, meaning 
analysis done through this effort does not encapsulate all exercise or 
real-world incident findings.
    In our August 2021 report, we found that the Biodefense 
Coordination Team is uniquely positioned to carry out activities to 
enhance preparedness and response for future biological incidents.\3\ 
For example, based on our analysis of after-action reports for selected 
interagency biological incident exercises and real-world incidents, as 
well as findings from the COVID-19 response, we found that the 
biodefense enterprise has gaps in its capabilities-based approach to 
response planning. Specifically, we found the biodefense enterprise 
lacked elements necessary for preparing for nationally significant 
biological incidents, including:
---------------------------------------------------------------------------
    \3\ The Biodefense Coordination Team helps carry out the strategic 
goals and objectives of the National Biodefense Strategy on behalf of 
the secretaries of participating departments and agencies, including 
the Secretary of Homeland Security.
---------------------------------------------------------------------------
      a set of defined capabilities that account for the unique 
elements specific to responding to nationally significant biological 
incidents;
      a process at the interagency level for agencies to assess 
and communicate priorities for exercising capabilities;
      a process to consistently report on those capabilities in 
after-action reviews; and
      routine monitoring at the interagency level of exercises 
and real-world incidents in order to evaluate lessons learned across 
the government, identify patterns and possible root causes for systemic 
challenges, and make recommendations to address these challenges.

    We made four recommendations to DHS to help ensure the Biodefense 
Coordination Team develops ways to address the above stated 
deficiencies. We reported that the ability to monitor and assess the 
outcomes of interagency biological incident exercises and real-world 
events could be instrumental in identifying persistent challenges and 
their root causes before they become systemic, intractable problems. 
Identifying these issues could also help agencies prioritize which 
capabilities need further development or exercising.

   Questions from Hon. Steve Cohen to Hon. Eric J. Soskin, Inspector 
               General, U.S. Department of Transportation

    Question 1. In June of last year, your office sent a letter to the 
Secretary of Transportation outlining key potential risk areas for the 
Department in overseeing its implementation of the CARES Act and 
suggesting actions to mitigate these risks. One of the areas you 
identified as being subject to risk included airport grants.
    a.  What were the key potential risk areas that your office 
identified?
    Answer. We identified 5 key potential risk areas: effectively 
managing grants to support the Nation's airports; adapting existing 
stewardship and oversight approaches while making prudent use of 
waivers in surface transportation; executing contracts and grants 
effectively to achieve transportation program and project outcomes; 
tracking and monitoring CARES Act funds while ensuring the availability 
and integrity of DOT's financial management systems; and increasing 
outreach and education to transportation agencies to prevent and detect 
fraud, waste, and abuse.

    b.  What if anything did your office hear back from the previous 
Secretary last year after sending this letter?
    Answer. After sending this memorandum, we did not hear back from 
the previous Secretary on this subject.

    Question 2. Can you describe in detail what your office is doing to 
make sure that the smaller airports that received these unusually large 
grants are spending it properly and in accordance with FAA grant 
requirements?
    Answer. To ensure that the unusually large grants given to smaller 
airports are used appropriately and in accordance with FAA grant 
requirements, we are conducting a thorough audit to assess whether 
FAA's policies and procedures for awarding and overseeing CARES Act 
grants are sufficient to protect taxpayer interests. Our assessment of 
FAA's oversight includes a review of airports' grant expenditure rates 
and compliance with the Revenue Use Policy. We will also assess 
airports' action plans for funds in excess of the initial grant 
amount--which FAA capped at four times the airport's annual operating 
expenses--as well as FAA's approach for monitoring unexpended funds. We 
expect to complete this work in the winter of 2022.

 Question from Hon. Stephen F. Lynch to Hon. Eric J. Soskin, Inspector 
               General, U.S. Department of Transportation

    Question 1. We recently had a brand new N93 mask manufacturer set 
up shop in my district, in Bridgewater, Massachusetts. They anticipated 
they would be welcomed by hospitals, schools, businesses and State, 
local and Federal Government agencies. However, they have struggled to 
obtain any sizable contracts for PPE because the purchasing agents of 
local hospitals, businesses and government agencies continue to 
maintain contracts with Chinese suppliers. These purchasing agents have 
lucrative contracts with these Chinese manufacturers and don't want to 
let that go. The Chinese manufacturers have also lowered their prices 
and made it more profitable for these purchasing agents and companies 
and agencies.
    I would like to know the terms to the actual supply contracts at 
DOT. Can we have copies of their PPE purchasing contracts? These should 
be a matter of public record so we know to whom and how much our 
agencies are spending.
    Answer. We do not have ongoing audit work related to DOT's supply 
contracts and do not have copies of the referenced supply contracts in 
our audit files. Copies of DOT's executed contracts or modifications to 
such contracts are a matter of public record; however, the Agency would 
have to gather and provide copies of these contracts and/or 
modifications in order to make this information publicly accessible. 
For this reason, we believe the answers to Representative Lynch's 
questions could be answered more expeditiously by requesting this 
information directly from DOT.

ASSESSING THE FEDERAL GOVERNMENT'S COVID-19 RELIEF AND RESPONSE EFFORTS 
                         AND ITS IMPACT--PART 2

                              ----------                              


                      THURSDAY, SEPTEMBER 30, 2021

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to call, at 10:05 a.m., in room 
2167 Rayburn House Office Building and via Zoom, Hon. Peter A. 
DeFazio (Chair of the committee) presiding.
    Members present in person: Mr. DeFazio, Mr. Larsen, Mr. 
Garamendi, Mr. Carbajal, Mr. Lamb, Mr. Auchincloss, Ms. 
Williams of Georgia, Mr. Crawford, Mr. Webster, Mr. Perry, Mr. 
Graves of Louisiana, Mr. Rouzer, Mr. Weber, Mr. LaMalfa, Mr. 
Westerman, Mr. Balderson, Mr. Burchett, Mr. Guest, and Mr. 
Nehls.
    Members present remotely: Ms. Norton, Ms. Johnson of Texas, 
Mrs. Napolitano, Mr. Johnson of Georgia, Ms. Brownley, Mr. 
Payne, Mr. Lowenthal, Mr. DeSaulnier, Mr. Brown of Maryland, 
Mr. Stanton, Ms. Davids, Mr. Garcia of Illinois, Mr. Delgado, 
Mr. Moulton, Mr. Carter of Louisiana, Mr. Massie, Mr. Katko, 
Mr. Fitzpatrick, Miss Gonzalez-Colon, Mr. Johnson of South 
Dakota, Dr. Van Drew, Mr. Gimenez, and Mrs. Steel.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                           September 24, 2021
    SUMMARY OF SUBJECT MATTER

    TO:       Members, Committee on Transportation and Infrastructure
    FROM:   Staff, Committee on Transportation and Infrastructure
    RE:       Full Committee Hearing on ``Assessing the Federal 
Government's COVID-19 Relief and Response Efforts and Its Impact: Part 
II''
_______________________________________________________________________

                                PURPOSE
    The Committee on Transportation and Infrastructure (T&I) will meet 
on Thursday, September 30, 2021, at 10:00 a.m. EDT in 2167 Rayburn 
House Office Building and via Zoom to hold a hearing titled ``Assessing 
the Federal Government's COVID-19 Relief and Response Efforts and Its 
Impact: Part II.'' Part I of this hearing series was held on July 29, 
2021, and testimony was received by government witnesses on the federal 
government's COVID response and relief efforts. This hearing will 
examine the federal response to the COVID-19 pandemic and the impact of 
pandemic relief efforts on the transportation and infrastructure 
sectors and their workers.
    The Committee will hear testimony from the American Public 
Transportation Association (APTA), the International Association of 
Emergency Managers (IAEM), the Hoover Institution at Stanford 
University, the Hamilton Project at the Brookings Institution, and the 
Transport Workers Union of America (TWU).
                               BACKGROUND
    In response to the COVID-19 pandemic, Congress and the Executive 
Branch took a range of actions to protect the health and economic 
security of American individuals and businesses. Congress included $5.9 
trillion of relief and job protection measures in the CARES Act, the 
Consolidated Appropriations Act of 2021, the American Rescue Plan, and 
other legislation.\1\ Federal agencies, including the Federal Emergency 
Management Agency (FEMA), the operating administrations within the 
Department of Transportation (DOT), and the U.S. Department of the 
Treasury (Treasury) are responsible for administering and overseeing 
more than $200 billion in federal assistance provided for 
transportation and emergency management.\2\ These agencies also conduct 
other pandemic response and recovery functions. For example, FEMA 
helped supply states and localities with personal protective equipment, 
distributed vaccine, and testing supplies, and reimbursed for many 
activities tied to the COVID-19 pandemic response.\3\ Within DOT, the 
Federal Aviation Administration (FAA), the Federal Transit 
Administration (FTA), and other department components provided 
pandemic-related guidance and support to their respective modes to help 
keep employees and passengers on our nation's transportation systems 
safe.\4\
---------------------------------------------------------------------------
    \1\ CARES Act, Pub. L. No. 116-136 (2020); Consolidated 
Appropriations Act, 2021, Pub. L. No. 116-260 (2020); American Rescue 
Plan Act of 2021, Pub. L. No. 117-2 (2021).
    \2\ U.S Department of the Treasury, ``Coronavirus Economic Relief 
for Transportation Services (CERTS) Program,'' (accessed on July 26, 
2021), available at https://home.treasury.gov/policy-issues/
coronavirus/assistance-for-american-industry/coronavirus-economic-
relief-for-transportation-services, and ``Airline and National Security 
Relief Programs,'' accessed on July 26, 2021, available at https://
home.treasury.gov/policy-issues/coronavirus/assistance-for-american-
industry/airline-and-national-security-relief-programs; Federal Transit 
Administration, ``Novel Coronavirus (COVID-19)'' (accessed on July 26, 
2021), available at https://www.transit.dot.gov/coronavirus; National 
Railroad Passenger Corporation (AMTRAK) Office of Inspector General, 
Governance: Amtrak Continues to Demonstrate Good Stewardship of 
Pandemic Relief Funds, OIG-MAR-2021-009, (May 12, 2021), available at 
https://amtrakoig.gov/sites/default/files/reports/OIG-MAR-2021-
009%20Relief%20Act.pdf; GAO, COVID-19: Continued Attention Needed to 
Enhance Federal Preparedness, Response, Service Delivery, and Program 
Integrity, GAO-21-551, (July 2021), available at https://www.gao.gov/
assets/gao-21-551-highlights.pdf; Federal Aviation Administration, 
``Information for Airports about COVID-19,'' (accessed on July 26, 
2021), available at https://www.faa.gov/airports/special_programs/
covid-19-airports; House Committee on Transportation and 
Infrastructure, ``Chair DeFazio Applauds New Round of Aid for the Hard-
Hit Transportation Sector in Omnibus and COVID Relief Legislation,'' 
December 22, 2020, available at https://transportation.house.gov/news/
press-releases/chair-defazio-applauds-new-round-of-aid-for-the-hard-
hit-transportation-sector-in-omnibus-and-covid-relief-legislation-; 
FEMA, 100 Days of FEMA and Our Partners in Action (April 30, 2021), 
available at https://www.fema.gov/blog/100-days-fema-and-our-partners-
action.
    \3\ FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID-19): 
Initial Assessment Report, (January 2021), available at https://
www.fema.gov/sites/default/files/documents/fema_covid-19-initial-
assessment-report_2021.pdf;
    \4\ FTA, ``FTA COVID-19 Resource Tool'' (May 7, 2021), available at 
https://www.transit.dot.gov/regulations-and-programs/safety/fta-covid-
19-resource-tool; and FAA, Coronavirus Guidance and Resources from FAA 
(April 19, 2021), available at https://www.faa.gov/coronavirus/
guidance_resources/.
---------------------------------------------------------------------------

PART I OF THE HEARING: OVERSIGHT OF THE FEDERAL RESPONSE

    During Part I of this hearing series, the Committee heard 
testimony from the Government Accountability Office (GAO), the 
Department of Transportation Office of Inspector General (DOT 
OIG), the Department of Homeland Security Office of Inspector 
General (DHS OIG), and the Pandemic Response Accountability 
Committee (PRAC).\5\ These witnesses discussed the work they 
have done to monitor agencies' use of COVID-19 relief and 
response funds, assess the federal government's actions, 
policies, and programs to respond to COVID-19, and identify 
areas for improvement.
---------------------------------------------------------------------------
    \5\ The CARES Act established the Pandemic Response Accountability 
Committee (PRAC) as a committee of the Council of the Inspectors 
General on Integrity and Efficiency (CIGIE), which is composed of 
inspectors general from across the government. See https://
www.pandemicoversight.gov/our-mission/about-the-prac; CARES Act, Pub. 
L. No. 116-136 (2020), Sec. 15010.
---------------------------------------------------------------------------

IMPACT OF FEDERAL COVID-19 RESPONSE AND RELIEF EFFORTS

    The policies and programs the federal government has 
implemented over the course of the pandemic have had wide-
ranging and significant impacts. States and localities received 
assistance to help vaccinate their residents.\6\ Businesses and 
public sector agencies retained workers that they otherwise 
would have laid off.\7\ The nation's transportation systems 
continued to operate safely, providing transportation for 
essential workers and others.\8\ Moreover, the economy as a 
whole is beginning to recover as the economy opens back up with 
gross domestic product expected to show an increase this year 
after dropping to an annual rate of 31.4 percent in Q2 2020.\9\ 
However, there are concerns about the effect of inflation on 
this recovery.\10\ The current Consumer Price Index (CPI) rose 
5.3 percent over the year ending in August 2021.\11\
---------------------------------------------------------------------------
    \6\ FEMA, 100 Days of FEMA and Our Partners in Action (April 30, 
2021), available at https://www.fema.gov/blog/100-days-fema-and-our-
partners-action.
    \7\ General Aviation Manufacturers Association, Protecting Aviation 
Manufacturing and Maintenance Jobs, (March 10, 2021), available at 
https://gama.aero/news-and-events/press-releases/protecting-aviation-
manufacturing-and-maintenance-jobs/, Amalgamated Transit Union, Relief 
on the way for transit and working families with American Rescue Plan 
(March 10, 2021), available at https://www.atu.org/media/releases/atu-
relief-on-the-way-for-transit-and-working-families-with-american-
rescue-plan.
    \8\ Id.
    \9\ Congressional Research Service, COVID-19 and the U.S. Economy 
(May 11, 2021), available at https://crsreports.congress.gov/product/
pdf/R/R46606.
    \10\ Rachel Siegel, Biden Says Fed `should take whatever steps it 
deems necessary' to respond to inflation, Wash. Post. (July 19, 2021), 
available at https://www.washingtonpost.com/us-policy/2021/07/19/biden-
powell-inflation-economy/.
    \11\ U.S. Department of Labor, Bureau of Labor Statistics, Consumer 
Price Index (Sept. 14, 2021), available at https://www.bls.gov/
news.release/cpi.nr0.htm.

    LFEMA's Assistance to States, Localities, Tribes, 
---------------------------------------------------------------------------
Territories, and Individuals

    The COVID-19 pandemic posed an unprecedented challenge to 
the disaster response capabilities of states, localities, 
tribes, and territories. As the lead federal agency for the 
COVID-19 response, FEMA has undertaken expansive efforts to 
help them, and to assist individuals suffering from the 
economic hardships of the pandemic.\12\ Since January 2020, 
FEMA has taken the following actions, among others:
---------------------------------------------------------------------------
    \12\ FEMA, 100 Days.
---------------------------------------------------------------------------
     LProvided more than $4.75 billion in support of 
vaccination efforts in communities across the country.\13\
---------------------------------------------------------------------------
    \13\ Id.
---------------------------------------------------------------------------
     LWorked with its federal, state, and local 
partners to establish 1,732 new community vaccination 
centers.\14\
---------------------------------------------------------------------------
    \14\ Id.
---------------------------------------------------------------------------
     LCoordinated with the Department of Health and 
Human Services to deliver, as of September 2020, 249 million 
N95 masks, 1.1 billion surgical masks, 46.7 million eye and 
face shields, 432 million surgical gowns or coveralls, and more 
than 28.6 billion gloves.\15\
---------------------------------------------------------------------------
    \15\ Id.
---------------------------------------------------------------------------
     LProvided funding to nonprofits, faith-based 
organizations, and government entities that provide shelter, 
food, transportation, COVID-19 testing, and medical care to 
their communities.\16\
---------------------------------------------------------------------------
    \16\ Id.
---------------------------------------------------------------------------
     LObligated, as of the end of September 2020, $42.6 
billion as a supplemental benefit for unemployment insurance 
benefits.\17\
---------------------------------------------------------------------------
    \17\ FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID-
19): Initial Assessment Report. FEMA's Lost Wages Assistance (LWA) 
program was unprecedented because it was instituted as a new program 
despite another discrete Stafford Act section on disaster unemployment 
assistance (Sec. 410). FEMA failed to provide the Committee with a 
legal justification memo explaining why or how LWA was administered as 
it was despite section 410.
---------------------------------------------------------------------------
     LIn January 2021, the federal cost-share for a 
majority of eligible FEMA assistance for all COVID-19 related 
Emergency and Major Disasters was expanded to 100 percent and 
made applicable to costs of eligible activities from the 
beginning of the pandemic incident period on January 20, 2020, 
to September 30, 2021.\18\
---------------------------------------------------------------------------
    \18\ FEMA, FEMA Statement on 100% Cost Share (February 3, 2021) 
available at https://www.fema.gov/press-release/20210203/fema-
statement-100-cost-share.

---------------------------------------------------------------------------
    LAviation Industry

    As a result of the pandemic, air passenger demand fell far 
below prior years and, according to some industry analysts, a 
return to pre-pandemic traffic levels might not occur until 
2023.\19\ The number of passengers going through Transportation 
Security Administration (TSA) checkpoints increased in 2021 but 
remains below pre-pandemic levels. In August 2021, for example, 
TSA traveler throughput was almost 23 percent lower than in 
August 2019.\20\ As a result of this decline in passenger 
demand and other factors, U.S. passenger airlines recorded $4.3 
billion in pre-tax losses in the first half of 2021 and are 
projecting pre-tax losses of $18 billion this year, according 
to Airlines for America.\21\ Similarly, Airports Council 
International-North America (ACI-NA) expects that U.S. airports 
will lose at least $40 billion by March 2022 because of the 
prolonged decline in commercial aviation traffic.\22\
---------------------------------------------------------------------------
    \19\ GAO, COVID-19 Pandemic: Preliminary Observations on Efforts 
toward and Factors Affecting the Aviation Industry's Recovery, GAO-21-
412T (March 2, 2021) available at https://www.gao.gov/assets/gao-21-
412t.pdf.
    \20\ See, e.g., TSA, TSA Checkpoint Travel Numbers, (last accessed 
September 3, 2021), available at https://www.tsa.gov/coronavirus/
passenger-throughput.
    \21\ Airlines for America, Impact of COVID-19: Data Updates, 
(September 2, 2021) (last accessed September 3, 2021), available at 
https://www.airlines.org/dataset/impact-of-covid19-data-updates/; 
Statement of Mr. Nicholas E. Calio, President and Chief Executive 
Officer, Airlines For America, ``COVID-19's Effects on U.S. Aviation 
and The Flight Path to Recovery'' before the United States House 
Committee on Transportation and Infrastructure Subcommittee on 
Aviation, (March 2, 2021) available at https://
transportation.house.gov/imo/media/doc/Calio%20Testimony.pdf.
    \22\ Airports Council International, Airports Council Applauds 
Passage of $8 Billion in COVID-19 Relief for Airports (March 10, 2021) 
(last accessed July 19, 2021), available at https://
airportscouncil.org/press_release/airports-council-applauds-passage-of-
8-billion-in-covid-19-relief-for-airports/
---------------------------------------------------------------------------
    The Payroll Support Program (PSP) was created to prevent 
layoffs in this hard-hit sector. Congress has appropriated $63 
billion to this program, which provides financial assistance to 
airlines, manufacturers, and other related businesses for 
employee wages, salaries, and benefits.\23\ According to the 
General Aviation Manufacturers Association, PSP has allowed 
companies to keep highly skilled workers in the industry and 
supported some of the smaller companies that needed assistance 
to maintain operations.\24\ Airlines were able to preserve the 
jobs of flight attendants, pilots, mechanics, gate agents, and 
others, according to Airlines for America.\25\
---------------------------------------------------------------------------
    \23\ House Committee on Transportation and Infrastructure, Chair 
DeFazio Applauds Inclusion of T&I Provisions, Including Payroll Support 
Program Extension, in House Democrats' Latest COVID-19 Relief Package, 
(September 29, 2020), available at https://transportation.house.gov/
news/press-releases/chair-defazio-applauds-inclusion-of-tandi-
provisions-including-payroll-support-program-extension-in-house-
democrats-latest-covid-19-relief-package; U.S. Department of the 
Treasury, Airline and National Security Relief Programs (accessed on 
May 7, 2021), available at https://home.treasury.gov/policy-issues/
coronavirus/assistance-for-american-industry/airline-and-national-
security-relief-programs.
    \24\ General Aviation Manufacturers Association, Protecting 
Aviation Manufacturing and Maintenance Jobs, (March 10, 2021), 
available at https://gama.aero/news-and-events/press-releases/
protecting-aviation-manufacturing-and-maintenance-jobs/.
    \25\ Airlines for America, Statement from A4A CEO and President 
Nicholas E. Calio on the Passage of the American Rescue Plan (March 10, 
2021), available at https://www.airlines.org/news/statement-from-a4a-
ceo-and-president-nicholas-e-calio-on-the-passage-of-the-american-
rescue-plan/.
---------------------------------------------------------------------------
    Congress also appropriated about $20 billion in grant 
assistance to help airports respond to the COVID-19 pandemic, 
including funds for operating expenses, debt service, and other 
expenses.\26\ The additional grants are helping airports offset 
some of the financial damage from the abrupt, unexpected drop 
in air travel that resulted from precautions to limit the 
spread of COVID-19, according to ACI-NA.\27\
---------------------------------------------------------------------------
    \26\ GAO, COVID-19: Sustained Federal Action Is Crucial as Pandemic 
Enters Its Second Year, GAO-21-387 (March 31, 2021) available at 
https://files.gao.gov/reports/GAO-21-387/index.html.
    \27\ Airports Council International, Airports Council Statement on 
CARES Act Grants (last accessed July 19, 2021) available at https://
airportscouncil.org/press_release/airports-council-international-north-
america-statement-on-cares-act-grants/

---------------------------------------------------------------------------
    LTransit Agencies

    COVID-19 and the resulting shelter-in-place orders, 
business closures, suspension of tourism, increasing 
unemployment, and increasing numbers of employees working from 
home significantly decreased public transit and commuter rail 
ridership.\28\ Nationally, transit ridership in 2020 was down a 
historic 79 percent at the start of the pandemic compared to 
2019 levels.\29\ Transit agencies anticipate long-term 
consequences from the COVID-19 pandemic, including reduced 
demand for service, increased operating costs, and limited 
state and local funding.\30\ According to APTA, when the 
economy does begin to recover, transit agencies will still be 
challenged with severe fiscal constraints as a result of 
physical distancing requirements that reduce vehicle capacity, 
increased costs of facility and vehicle cleaning and 
disinfection, and decreased ridership due to the dramatic 
increase in telework.\31\
---------------------------------------------------------------------------
    \28\ Abby Vesoulis, The Future of American Public Transit Depends 
on Congress, Time (December 17, 2020), available at https://time.com/
5921917/mass-transit-covid-congress/.
    \29\ American Public Transportation Association, The Impact of the 
COVID-19 Pandemic on Public Transit Funding Needs in the U.S. (January 
27, 2021), available at https://www.apta.com/wp-content/uploads/APTA-
COVID-19-Funding-Impact-2021-01-27.pdf.
    \30\ Supra, n. 9, GAO-21-387.
    \31\ American Public Transportation Association, The Impact of the 
COVID-19 Pandemic on Public Transit Funding Needs in the U.S. (January 
27, 2021), available at https://www.apta.com/wp-content/uploads/APTA-
COVID-19-Funding-Impact-2021-01-27.pdf.
---------------------------------------------------------------------------
    The CARES Act and subsequent pandemic relief funding have 
provided about $67.25 billion in grant assistance to help 
transit agencies manage these fiscal constraints.\32\ So far, 
$37.94 billion, or 56 percent of the funds, has been obligated 
and $23.45 billion, or 35 percent, has been spent.\33\ Federal 
relief funds also allowed transit agencies to keep critical 
service running, avoid layoffs, and provide workers and riders 
with COVID-19 protections.\34\ As a result, some transit 
agencies across the country have restored previously reduced 
service or have canceled plans to further cut service.\35\ 
Transit agencies have also used the funds to mitigate the 
spread of COVID-19, including through enhanced cleaning and 
sanitation and social distancing.\36\ Further, restoring 
transit service is expected to help the nation's economic 
recovery, such as in New York City, where the economy depends 
on trains and buses to carry riders to businesses, including 
theaters, retail stores, and restaurants, that have been 
crippled by the pandemic.\37\
---------------------------------------------------------------------------
    \32\ This includes $25 billion from the CARES Act, $14 billion from 
the Consolidated Appropriations Act, 2021, and $28.25 billion from the 
American Rescue Plan. See https://www.transportation.gov/mission/
budget/usdot-covid-19-relief-funding.
    \33\ U.S. Department of Transportation COVID-19 Relief Funding 
Status (last updated Sept. 13, 2021), available at https://
www.transportation.gov/mission/budget/usdot-covid-19-relief-funding.
    \34\ Amalgamated Transit Union, Relief on the way for transit and 
working families with American Rescue Plan (March 10, 2021) available 
at https://www.atu.org/media/releases/atu-relief-on-the-way-for-
transit-and-working-families-with-american-rescue-plan.
    \35\ Christina Goldbaum and Pranshu Verma, Transit Got $30 Billion 
in Stimulus Aid. What Does That Mean for Riders?, The New York Times 
(March 15, 2021), available at https://www.nytimes.com/2021/03/15/
nyregion/biden-stimulus-public-transportation.html.
    \36\ Supra, n. 9, GAO-21-387.
    \37\ Goldbaum and Verma, Transit Got $30 Billion.
---------------------------------------------------------------------------
    LOther Transportation Sectors

    Operators of motorcoaches, school buses, and passenger 
vessels have also suffered the financial effects of lower 
demand for their services due to the pandemic. For example, 
though passenger ships operating exclusively inside the United 
States have begun to resume operations, virtually the entire 
U.S. domestic commercial passenger fleet, including overnight 
excursions, day charters, and tours, was forced to shut down 
for a year.\38\ Companies operating commuter shuttle buses and 
private bus charters also were forced to suspend service due to 
lack of passengers, and some went out of business entirely, 
according to the American Bus Association.\39\
---------------------------------------------------------------------------
    \38\ Letter from Passenger Vessel Association to Speaker Nancy 
Pelosi (April 8, 2020), available at http://www.passengervessel.com/
downloads/letters/2020-CARES-ACT-2-Speaker-Pelosi.pdf; The Maritime 
Executive, American Coastal and River Cruising is Resuming (March 16, 
2021), available at https://www.maritime-executive.com/article/
american-coastal-and-river-cruising-is-resumming.
    \39\ American Bus Association, New Report Details Motorcoach 
Industry's Dire Situation (August 10, 2020), available at https://
www.buses.org/news/article/new-report-details-motorcoach-industrys-
dire-situation.
---------------------------------------------------------------------------
    The Coronavirus Economic Relief for Transportation Services 
(CERTS) Program was created to support companies such as 
motorcoach, school bus, passenger vessel, and pilot vessel 
companies that were affected by the COVID-19 pandemic.\40\ 
Under the program, up to $2 billion in grants is made available 
to eligible companies that certify they have experienced an 
annual revenue loss of 25 percent or more as a direct or 
indirect result of COVID-19.\41\ Grant funds administered 
through the CERTS program are primarily used to cover payroll 
costs but may also be used to cover the acquisition of 
services, supplies, and the cost of operating and maintaining 
equipment, among other things.\42\ Applications for CERTS 
grants were due to Treasury by July 19, 2021, and grants will 
be paid out with two payments, the first representing 
approximately 80 percent of the award amount, with the 
remaining 20 percent to be paid out to the extent funds are 
available.\43\ The first grant agreements were made on August 
13, 2021, with 1,327 grant agreements and first payments issued 
as of September 1, 2021.\44\
---------------------------------------------------------------------------
    \40\ U.S. Department of the Treasury, Coronavirus Economic Relief 
for Transportation Services (CERTS) Program, available at https://
home.treasury.gov/policy-issues/coronavirus/assistance-for-american-
industry/coronavirus-economic-relief-for-transportation-services.
    \41\ Id., and Guidelines for the Coronavirus Economic Relief for 
Transportation Services (CERTS) Grant Program (May 6, 2021), available 
at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-
american-industry/coronavirus-economic-relief-for-transportation-
services.
    \42\ U.S. Department of the Treasury, Coronavirus Economic Relief 
for Transportation Services (CERTS) Program and Guidelines for the 
Coronavirus Economic Relief for Transportation Services (CERTS) Grant 
Program (May 6, 2021), available at https://home.treasury.gov/policy-
issues/coronavirus/assistance-for-american-industry/coronavirus-
economic-relief-for-transportation-services. According to the CERTS 
guidelines Treasury published on May 6, 2021, to be eligible for 
payments under this program, companies must be established or organized 
in the United States or pursuant to federal law and must have a 
majority of employees in the United States, among other things. 
Further, passenger vessel companies must carry out their principal 
business using one or more passenger vessels of the United States (as 
each is defined in 46 USC Sec.  2101) that (a) are for hire with a 
capacity of 6 to 2,400 passengers and (b) have U.S. Coast Guard issued 
Certificates of Inspection.
    \43\ U.S. Department of the Treasury, Coronavirus Economic Relief 
for Transportation Services (CERTS) Program and Guidelines for the 
Coronavirus Economic Relief for Transportation Services (CERTS) Grant 
Program (May 6, 2021, updated August 12, 2021) (accessed September 3, 
2021), available at https://home.treasury.gov/policy-issues/
coronavirus/assistance-for-american-industry/coronavirus-economic-
relief-for-transportation-services
    \44\ U.S. Department of the Treasury, Coronavirus Economic Relief 
for Transportation Services (CERTS) Grant Payments, (Data set published 
September 1, 2021) (accessed on September 3, 2021), available at 
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-
american-industry/coronavirus-economic-relief-for-transportation-
services/Coronavirus-Economic-Relief-for-Transportation-Services-CERTS-
Grant-Payments

---------------------------------------------------------------------------
    LFederal Requirements for Masking on Transportation

    In addition to providing financial assistance to mitigate 
the pandemic's economic impact, the federal government also 
took action to promote mask-wearing on transportation systems 
as a way to help reduce the spread of the virus. In January 
2021, the Centers for Disease Control (CDC) issued an order 
requiring the wearing of masks by all passengers and workers on 
public conveyances (e.g., airplanes, ships, ferries, trains, 
subways, buses, taxis, and rideshares) in the United 
States.\45\ Shortly thereafter, the TSA issued Security 
Directives and an Emergency Amendment to implement the CDC 
order and President Biden's Executive Order on Promoting COVID-
19 Safety in Domestic and International Travel that required 
passengers and workers to wear face masks ``in airports, bus 
and rail stations, as well as while on passenger aircraft, 
public transportation, passenger railroads, and over-the-road 
buses operating on scheduled fixed-routes.'' \46\ The TSA 
directives currently expire January 18, 2022.\47\ The operating 
administrations within DOT have also taken steps to ensure that 
operators under their purview implement this requirement. For 
example, in February 2021, FTA updated its Master Agreement for 
grantees to include compliance with CDC's mask order, and in 
May 2021, FAA released interim health and occupational safety 
guidance for airlines discussing requirements for mask-
wearing.\48\
---------------------------------------------------------------------------
    \45\ CDC, ``Order Under Section 361 of the Public Health Service 
Act (24 U.S.C. 264) and 42 Code of Federal Regulations 70.2, 71.31(b), 
71.32(b) Requirement for Persons to Wear Masks While on Conveyances and 
at Transportation Hubs,'' January 29, 2021) available at https://
www.cdc.gov/quarantine/pdf/Mask-Order-CDC_GMTF_01-29-21-p.pdf.
    \46\ TSA, ``TSA to implement Executive Order regarding face masks 
at airport security checkpoints and throughout the transportation 
network,'' (January 31, 2021), available at https://www.tsa.gov/news/
press/releases/2021/01/31/tsa-implement-executive-order-regarding-face-
masks-airport-security.
    \47\ TSA, ``Face Mask Requirements: Security Directives and 
Emergency Amendment,'' (last accessed September 7, 2021), available at 
https://www.tsa.gov/sd-and-ea.
    \48\ FTA, ``Master Agreement: For Federal Transit Administration 
Agreements authorized by 49 U.S.C. chapter 53 and Title 23, United 
States Code (Highways), as amended by the Fixing America's Surface 
Transportation (FAST) Act, the Moving Ahead for Progress in the 21st 
Century Act (MAP-21), the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU), the 
SAFETEA-LU Technical Corrections Act of 2008, or other federal laws 
that FTA administers,'' (February 9, 2021) available at https://
www.transit.dot.gov/sites/fta.dot.gov/files/2021-02/FTA-Master-
Agreement-v28-2021-02-09.pdf; FAA, ``Safety Alert for Operators: COVID-
19: Updated Interim Occupational Health and Safety Guidance for Air 
Carriers and Crews,'' (May 25, 2021) available at https://www.faa.gov/
other_visit/aviation_industry/airline_operators/airline_safety/safo/
all_safos/media/2020/SAFO20009.pdf.
---------------------------------------------------------------------------

                               CONCLUSION

    These federal relief efforts have been critical to the 
nation's economic and public health recovery from COVID-19. 
They helped to get needed supplies to states and local 
governments and financial relief to transportation workers and 
U.S. businesses impacted by the pandemic. Having heard from 
federal government witnesses on their oversight work to monitor 
the use of COVID-19 relief and response funds in Part I of this 
hearing series in July 2021, Members will now have an 
opportunity to discuss the impact of the federal government's 
actions on the transportation industry and its workers.

                              WITNESS LIST

     LMr. Paul Skoutelas, President & CEO, American 
Public Transportation Association (APTA)
     LMr. Juan Ortiz, Director of Homeland Security and 
Emergency Management, City of Austin, Texas--on behalf of the 
International Association of Emergency Managers (IAEM)
     LDr. Michael J. Boskin, T.M. Friedman Professor of 
Economics and Senior Fellow, Hoover Institution, Stanford 
University
     LDr. Wendy Edelberg, PhD, Director, The Hamilton 
Project, The Brookings Institution
     LMr. John Samuelsen, Transport Workers Union of 
America (TWU)
    Mr. DeFazio. The Committee on Transportation and 
Infrastructure will come to order.
    I ask unanimous consent that the chair be authorized to 
declare a recess at any time during today's hearing. Without 
objection, so ordered.
    As a reminder, please keep your microphone muted unless 
speaking. Should I hear inadvertent background noise, I will 
request the Member please mute their microphone.
    To insert a document into the record, please email it to 
[email protected].
    In July, we held the first part of this hearing examining 
oversight of the Government's response to the COVID-19 pandemic 
within the purview of this committee.
    Today, we will hear about the impact that the Government's 
COVID-19 relief funding and response have had on the 
transportation sector and its workers, on the ability of States 
and localities to support their communities with COVID-19 
testing and vaccination, and on our Nation's economy.
    We will also hear from our witnesses about how these 
efforts can be improved to be even more effective in the 
future.
    The pandemic has had devastating health consequences for 
our Nation and the world. More than 42 million Americans have 
been infected; 675,000 have died, and the Federal Government 
was called upon to maintain a national-scale response to this 
crisis for an unprecedented period of time.
    The Federal Emergency Management Agency has led the way in 
protecting the health and well-being of our communities. They 
have helped States and local governments establish community 
vaccination centers, provided relief for COVID testing, 
delivered tens of millions of N95 masks, surgical gowns, and 
other personal protective equipment.
    States and local governments are now receiving 
reimbursement from FEMA, Federal Emergency Management Agency, 
for 100 percent of their costs for the safe opening and 
operation of schools, hospitals, shelters, and transit systems.
    In addition, to prevent the further spread of the virus and 
protect the health of transportation workers and passengers, 
President Biden has ordered masks to be worn on transportation 
modes, including buses, airplanes, ferries, and other forms of 
transportation.
    It not only hit the health of our citizens; it obviously 
directly impacted our economy. Commercial airline demand fell 
to virtually nothing, affecting revenues for airlines, 
airports, and associated businesses.
    Today, passenger levels are still 25 percent lower than 
before the pandemic and not looking too good in the near term. 
Transit ridership on buses, subways, and commuter vanpools 
across the country has been decimated. Here in DC, ridership on 
Metrorail decreased 90 percent.
    These declines led to devastating economic consequences for 
local, regional and State governments, transit agencies, 
airlines, and airports, among many others.
    Companies operating shuttle buses and private bus charters 
were not spared. Some were forced to suspend service due to 
lack of passengers. Some went out of business altogether. It 
will take our transportation networks a very long time to 
recover financially, and they may be forever altered by 
changing workplace practices.
    Congress took unprecedented actions to help cushion the 
economic blow to these transportation sectors. The programs 
Congress created and the funding it authorized helped transit 
and bus operators, airlines, airports, and other companies 
provide paychecks to their employees and essential 
transportation services to communities across the country.
    Federal relief funds administered by the Federal Transit 
Administration allowed transit agencies to keep critical 
service running, avoid layoffs, and provide workers and bus 
riders with COVID-19 protections.
    In aviation, the Payroll Support Program provided financial 
assistance to airlines--actually, to their employees, 
administered by the airlines--manufacturers, and other related 
businesses for wages, salaries, and benefits.
    Airports, which also suffered revenue losses, received 
additional grant assistance from the Federal Aviation 
Administration for costs such as salaries and debt service.
    Congress also created the Coronavirus Economic Relief for 
Transportation Services, or CERTS Program, so that motorcoach, 
schoolbus, and passenger vessel companies affected by the 
pandemic can maintain their payroll and hire back employees who 
were laid off.
    These and other pandemic relief programs have helped 
thousands upon thousands of workers and their families.
    According to the Bureau of Labor Statistics, so far this 
year, job growth has averaged nearly 600,000 new jobs each 
month, although not last month.
    The economy has also been growing, due in part to a boost 
from pandemic relief spending with gross domestic product 
expected to show a substantial increase this year.
    Governors, mayors, local officials, labor, and business 
have all applauded the support Congress provided through 
legislation that stopped the hemorrhaging of the economy and 
helped to fight the COVID epidemic.
    Today we will hear from witnesses about how the Federal 
Government's pandemic assistance has helped transportation 
workers, emergency managers, and the Nation's economy.
    We will also hear their views on how the Federal Government 
can do a better job as it continues to help our country recover 
from the impacts of the COVID-19 pandemic and how it can be 
better prepared to respond to future disasters.
    I thank all our witnesses for being here today. I look 
forward to your testimony.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
      Congress from the State of Oregon, and Chair, Committee on 
                   Transportation and Infrastructure
    In July, we held the first part of this hearing examining oversight 
of the government's response to the COVID-19 pandemic. Today we will 
hear about the impact that the government's COVID-19 relief funding and 
response efforts have had on the transportation sector and its workers, 
on the ability of states and localities to support their communities 
with COVID-19 testing and vaccination, and on our nation's economy. We 
will also hear from our witnesses about how these efforts can be 
improved to be even more effective going forward.
    The COVID-19 pandemic has had devastating public health 
consequences for our nation and the world. In the United States, it has 
infected more than 42 million Americans and resulted in over 675,000 
deaths. The federal government was called upon to maintain a national-
scale response to this crisis for an unprecedented period of time.
    The Federal Emergency Management Agency (FEMA) has led the way in 
protecting the health and well-being of our communities. They have 
helped states and local governments establish community vaccination 
centers, provided funding for COVID-19 testing, and delivered tens of 
millions of N-95 masks, surgical gowns, and other personal protective 
equipment. States and local governments are now receiving reimbursement 
from FEMA for 100 percent of their costs for the safe opening and 
operation of schools, hospitals, shelters, and transit systems. In 
addition, to prevent the further spread of the virus and protect the 
health of transportation workers and passengers, President Biden 
ordered masks to be worn on transportation modes, including buses, 
airplanes, ferries, and other forms of transportation.
    The pandemic wreaked havoc not only on the health of our citizens, 
but also on the health of our economy, and transportation was one of 
the hardest-hit sectors. Commercial airline demand fell drastically, 
affecting revenues for airlines, airports, and associated businesses. 
Today, passenger levels in the U.S. are still about 25 percent lower 
than before the pandemic.
    Transit ridership on buses, subways, and commuter vanpools across 
the country has been decimated. Here in Washington, D.C., ridership on 
metro rail decreased nearly 90 percent in the spring of 2020. These 
declines led to devastating economic consequences for local, regional, 
and state governments, transit agencies, airlines, and airports, among 
many others.
    Companies operating commuter shuttle buses and private bus charters 
were not spared. Some were forced to suspend service due to lack of 
passengers, and some went out of business entirely. Our transportation 
networks will take a long time to recover financially, and they may be 
forever altered by changing workplace practices.
    Congress took unprecedented actions to help cushion the economic 
blow to these transportation sectors. The programs Congress created and 
the funding it authorized helped transit and bus operators, airlines, 
airports, and other companies provide paychecks to their employees and 
essential transportation services to communities across the country. 
Federal relief funds administered by the Federal Transit Administration 
allowed transit agencies to keep critical service running, avoid 
layoffs, and provide workers and riders with COVID-19 protections.
    In the aviation sector, the Payroll Support Program provided 
financial assistance to airlines, manufacturers, and other related 
businesses for employee wages, salaries, and benefits. Airports, which 
also suffered revenue losses, received additional grant assistance from 
the Federal Aviation Administration for costs such as salaries and debt 
service.
    Congress also created the Coronavirus Economic Relief for 
Transportation Services, or ``CERTS,'' program so that motorcoach, 
school bus, and passenger vessel companies affected by the pandemic can 
maintain their payroll and hire back employees who were laid off.
    These and other pandemic relief programs have helped thousands upon 
thousands of workers and their families. According to the Bureau of 
Labor Statistics, so far this year, job growth has averaged nearly 
600,000 new jobs added each month. The economy has also been growing, 
due in part to the boost from pandemic relief spending, with gross 
domestic product expected to show a substantial increase this year. 
Governors, mayors and local officials, labor organizations, and 
business associations have all applauded the support Congress provided 
through legislation that thwarted the loss of American jobs, bolstered 
the economic security of U.S. small businesses, and helped to slow the 
spread of the COVID-19 virus.
    Today we will hear from our witnesses about how the federal 
government's pandemic assistance has helped transportation workers, 
emergency managers, and the nation's economy. But I also hope to hear 
their views on how the federal government can do a better job as it 
continues to help our country recover from the impacts of the COVID-19 
pandemic and how it can be better prepared to respond to future 
disasters of this nature.
    Thank you to all of our witnesses for being here today. I look 
forward to your testimony. With that, I yield to Ranking Member Graves 
for his opening statement.

    Mr. DeFazio. With that, I yield to the ranking member, Mr. 
Crawford.
    Mr. Crawford. I thank the chair and I just want to add a 
few comments. The Federal Government has spent at least $5.9 
trillion to combat and respond to COVID-19. Much of this year's 
$1.9 trillion relief package, masqueraded as pandemic-related 
relief, was really just throwing money at various Pelosi 
priorities.
    House committees also just marked up another $3.5 trillion 
for the majority's reconciliation bill, which, if it is jammed 
through Congress, will cost American taxpayers about $50,000 
per household.
    Despite throwing around all this money, we still haven't 
done our basic duty of funding the Government, which is 
hurtling toward a shutdown.
    This unchecked spending is directly contributing to rising 
inflation, and Americans are feeling this hidden tax every day. 
We cannot continue with inflationary increases in prices every 
month as we have so far during the Biden Presidency.
    Gasoline is up 42 percent. Bacon is up 17 percent. Beef is 
up more than 12 percent. Eggs are up 10 percent. And the list 
goes on.
    What is worse is, despite the high cost of fighting this 
virus, we still have done nothing to hold China accountable for 
it.
    I look forward to hearing from our witnesses and thank them 
for their patience and returning today. And with that, I yield 
back the balance of my time.
    [Mr. Crawford's prepared statement follows:]

                                 
Prepared Statement of Hon. Eric A. ``Rick'' Crawford, a Representative 
                 in Congress from the State of Arkansas
    Thank you, Chair DeFazio.
    The federal government has spent at least $5.9 trillion to combat 
and respond to COVID-19.
    Much of this year's $1.9 trillion relief package masqueraded as 
pandemic-related relief was really just throwing money at various 
Pelosi priorities.
    House committees also just marked up another $3.5 trillion for the 
Majority's reconciliation bill, which, if it is jammed through 
Congress, will cost American taxpayers about $50,000 per household.
    Despite throwing around all this money, we still haven't even done 
our basic duty of funding the government, which is hurtling towards a 
shutdown.
    This unchecked spending is directly contributing to rising 
inflation and Americans are feeling this hidden tax every day.
    We cannot continue with inflationary increases in prices every 
month as we have so far during the Biden Presidency. Gasoline is up 42 
percent. Bacon is up 17 percent. Beef is up more than 12 percent. Eggs 
are up 10 percent, and the list goes on.
    What's worse is despite the high cost of fighting this virus, we 
still have done nothing to hold China accountable for it.
    I look forward to hearing from our witnesses and thank them for 
their patience and returning today.
    I yield back the balance of my time.

    Mr. DeFazio. I thank the gentleman for his brevity, and now 
we will turn to our witnesses. We will have five witnesses: Mr. 
Paul Skoutelas, president and CEO, American Public 
Transportation Association, APTA; Mr. Juan Ortiz, director of 
the Office of Emergency Management and Homeland Security, city 
of Austin, on behalf of the International Association of 
Emergency Managers; Dr. Michael J. Boskin, T.M. Friedman 
Professor of Economics and senior fellow at the Hoover 
Institution, Stanford University; Dr. Wendy Edelberg, director 
of The Hamilton Project, the Brookings Institution; and Mr. 
Greg Regan, the president of the Transportation Trades 
Department, AFL-CIO. Thank you for joining us here today, and I 
look forward to your testimony.
    Without objection, your full witness statement will be 
included in the record, and with that, I would recognize Mr. 
Skoutelas for 5 minutes.

 TESTIMONY OF PAUL P. SKOUTELAS, PRESIDENT AND CHIEF EXECUTIVE 
   OFFICER, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION; JUAN 
  MANUEL ORTIZ, DIRECTOR, OFFICE OF EMERGENCY MANAGEMENT AND 
  HOMELAND SECURITY, CITY OF AUSTIN, TEXAS, ON BEHALF OF THE 
  INTERNATIONAL ASSOCIATION OF EMERGENCY MANAGERS; MICHAEL J. 
  BOSKIN, Ph.D., TULLY M. FRIEDMAN PROFESSOR OF ECONOMICS AND 
  WOHLFORD FAMILY SENIOR FELLOW, HOOVER INSTITUTION, STANFORD 
   UNIVERSITY, ON BEHALF OF HIMSELF; WENDY EDELBERG, Ph.D., 
 DIRECTOR, THE HAMILTON PROJECT, THE BROOKINGS INSTITUTION, ON 
      BEHALF OF HERSELF; AND GREGORY R. REGAN, PRESIDENT, 
           TRANSPORTATION TRADES DEPARTMENT, AFL-CIO

    Mr. Skoutelas. Good morning, Chairman DeFazio, Ranking 
Member Graves, and members of the committee. Thank you for this 
opportunity to testify today on the Federal Government's COVID-
19 relief and its impacts on public transportation.
    My name is Paul Skoutelas. I am the president and CEO of 
APTA, the American Public Transportation Association. We are 
the only association in North America that represents all modes 
of public transit. We are the voice of public transportation 
for both public- and private-sector members of our industry.
    Public transportation has always been an essential service 
for American families. It provides essential mobility options, 
supports economic growth, improves the environment, makes our 
roads safer for drivers and pedestrians, and has served 
critical roles during natural disasters and other emergencies.
    When the COVID-19 pandemic disrupted the lives of every 
American, transit, once again, served as an essential lifeline. 
Public transit systems brought healthcare professionals to the 
front lines, delivering groceries and medicine to at-risk 
populations, and connecting essential workers to their places 
of work.
    Some agencies even provided exceptional services, such as 
delivering COVID-19 tests, or retrofitting buses into Wi-Fi 
hotspots to help students who would otherwise have difficulty 
accessing remote learning.
    As States and cities implemented stay-at-home orders and 
encouraged social distancing, ridership for many agencies fell 
to as low as 20 percent of pre-pandemic ridership levels and 
many below that.
    Through it all, healthcare and other essential workers 
continued to rely on transit to get to their critical jobs. 
Most significantly, transit workers served as heroes on the 
front lines.
    The public transit industry directly employs some 450,000 
workers today, and I would be remiss if I did not mention the 
significant toll that COVID-19 has had on transit agencies' 
frontline employees. Five hundred forty-five transit workers 
have been lost to COVID.
    At the same time, the pandemic has devastated transit 
agency budgets, and we are deeply grateful that Congress 
recognized transit's essential role by passing emergency 
legislation to provide significant support for transit 
operating costs.
    According to a recent APTA survey, nearly one-half of 
transit agencies stated that the COVID-19 emergency funding 
helped them avoid a complete shutdown of public transit 
service.
    In addition, more than 75 percent of agencies said that 
COVID funding helped them avoid layoffs and furloughs. And the 
agencies today are putting these emergency funds to work.
    According to the Federal Transit Administration, public 
transit agencies have obligated 98 percent of CARES Act funds. 
More than half of the CRRSAA funds have been obligated, and 
more than one-quarter of American Rescue Plan funds.
    There should be no doubt that COVID relief funding is being 
well spent and has been absolutely critical to the survival of 
transit service during this public health emergency.
    Public transit agencies are also helping to combat the 
pandemic directly. Last spring, APTA created a health and 
safety commitments program for public transportation agencies 
to implement in their own communities.
    The goal was simple--control the spread of COVID-19, keep 
the riding public and our own workers healthy and safe, and win 
back public trust.
    The program consists of four commitments to specific 
practices and policies for both transit agencies and transit 
users. They include following public health guidelines from 
official sources, protecting each other by taking appropriate 
precautions, keeping passengers informed and empowered to 
choose the safest times and routes to ride, and putting health 
first by requiring riders and employees to avoid public transit 
if they have been exposed to COVID-19 and feel ill.
    More than 200 transit agencies participated in the program, 
helping to protect millions of people every day, which is 
leading to increased public confidence.
    At the same time, public transit agencies have made it a 
priority to do everything they can to help Americans get 
vaccinated.
    Transit agencies have done everything from ensuring that 
their transit employees had access to vaccines to helping the 
public get to vaccines by establishing clinics onsite or 
providing free rides to vaccine facilities.
    The Federal emergency funding makes all of that possible.
    Just as transit agencies have served Americans during this 
ongoing public health emergency, transit is well-poised to be a 
key driver of building a 21st-century transportation system 
that will address the challenges of our time: economic 
recovery, equity, climate change, and global competitiveness.
    As the Nation emerges from the pandemic, transit ridership 
continues to climb each month. About 6 months ago, the 
ridership levels compared to pre-pandemic were about 41 
percent; 3 months ago, national transit ridership was at 50 
percent of pre-pandemic levels; and today, transit ridership is 
almost two-thirds, about 63 percent of 2019 levels.
    We expect increasing transit ridership to continue as 
Americans return to offices and become more comfortable 
resuming normal activities in their communities.
    As we look to the future, we urge Congress to provide the 
necessary funding to address the $105 billion state-of-good-
repair backlog that exists which is needed to modernize our 
systems and meet the growing and evolving demands of our 
communities, large and small, all over the country.
    APTA strongly supports the Infrastructure Investment and 
Jobs Act, which makes critical investments in surface 
transportation, including $107 billion for public transit----
    Mr. DeFazio. Thank you, Mr. Skoutelas. If you could 
summarize very briefly.
    Mr. Skoutelas. Sure. Let me conclude with just three facts 
that we always need to keep in mind with regard to transit 
investment. Every dollar invested in public transportation 
[inaudible] in economic returns; 50,000 jobs are created for 
every $1 billion of investment.
    Thank you, Mr. Chairman, and I look forward to answering 
any questions that the committee may have.
    [Mr. Skoutelas' prepared statement follows:]

                                 
Prepared Statement of Paul P. Skoutelas, President and Chief Executive 
          Officer, American Public Transportation Association
                              Introduction
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee on Transportation and Infrastructure, on behalf of the 
American Public Transportation Association (APTA) and its public- and 
private-sector member organizations that directly employ 450,000 
transit workers and support several million private-sector jobs, thank 
you for the opportunity to testify on ``Assessing the Federal 
Government's COVID-19 Relief and Response Efforts and its Impact--Part 
II''.
    My name is Paul Skoutelas, and I am the President and Chief 
Executive Officer of APTA, an international association representing 
all modes of public transportation--bus, paratransit, light rail, 
commuter rail, subways, waterborne services, and high-performance 
intercity passenger rail.\1\ I am pleased to have the opportunity to 
discuss how public transit agencies have used federal COVID-19 
emergency funding during the ongoing pandemic.
---------------------------------------------------------------------------
    \1\ APTA members include public transportation systems; planning, 
design, construction, and finance firms; product and service providers; 
academic institutions; state transit associations; and state 
departments of transportation.
---------------------------------------------------------------------------
              Transit's Essential Role During the Pandemic
    Transit has always been an essential service, providing mobility 
options for Americans, supporting economic growth, improving the 
environment, making our roads safer for drivers and pedestrians, and 
serving critical roles during natural disasters and other emergencies. 
When the COVID-19 pandemic disrupted the lives of every American, 
transit served as an essential lifeline. Public transportation systems 
brought healthcare professionals to the frontlines, delivered groceries 
and medicine to at-risk populations, and connected essential workers to 
their places of work. Some agencies even provided exceptional services 
such as delivering COVID-19 tests or retrofitting buses into Wi-Fi 
hotspots to help students who would otherwise have difficulty accessing 
remote learning.
    Given official declarations to close businesses and impose stay-at-
home orders, as well as other measures such as a dramatic increase in 
remote work, public transit agencies across the nation faced severe 
ridership declines and state and local revenue losses. Public 
transportation continued to serve our communities despite significantly 
increased operating costs and dramatically reduced sources of funding, 
including fares and other revenues. In most places, fare collection was 
suspended for safety reasons. State and local transit funding was 
diverted to address other COVID-related needs. Most significantly, 
transit workers served as heroes on the front lines. The public transit 
industry directly employs 450,000 workers, and I would be remiss if I 
did not mention the significant toll that the COVID-19 pandemic has had 
on transit agencies' frontline employees--545 transit workers have been 
lost to COVID.
    We thank Congress for recognizing transit's essential role by 
passing emergency legislation to provide significant support for 
transit operating costs that was essential for the very survival of 
many agencies. The Coronavirus Aid, Relief, and Economic Security Act 
(CARES Act), the Coronavirus Response and Relief Supplemental 
Appropriations Act (CRRSAA), and the American Rescue Plan Act (ARP) 
each provided critical support for public transportation. COVID relief 
funds helped stabilize agency budgets, which allowed them to continue 
their capital and construction programs, maintain jobs, and help the 
economy recover.
    According to a recent APTA survey, almost one-half of public 
transit agencies (44 percent) stated that COVID-19 emergency funding 
helped them avoid a complete shutdown of service. In addition, the 
overwhelming majority of agencies said that COVID-19 funding helped 
them avoid layoffs (77 percent) and furloughs (79 percent).\2\
---------------------------------------------------------------------------
    \2\ APTA Policy Brief, Covid Relief Funding Critical to Transit 
Survival (APTA Policy Brief) (July 2021), at 2. This survey was 
conducted of APTA transit agency members in July 2021. One hundred 
thirty-six (136) members responded to the survey, with those agencies 
carrying more than three-quarters of U.S. transit ridership.
---------------------------------------------------------------------------
    In addition, COVID-19 relief funding has enabled public transit 
agencies to ramp up service as people start traveling more and return 
to offices. Today, two-thirds of public transit agencies (65 percent) 
are operating at 75 percent or more of their pre-pandemic service 
levels.\3\
---------------------------------------------------------------------------
    \3\ Id. at 1.
---------------------------------------------------------------------------
    Emergency federal funding was vital to keeping public 
transportation systems operating, but this does not mean those dollars 
were used to simply maintain pre-pandemic functions. Transit agencies 
pivoted to address urgent needs during the pandemic, such as:
      Redesigning routes and revising schedules to better serve 
riders who most heavily rely on transit;
      Keeping transit workers on the job, often deploying 
employees in different jobs that had become priorities due to COVID-19;
      Reallocating resources to ensure essential workers--such 
as front-line responders, health care employees, pharmacists, hospital 
staff, grocery store clerks, and community service providers--could 
reach their places of employment;
      Delivering meals and critical supplies to those without 
resources and carrying individuals with chronic health issues to life-
saving treatments; and
      Ensuring that vaccines were available to transit 
employees as soon as they were eligible, and providing free, convenient 
travel to vaccination sites for the general public.

    Transit agencies are investing these emergency funds in services 
that are absolutely vital in their communities. To date, public transit 
agencies have obligated 98 percent of CARES Act funding. Transit 
agencies have also obligated more than one-half of CRRSAA funds and 
one-quarter of ARP funds. According to APTA's survey, one-half of 
responding agencies (51 percent) expect to exhaust all of their COVID-
19 relief funds by January 2023 and the vast majority of agencies (82 
percent) expect to expend all of their funds within the following 
year.\4\
---------------------------------------------------------------------------
    \4\ Id at. 3.
    
    
 * Please note that the percentages obligated represent the percentage 
 of formula funds allocated under the COVID-19 emergency funding acts.

    There should be no doubt that COVID-19 emergency funding was 
critical to the survival of transit service during the pandemic. 
Agencies that responded to our survey had this to say about the impact 
of COVID emergency funding:
      ``COVID relief funding has prevented the outright 
cancelation of our commuter bus program. It has also been a valuable 
tool to pay front-line staff to self-isolate/quarantine when they 
showed symptoms of COVID. As a result, we have had no outbreaks amongst 
staff that have been tied to work.''
      ``The biggest benefit we saw was the preservation/
continuation of employment and pay for our employees and contract 
teams, and the provision of essential service to our community 
(especially essential workers).''
      ``COVID-related funding has been a major factor in being 
able to pay for PPE, purchase of ion electric cleaners, driver 
compartment plexiglass barriers, adding bus/facility cleaners for 
heightened cleaning to keep our employees and the public as safe as 
possible.''

    Finally, one agency summed it up as follows: ``Receiving the CARES, 
CRRSAA, and ARP monies literally saved our region's public 
transportation system.''
    APTA members have also done their part in ensuring that their 
systems were ready to welcome passengers back, as detailed below.
                APTA Safety & Health Commitments Program
    At the outset of the pandemic, APTA members established a Mobility 
Recovery & Restoration Task Force, which developed a Health & Safety 
Commitments Program for public transportation agencies to implement in 
their own communities. The goal was simple: control the spread of 
COVID-19, keep the riding public and our own workers healthy and safe, 
and win back public trust. The APTA program consists of four 
commitments to specific practices and policies for both transit 
agencies and transit users to follow:



    More than 200 public transit agencies participate in this program, 
helping to protect millions of people every day.
    Keeping buses on streets and trains on rails--where and when they 
were needed most--was our mission, but we also needed to make sure 
these operations were safe for passengers and transit employees.
    As a result of our agencies' concerted efforts, ridership continues 
to climb, albeit slowly. According to the Federal Transit 
Administration (FTA), some smaller transit systems are reporting 
ridership nearing 80 percent or more of pre-pandemic levels.\5\ This is 
a positive development to see riders return as public transit is 
essential for economic recovery and the nation's well-being.
---------------------------------------------------------------------------
    \5\ See FTA Press Release, Americans Riding Public Transportation 
in Greater Numbers [https://www.transit.dot.gov/about/news/americans-
riding-public-transportation-greater-numbers] (July 21, 2021).
---------------------------------------------------------------------------
              Transit Agencies Helping Vaccinate Americans
    Public transportation agencies and organizations are helping people 
get to COVID-19 vaccination sites by providing free rides, and in some 
cases, transit facilities have become vaccination clinics. These 
efforts have been made possible because of federal emergency funding 
provided to the public transit industry. There are countless examples 
of transit agencies going above and beyond the call of duty to help in 
the vaccination effort, and I will describe a few here.
    The Tri-State Transit Authority (TTA) (Huntington, WV) has 
partnered with the Cabell-Huntington Health Department to provide free 
rides to and from any vaccine clinic in Cabell County, available on any 
TTA bus or dial-a-ride service.
    The Jacksonville Transportation Authority (JTA) (Jacksonville, FL) 
partnered with a non-profit health center to provide ``Wellness on 
Wheels'', a mobile vaccination service to bring the COVID-19 vaccine 
directly to seniors and at-risk citizens throughout Jacksonville, 
specifically targeting areas where there are gaps in health equity.
    In May, the North Carolina Department of Transportation (NCDOT) 
reported that its state's transit systems had taken more than 8,500 
residents to vaccine appointments. It credited federal COVID-19 
emergency funds for enabling 82 North Carolina transit agencies to 
provide rides to vaccine sites.\6\
---------------------------------------------------------------------------
    \6\ According to NCDOT, ``Since January, NCDOT and NCDHHS have been 
administering $2.5 million in Coronavirus Relief Funding to local 
transit agencies in every county. The funds are being used to offset 
the operating costs associated with transit rides to and from 
vaccination sites for people who are receiving or assisting someone in 
receiving the COVID-19 vaccine. To date, 82 transit agencies have 
reported using the federal funds to take people to and from vaccine 
sites in North Carolina. Those agencies have traveled more than 100,000 
miles to take people to vaccine appointments.'' https://www.ncdot.gov/
news/press-releases/Pages/2021/05-11-2021-transit-agencies-8500-
vaccine-sites.aspx
---------------------------------------------------------------------------
    The Santa Clara Valley Transportation Authority (VTA) (San Jose, 
CA) offered free rides on its buses and light rail to Levi's Stadium in 
Santa Clara, which hosted a mass vaccination site. VTA also increased 
the frequency of seven bus routes to help relieve the impact of 
passenger pass-ups due to limited capacity necessitated by the 
requirements to social distance.
    Again, there are countless other examples of transit agencies 
supporting their communities in this way, and the work is ongoing 
across the country.
           Transit's Essential Role in Rebuilding our Economy
    As the nation emerges from the ongoing COVID-19 public health 
emergency, transit is poised to be a key driver of building a 21st 
century transportation system that will support economic recovery, 
address equity and climate change, and increase our global 
competitiveness. Transit ridership continues to climb each month. Three 
months ago, national transit ridership was at 50 percent of pre-
pandemic levels. Today, transit ridership is almost two-thirds (63 
percent) of 2019 levels. Increasing transit ridership is expected to 
continue as Americans return to offices and become more comfortable 
resuming normal activities.
    I again express our deep gratitude for the federal COVID-19 
emergency funding that supported operations during a time that posed an 
existential threat to public transit. While the COVID-19 emergency 
support was designed to support the operating budgets of transit 
agencies,\7\ we look forward to continuing to work with Congress to 
invest in transit capital programs. APTA strongly supports the 
Infrastructure Investment and Jobs Act (IIJA), which makes critical 
investments to surface transportation infrastructure, including $107 
billion for public transportation and $102 billion for commuter rail, 
Amtrak, and other high-performance rail. APTA also strongly supports 
this Committee's title of the Build Back Better Act, which creates a 
new, innovative program to provide $10 billion for competitive grants 
for public transit access to affordable housing and to enhance mobility 
for low-income riders and residents of disadvantaged communities.
---------------------------------------------------------------------------
    \7\ According to APTA's July 2021 survey, 90 percent of transit 
agencies have used their COVID emergency funding exclusively or mostly 
for operations.
---------------------------------------------------------------------------
    Taken together, these critical investments in public transportation 
prioritize equity, health, job creation, and climate action. Investing 
in public transit will significantly reduce greenhouse gas emissions, 
improve air quality and public health, and help transform our nation's 
transportation network for a sustainable future. Together, the bills 
reflect key pillars of APTA's Surface Transportation Authorization 
Recommendations,\8\ addressing the $105 billion state-of-good-repair 
backlog and providing the necessary investment to meet the growing and 
evolving demands of our communities.
---------------------------------------------------------------------------
    \8\ In October 2019, the APTA Board of Directors adopted APTA's 
Recommendations on Surface Transportation Law [https://www.apta.com/
advocacy-legislation-policy/federal-legislative-issues/authorization/]. 
The Recommendations detail a funding proposal and programmatic reforms 
that will create or sustain more than two million jobs.
---------------------------------------------------------------------------
    We believe that passing both the IIJA and the Build Back Better Act 
will provide the transformational investment in infrastructure that the 
country so desperately needs to recover from the COVID-19 pandemic and 
thrive in the future.
                               Conclusion
    On behalf of APTA, thank you for giving me the opportunity to 
testify about the tremendous work that transit agencies have been doing 
throughout this pandemic. Public transit will continue to be essential 
for our economic recovery. We stand ready to work with you on these 
important infrastructure initiatives and other issues related to public 
transportation.

    Mr. DeFazio. OK. I thank the gentleman.
    Mr. Ortiz, you are recognized for 5 minutes.
    Mr. Ortiz. Chair DeFazio, Ranking Member Graves, and 
members of the committee, thank you for the opportunity to 
testify at today's hearing. My name is Juan Manuel Ortiz. I 
serve as the director of the city of Austin's Homeland Security 
and Emergency Management Department. I am testifying today on 
behalf of the International Association of Emergency Managers, 
as well as the city of Austin.
    The city of Austin's Office of Homeland Security and 
Emergency Management is responsible for preparedness, response, 
recovery, and mitigation for emergencies and disasters, among 
many other services.
    In the past 18 months, we have responded to a category 4 
hurricane, a devastating pandemic, a major winter storm that 
crippled our State's power grid, and many other emergencies.
    My testimony today will provide examples of constructive 
comments with the goal of strengthening Federal, State, and 
local emergency management, and improving our ability to meet 
our core mission in protecting our community in emergency 
situations.
    Today, I will cover inconsistencies in the application of 
Federal rules and law, the necessity for adequate funding for 
grant operations, and if time permits, supply chain management.
    During the COVID-19 pandemic, providing temporary 
protective shelters for Austin's most vulnerable and at-risk 
residents proved to be one of our most difficult and most 
expensive challenges.
    In the wake of an outbreak at Austin's primary congregate 
shelter facility, the city took quick action and leased six 
hotels to provide noncongregate, protective shelter and 
isolation facilities for people at high risk of severe disease 
from COVID-19, including people experiencing homelessness.
    The city implemented these shelter spaces on the 
established rules and guidance from the CDC and FEMA, and staff 
worked closely with FEMA region 6 to establish the 
noncongregate shelter program in accordance with their policies 
and guidelines.
    Regrettably, it became very clear months into the process 
that although the rules and guidance published by the agencies 
allowed the local expenditures to protect our most vulnerable 
population, our reimbursement from FEMA for the program was at 
risk because of the inconsistent enforcement of rules from 
regional FEMA offices throughout the Nation.
    After pursuing the program for over a year, we have 
received strong indications from FEMA region 6 that our 
reimbursement request for our pandemic noncongregate shelter 
program may be denied.
    An adverse FEMA decision on noncongregate shelter 
reimbursement poses serious risk to public health and our 
budget.
    The city of Austin has spent $40 million in noncongregate 
shelters, and as you can imagine, our frustration has grown 
with the thought of no reimbursement as we have learned that 
expenditures identical to ours are being reimbursed in other 
FEMA regions. This showcases the inconsistencies in the 
application of laws across the country.
    It is critical that FEMA approve pandemic-related, 
noncongregate shelter project applications and other requests 
uniformly across all 10 FEMA regions. Consistency in the 
application of policy from FEMA on these decisions is critical 
to improving efforts to protect our residents.
    I recognize that I am addressing the authorizing committee 
and that annual funding decisions are the responsibility of the 
Appropriations Committee, but I must include a discussion about 
our funding, specifically regarding the Emergency Management 
Performance Grant, EMPG, the Urban Area Security Initiative, 
UASI.
    To improve the Federal, State, and local partnership and 
our ability to meet our joint emergency missions, it is 
essential that Congress increase funding for these core 
programs. EMPG and UASI are the foundation of the local 
emergency management efforts.
    Regrettably, the sequester and the budget austerity that 
followed the 2011 budget agreement did not spare these core 
programs, and funding has not kept pace with population growth, 
inflation, and, most importantly, need. Essentially, local 
governments are being asked to do more with much less.
    I know that you are all too familiar with what it means for 
a community to be at the margins of inclusion in UASI. However, 
Austin has not participated in UASI since Congress reduced 
funding for the program in fiscal year 2011.
    Austin should be a UASI participant just as we were one 
decade ago. For metropolitan areas such as ours, the best 
answer lies not in tweaking the UASI threat risk assessment, 
but in Congress increasing funding for the program to ensure 
that many more Americans benefit from UASI.
    Local emergency management programs are historically 
understaffed, most consisting of just one person, and are 
struggling to keep up with the new demand placed upon them with 
the pandemic.
    EMPG funding flows to the local communities through the 
State as a subaward. However, there are no requirements for a 
State to allocate funds to local communities, and as a result, 
access to EMPG funding varies from State to State.
    Even in my State, which is one of the only to have a 
process to support local programs, we have seen consistent 
reductions ranging from 30 to 60 percent in funding over the 
past 10 years.
    As you all know, the benefits of UASI and EMPG are 
considerable. Communities that are fortunate to participate in 
the program are not just better prepared, equipped, and 
trained, but also able to benefit from the regional 
collaboration and cooperation that the UASI----
    Mr. DeFazio. If you could summarize, please, sir.
    Mr. Ortiz. In conclusion, that concludes my testimony, and 
as I mentioned previously, I am grateful for the opportunity to 
discuss these issues with you today. My written testimony 
provides much more detail on these issues as well as others. I 
am happy to answer any questions you may have for me today. 
Thank you.
    [Mr. Ortiz's prepared statement follows:]

                                 
Prepared Statement of Juan Manuel Ortiz, Director, Office of Emergency 
 Management and Homeland Security, City of Austin, Texas, on behalf of 
          the International Association of Emergency Managers
                              Introduction
    Chair DeFazio, Ranking Member Graves, and members of the Committee, 
thank you for the opportunity to testify at today's hearing. My name is 
Juan Manuel Ortiz. I serve as the Director for the City of Austin's 
Office of Homeland Security and Emergency Management [https://
www.austintexas.gov/department/homeland-security-and-emergency-
management].
    I am testifying today on behalf of the International Association of 
Emergency Managers (IAEM) [https://www.iaem.org/]. IAEM is the premier 
professional organization for emergency management, with more than 
6,000 members worldwide. The mission of IAEM is to advance our 
profession by promoting the principles of emergency management; and, to 
serve our members by providing information, networking, and development 
opportunities. We are a non-profit educational organization dedicated 
to promoting the ``Principles of Emergency Management'' and 
representing those professionals whose goals are saving lives and 
protecting property and the environment during emergencies and 
disasters. IAEM was founded in 1952 as the U.S. Civil Defense Council, 
becoming the National Coordinating Council of Emergency Managers 
(NCCEM) in 1985, and the International Association of Emergency 
Managers in 1997. Today, IAEM continues to drive the development of the 
profession of emergency management through its promotion of the 
Principles of Emergency Management [https://www.iaem.org/About/
Principles-of-EM], Certified Emergency Manager (CEM) Program [https://
www.iaem.org/certification/intro] and IAEM Scholarship Program [https:/
/www.iaem.org/Resources/Scholarships]. The Student Council [https://
www.iaem.org/council/student/home] now has chapters at universities 
around the world and works to engage with future professionals as they 
choose their career paths.
    The City of Austin [https://www.austintexas.gov/] is a home rule 
local government covering 271 square miles and serving nearly 1 million 
residents and more than 30 million annual visitors each year. Austin is 
the heart of one of our nation's fastest growing (32.4% population 
growth over the past decade) and most dynamic metropolitan areas, which 
is home to 2.2 million people. In addition to state government, the 
University of Texas, and major regional health care institutions, we 
are the proud home of the Army Futures Command [https://www.army.mil/
futures/?from=org] and of numerous national and regional corporate 
headquarters, including such well-known names as Apple, Dell, eBay, 
IBM, Oracle, NXP Semiconductors, VRBO, Whole Foods, and Yeti. Austin 
annually hosts numerous events that draw tens of millions of visitors, 
including major internationally known events such as South by Southwest 
[https://www.sxsw.com/], the Formula 1 Aramco United States Grand Prix 
[http://circuitoftheamericas.com/f1/tickets], and Austin City Limits 
[https://www.aclfestival.com/], in addition to countless other events 
that draw large crowds and visitors from around the nation and the 
world.
    The City of Austin Homeland Security and Emergency Management 
Office is one of several public agencies charged with keeping our city 
and metropolitan area safe. The 14 employees of our Office plan and 
prepare for emergencies, educate the public about preparedness, develop 
volunteers, manage grant funding to improve homeland security and 
public safety capabilities, coordinate emergency response and recovery, 
support planned events, and work with public and partner organizations 
to protect our whole community when it needs us the most. We were the 
first local emergency management agency in Texas to earn full 
accreditation under the Emergency Management Accreditation Program, 
placing us among the nation's leading emergency management agencies. 
That distinction is the result of our broad-based work and our 
innovative programs, such as Disaster Ready Austin [https://
www.austintexas.gov/department/homeland-security-and-emergency-
management/disaster-ready-austin], a collaborative initiative to 
educate and empower residents to be prepared for emergencies and 
disaster that provides households, businesses, and schools with 
emergency planning and preparedness tools, and a recognition of our 
comprehensive emergency management program.
    We are a comprehensive emergency management operation. In addition 
to planning and preparing for events that draw tens of millions of 
visitors and large crowds, our work addresses all aspects of emergency 
management. Indeed, although large events constitute a sizable portion 
of our workload, the top five hazards that Austin and Central Texas 
residents face and that keep our staff perpetually busy are floods 
(Austin is in the heart of ``flash flood alley''), wildfires, severe 
weather, hazardous materials spills, and, especially over the past 18 
months, a pandemic.
    Our 2020 Annual Report [http://www.austintexas.gov/sites/default/
files/files/HSEM/2020%20Annual%20Report_Web.pdf] provides a good 
snapshot of our work. Quoting from my opening message in the report:

          ``2020 proved to be anything but a normal year, not only for 
        emergency management, but the Austin community with the 
        challenges we faced. It was a year that brought struggles for 
        many but was also a year that saw Austinites and other 
        communities come together and lead the way in tackling a global 
        pandemic.
          On March 1, 2020, the Austin-Travis County Emergency 
        Operations Center (A-TCEOC) was activated in response to COVID-
        19. In truly historical times, emergency operations have now 
        been sustained well into 2021--over a yearlong activation. The 
        COVID-19 response has brought together partners and 
        organizations across the region to provide support and care for 
        individuals.
          While COVID-19 was the headline for 2020, our staff has 
        continually met additional challenges head on as other events 
        unfolded throughout the year--staff pursued training and 
        learning how to combat new emergencies that our community faces 
        and handled numerous severe weather events ranging from extreme 
        heat to bitter cold. Additionally, Austin became a shelter for 
        many Hurricane Laura evacuees.
          In 2019, we began redevelopment our emergency plans to ensure 
        that our team maintains both its focus and readiness posture to 
        mitigate, respond to and recover from all-hazards emergencies 
        that affect our community, and that mission did not end with 
        COVID-19. These processes carried on well into 2020 as we 
        adapted and modified plans to meet growing challenges and is a 
        process that will continue every year.
          The lessons learned from 2020 will be invaluable to our 
        vision of being a disaster-prepared and resilient community and 
        will shape the future of emergency management responses.
          The partnerships forged during the trying year will ensure 
        that we are more prepared than ever.'' \1\
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    \1\ http://www.austintexas.gov/sites/default/files/files/HSEM/
2020%20Annual%20Report_
Web.pdf

    In 2020, we added nearly 50 temporary staff to help us respond to 
COVID-19, created a disaster reserve team to support response needs , 
logged 1.1 million response hours, sheltered thousands of Gulf Coast 
residents displaced by category 4 Hurricane Laura, coordinated the 
regional response to record breaking cold that crippled our state's 
power grid, distributed 71,676 units of hand sanitizer, distributed 
nearly 12 million pieces of personal protective equipment, housed 536 
severely at-risk individuals in temporary protective shelter, housed 
more than 2,000 people in an isolation facility for COVID-19, 
established an alternate care site for COVID-19 patients, coordinated 
medical staffing to 31 area hospitals and launched a mobile phone 
application to help residents be better prepared for disasters.
    Of course, we do not do this on our own. In addition to our City of 
Austin and our regional partners, our partnership with the Texas 
Division of Emergency Management (TDEM) and with the Federal Emergency 
Management Agency (FEMA) are critical to our efforts. We greatly 
appreciate their partnership and their support as our work would not be 
possible without it.
    As this Committee and Congress look at how the federal government 
can better support local emergency management efforts, my testimony 
will aim to provide constructive guidance with the aim of strengthening 
these partnerships and improving our ability to meet our core mission.
   Recent Laws: FACE Act of and Disaster Recovery Reform Act of 2018
    I would be remiss if I did not begin with a recognition of what 
Congress has done in recent years to improve the federal-state-local 
emergency management partnership. The Federal Advance Contracts 
Enhancement Act (FACE Act/PL 116-272) and the Disaster Recovery Reform 
Act of 2018 (PL 115-254) made important improvements to the federal-
state-local emergency management partnership. The full Transportation & 
Infrastructure Committee worked hard on these laws, and we deeply 
appreciate those efforts.
    Enacted in response to a 2018 General Accountability Office (GAO) 
report \2\, the FACE Act makes several improvements to the advance 
contracts process whereby FEMA provides its state and local partners 
with goods and services ahead of disasters so that they can be rapidly 
deployed. The bill implements GAO's recommendations to improve the 
advance contracts process, including providing state and local partners 
with updated and full information about available advance contracts, 
updating program guidance, and regular communication with congressional 
oversight committees.
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    \2\ https://www.gao.gov/assets/gao-19-93.pdf
---------------------------------------------------------------------------
    The Disaster Recovery Reform Act of 2018 made even more important 
improvements. It made it more difficult for FEMA to recapture disaster 
assistance funds based on technicalities and put a statute of 
limitations to recapture disaster assistance funds. There is no 
question that FEMA should have full authority to recapture disaster 
assistance funds that were willfully or carelessly misspent. However, 
FEMA all too often recaptures disaster assistance funds on the pretext 
of small violations of arcane procedural rules and regulations, the 
complexity of which are exacerbated by policy inconsistencies across 
regions and from year to year. That situation not only creates an 
adversarial relationship between FEMA and its state and local partners, 
but it leads to trepidation among state and local emergency managers 
and officials and a focus on bureaucratic minutiae when state and local 
emergency managers and officials should be focused on a bold and 
comprehensive disaster response effort. These provisions in the 2018 
law went a long way towards reducing that adversarial relationship and 
to allowing for a more robust state and local response in the immediate 
aftermath of a disaster.
    More importantly, Section 1234 of the 2018 law overhauled and 
bolstered FEMA's pre-disaster mitigation efforts, creating the Building 
Resilient Infrastructure and Communities (BRIC) and Flood Mitigation 
Assistance (FMA) programs. This may be the most important change 
Congress has made to FEMA programs in a generation. For too many years, 
there was much study, discussion, and debate about how our nation 
needed to shift from responding to disasters, usually in an ad hoc and 
increasingly expensive manner, to creating more resilient communities 
that are better protected from and prepared for disasters. BRIC and FMA 
put words into action, providing a major increase in federal funding 
for pre-disaster mitigation and better focusing that funding on local 
governments that implement local policies to make their communities 
more resilient.
    Austin has an excellent pre-disaster mitigation story I can share 
with the Committee. As I mention above, a major challenge facing Austin 
and other central Texas communities is the ever-present danger of flash 
floods. The combination of local topography, a rocky landscape, and 
rainfall events that are often severe and localized lead to flash 
floods that can quickly turn quiet streams into raging torrents with 
little or no warning. It is for good reason that Austin and Central 
Texas have been dubbed ``flash flood alley''.
    The City of Austin has taken a proactive approach to this problem, 
establishing a Watershed Protection Department [http://
www.austintexas.gov/department/watershed-protection] charged with 
protecting lives, property, and the environment by reducing the impact 
of flood, erosion, and water pollution. Where practicable, City policy 
favors a ``natural'' approach to flood damage protection that focuses 
on removing households and people from repetitive risk flood areas. 
Similarly, City policy promotes a ``natural'' approach to watershed 
protection and stormwater management that uses green infrastructure and 
natural elements to protect riparian areas and water quality.
    For example, in the Onion Creek watershed in a low- and moderate-
income neighborhood in south Austin, the City has partnered with the 
Army Corps of Engineers and FEMA to buy out and relocate more than 800 
households from a severely flood-prone neighborhood of single-family 
homes. After completion of those buyouts, the City and our federal 
partners restored the flood plain and its riparian areas to their 
natural state and created a new park that provides an array of 
recreational opportunities.
    The City combines these ``natural'' approaches with traditional 
grey infrastructure in areas where relocations are not practicable and 
natural, green infrastructure approaches are not practicable or 
sufficient. For example, to address flooding along Waller Creek, which 
runs from the University of Texas through the heart of downtown Austin 
before emptying into Lady Bird Lake, the City constructed the Waller 
Creek Flood Control Tunnel \3\ in downtown Austin. For years, severe 
flooding, erosion and water quality problems have beset Waller Creek. 
The Project consists of a stormwater bypass tunnel that will address 
high priority flooding, erosion, and water quality problems along lower 
Waller Creek. The mile-long tunnel will safely convey floodwaters by 
capturing and redirecting floodwater, creating an opportunity to 
restore the creek and revitalize the Waller Creek District. The Waller 
Creek Tunnel protects lives from the dangers of flash flooding, removed 
more than 28 acres of downtown from the floodplain, protects 42 
structures, 12 roadways and creates an environment suitable for 
redevelopment in the heart of downtown Austin, a centrally located area 
that is well served by existing infrastructure and provides easy and 
sustainable access (pedestrian, bicycle, and transit) to jobs, 
education, services, and other opportunities.
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    \3\ http://www.austintexas.gov/department/waller-creek-tunnel
---------------------------------------------------------------------------
    However, the City has been unsuccessful in obtaining much-needed 
BRIC funding for mitigation projects, despite the strong benefit cost 
analysis addressing an area that has been impacted multiple times, and 
where power and water plants are cut off from access. We feel this may 
be due in part because the State of Texas does not facilitate the 
adoption and enforcement of the latest published editions of Building 
Codes (IBC/ IRC 2015/ 2018). However, this reduction in points does not 
factor in the higher building standards at the local level, and this 
points system denies funding opportunities for worthy mitigation 
projects.
  Recent Austin Experience & How it Can Inform Efforts to Improve the 
                    Federal-State-Local Partnership
    As mentioned above, in 2020, HSEM added nearly 50 temporary staff 
to help us respond to COVID-19, logged 1.1 million response hours, 
sheltered thousands of Gulf Coast residents displaced by category 4 
Hurricane Laura, coordinated the regional response to record breaking 
cold that crippled our state's power grid, distributed 71,676 units of 
hand sanitizer, distributed nearly 12 million pieces of personal 
protective equipment, housed 536 severely at-risk individuals in 
temporary protective shelter, housed more than 2,000 people in an 
isolation facility for COVID-19, established an alternate care site for 
COVID-19 patients, and launched a mobile phone application to help 
residents be better prepared for disasters.
    Providing temporary protective shelter for the most vulnerable and 
at-risk residents of Austin proved to be one of our most difficult and 
most expensive challenges. In the wake of an early COVID-19 outbreak at 
our congregate shelter facility, the City acted, fearing that future 
outbreaks among people experiencing homelessness would pose a risk to 
those people and to the larger community, especially in terms of 
hospital capacity. Specifically, the City leased six hotels to provide 
protective shelter and isolation facilities to provide non-congregate 
shelter for people at high-risk of contracting COVID-19, including 
people experiencing homelessness.
    The Austin-Travis County Interim Health Authority established the 
non-congregate shelter program to provide quarantining and isolation to 
individuals exposed to, carrying, or at high-risk for severe illness 
from COVID-19. The City's actions were in accordance with FEMA policy 
allowing reimbursement for non-congregate shelter and support services 
on a case-by-case basis. In addition, the City closely consulted with 
FEMA Region VI and the State and hewed closely to CDC guidance.
    The COVID-19 pandemic represents the first time in U.S. history 
that every County, State and Territory is under identical and 
concurrent major disaster declarations. This unprecedented dynamic has 
FEMA regions making eligibility determination on similar issues, which 
has unfortunately resulted in inconsistent and non-uniform application 
of policy across the different regions. Public Assistance (PA) funding 
requests funnel through a series of reviews at the regional, 
Consolidated Resource Center (CRC) and headquarter levels. Given the 
complexity in program and policy, each region is given the latitude to 
apply certain discretionary interpretations of eligibility. For COVID-
19, this has resulted in certain FEMA Regions applying a more flexible 
eligibility interpretation than others. For the City of Austin within 
FEMA Region VI, this has resulted in an unfavorable situation where 
FEMA Region VI has indicated in writing that certain significant non-
congregate sheltering costs are ineligible for PA. Within FEMA Region 
IV and Region III similar costs have been approved and obligated.
    The City is incurring costs of approximately $3 million per month 
to lease six hotels to provide these services: one Isolation Facility 
(ISOFAC) for individuals who have been exposed to or tested positive 
for COVID-19 that do not require hospitalization but require quarantine 
or isolation; and five facilities that provide temporary protective 
sheltering facilities for asymptomatic, high-risk individuals who 
require emergency non-congregate sheltering as a social distancing 
measure (PROLODGE).
    FEMA has only approved the City's non-congregate sheltering request 
for June, citing the following concerns in response to requests for 
additional months:
    1.  Sheltering of individuals identified as homeless, ``high-
risk,'' or ``at-risk'' because they do not have secure housing 
arrangements would not be eligible for PA.
         The City of Austin contends that its ProLodges are an 
effective public health measure that is in alignment with FEMA, Center 
for Disease Control (CDC), and Local Health Authority guidance. 
Consistent with CDC guidance, and based on the direction the Public 
Health Authority for Austin-Travis County, the City identifies 
individuals over the age of 65; individuals of all ages with certain 
underlying medical conditions; and individuals without the ability to 
safely self-isolate, including those experiencing unsheltered 
homelessness, at increased risk for severe illness from COVID-19 and 
constitutes the designation of ``high-risk'' category. Providing 
temporary non-congregate sheltering to high-risk individuals is an 
effective public health measure that mitigates the transmission of 
COVID-19 and reduces the threat of inundating our area hospitals.
    2.  Individuals that have been identified as needing NCS must 
remain in the facility full-time. Sheltering costs incurred for 
individuals leaving the facility periodically during the day or night, 
and then returning, does not protect those individuals at the facility 
or the public at large, and, therefore, would not be eligible for PA.
         The City would like to clarify that at the at the IsoFacs, 
which are for individuals who have been exposed to or tested positive 
for COVID-19 that require quarantine or isolation, guests are not 
permitted to enter and leave at-will. At the ProLodges, which are a 
form of protective sheltering for asymptomatic high-risk individuals 
who cannot otherwise effectively socially distance, guests are 
encouraged to remain sequestered in their rooms and avoid other travel, 
unless deemed essential. The City has taken efforts to incentivize 
guests to remain in their rooms. However, as these individuals are not 
confirmed, or suspected carriers of COVID-19, the City does not and 
cannot legally restrict their movement.
    3.  Sheltering of individuals that exceeds 14 calendar days will 
require justification upon submission of request for reimbursement that 
identifies that the length of sheltering for individuals is based on 
health guidance and is limited to what is needed to address the 
immediate threat to public health and safety. CDC guidance recommends a 
14-day isolation or quarantine period for those that test positive or 
have been in contact with a person that tested positive.
         The City of Austin is in compliance with the CDC's recommended 
14-day maximum period for isolation or quarantining at the IsoFacs. 
Historically, the average length of stay at the IsoFac has been between 
6 and 7 days. There is not a specified timeframe for a guest duration 
at the ProLodges because there continues to be sustained virus 
transmission within the community and the Local Health Authority has 
regularly reassessed and ordered protective non-congregate shelters 
necessary to protect public health and safety. According to FEMA 
guidance the length of non-congregate sheltering depends on the needs 
in each area and should be in accordance with the guidance and 
direction from appropriate health officials. Following this guidance, 
the ProLodges are a form of protective shelter--not a quarantine or 
isolation site--meant to shelter high-risk individuals who are unable 
to social distance as a precautionary measure and deemed appropriate by 
Austin public health officials. Further, the City is providing case 
management for these individuals to find alternate housing solutions 
through a myriad of programs to relocate them from the non-congregate 
shelters.

    We greatly appreciated President Biden's January 21 and February 2 
Presidential Memoranda instructing FEMA to provide 100 percent 
reimbursement for state and local government emergency protective 
measures taken for the safe opening and operation of schools, 
hospitals, shelters, and transit systems. We were especially pleased 
that the Memoranda included 100 percent reimbursement for provision of 
non-congregate shelter, which has been a critical component of local 
prevention and response efforts, helping to contain transmission of 
COVID-19 among the most vulnerable and at-risk residents of our 
communities, helping contain community spread and preserving critical 
health care capacity.
    However, Austin is deeply concerned that FEMA has not consistently 
approved requests for reimbursement for non-congregate shelter, putting 
many local governments at risk of having to absorb significant costs. 
It is therefore critical that FEMA flexibly approve pandemic-related 
non-congregate shelter reimbursement requests uniformly across all FEMA 
regions.
    Cities, including Austin, established non-congregate shelter 
programs to specifically prevent and respond to COVID-19. They are not 
permanent programs and they have not replaced the homeless assistance 
efforts. They are a well thought out response to a temporary crisis 
that addresses the stark, on-the-ground reality that failing to shelter 
high-risk and vulnerable individuals during a pandemic poses a grave 
threat to public health and to healthcare capacity.
    An adverse FEMA decision on reimbursement requests for non-
congregate shelter reimbursement pose a serious risk to public health 
and our budget. The City of Austin has spent $40 million on non-
congregate shelter. The City acted in good faith to protect public 
health and to serve a very vulnerable population during this crisis. An 
adverse determination from FEMA would leave the City liable for 
considerable costs at a time of uncertain budgets.
                        Supply Chain Management
    Supply chain management is another subject that requires 
improvements to benefit the partnership between federal, state and 
local governments. As Austin sought out supplies, such as PPE, in 
response to COVID-19, it became clear that adequate levels of critical 
supplies would be a challenge, and the distribution of those supplies 
would be difficult as well.
    The need for a national strategy for supply chain management during 
a pandemic quickly became apparent as we found ourselves competing with 
our state and other cities for the same limited supply of PPE. Further, 
these limited supplies lead to price increases and unequal distribution 
patterns that were bad for our recovery efforts and ultimately bad for 
the taxpayer.
    At the outset of the COVID-19 pandemic, Austin needed to gather PPE 
quickly to provide the necessary supplies for our frontline workers, 
workforce, and general residency. after Austin was told by multiple of 
the nation's largest suppliers that orders of PPE for the City of 
Austin were not large enough, we found it necessary to partner with the 
City of Houston and the Texas Medical Center in Houston to purchase a 
massive supply of masks in Florida that would help accommodate our 
needs. After confirmation of the PPE purchase and as we were about to 
begin obligation the funds for the purchase, we were told by the 
supplier that the Texas Department of Emergency Management took 
possession of the supplies, before we could close the deal. In this 
situation, we found ourselves competing not only against other cities 
attempting to mitigate a disaster, but even our own state.
    This is the consequence of inequitable distribution of necessary 
supplies and a lack of a national strategy for supply chain management. 
Had there been a prioritization on the supply chain and we had been 
able to seek out one specific source for our necessary supplies, our 
efforts to provide PPE could have been much more effective and 
efficient.
    With that said, the City of Austin appreciates that in the wake of 
Hurricane Katrina, Congress enacted legislation to address supply chain 
issues, however, the COVID-19 pandemic has illustrated that there is 
much room for improvement and that empowering and trusting local 
partners could be an important part of the solution.
                               Resources
    My final plea is likely one you hear from stakeholders on a wide 
array of issues, but it is one I cannot leave out of my testimony. I 
recognize that I am addressing an authorizing committee and that annual 
funding decisions are the domain of the Appropriations Committee, but I 
must close my testimony with a discussion of funding.
    If Congress and FEMA address the concerns raised above, it would 
significantly improve the federal-state-local partnership and our 
ability to meet our joint emergency management mission and serve our 
community. However, sometimes the best answer is also the simplest one. 
If Congress really wants to bolster local emergency management, I urge 
you to increase funding for core programs such as Emergency Management 
Performance Grants (EMPG), the Urban Area Security Initiative (UASI), 
and the State Homeland Security Grant Program (SHSGP).
    Annual appropriations for the FEMA Disaster Assistance Account and 
emergency supplemental appropriations bills enacted in response to 
disaster garner the most attention (and money), but EMPG, UASI, and 
SHSGP are the foundation of local emergency management efforts. 
Unfortunately, the sequester and budget austerity that followed the 
2011 Budget Agreement did not spare these core programs. Funding for 
these programs has not kept pace with population growth, inflation, 
and, most importantly, need.
      Congress provided $350 million for EMPG in FY 2021, 
barely above its FY 2010 level of $340 million.
      Congress appropriated $615 million for UASI in FY 2021, 
well below its FY 2010 level of $887 million.
      Congress appropriated for $610 million for SHSGP, well 
below its FY 2010 level of $950 million.

    The EMPG program is the primary source of funding available to 
local communities to support preparedness, response, recovery, and 
mitigation. Local Emergency Management Programs are understaffed most 
consisting of just one person and are struggling to keep up with the 
new demand placed upon them with the pandemic and climate change. EMPG 
fund flows to local communities through the state as a sub award. There 
are no requirements for state to allocate funds to local communities 
and as a result, access to EMPG funding varies from state to state. 
Even in my state which is one of the only to have a process to support 
local programs, we have seen consistent reductions from 30 to 60%. 
Enhancement to EMPG should also include mandate on minimum pass through 
to local governments or a separate process.
    On UASI, I know that committee members are fully aware of what it 
means to serve a community at the margin of participation in the 
program at the current, reduced funding levels. Austin falls on the 
wrong side of the participation margin each year. We have not 
participated in UASI since Congress reduced funding for the program in 
FY 2011. Even communities, such as Las Vegas and Orlando, that are 
fortunate to remain on the right side of that margin saw considerable 
drops in their allocations and face annual uncertainty about whether 
they will receive federal funds to sustain investments made with UASI 
funds.
    I would be happy to outline the reasons why I think Austin should 
be a UASI participant. Indeed, my testimony in many ways makes that 
argument. At the end of the day, every community can do an excellent 
job of outlining the ways that they are vulnerable and how they would 
benefit from participation in UASI. For metropolitan areas such as 
ours, which face real threats and have real needs, the best answer lies 
not in tweaking the UASI threat risk assessment but in Congress 
increasing funding for the program to ensure that many more Americans 
benefit from UASI.
    For Committee members who represent large metropolitan areas that 
face little to no threat to their participation in the UASI program, I 
discourage you from pursuing or supporting ill-advised attempts to 
limit participation in the UASI program to the largest metropolitan 
areas. Such a policy would leave tens of millions of Americans more 
vulnerable. In addition, it would significantly reduce support for the 
program in Congress, especially in the Senate, where the needs of 
metropolitan areas already struggle for recognition.
    The benefits of UASI are considerable. Communities that are 
fortunate to participate in the program are better able to not only 
meet their equipment, training, and preparation needs, but they benefit 
from the regional collaboration and cooperation that the UASI program 
encourages. The UASI program benefits urban areas by assisting 
communities to develop regional solutions, creating mission ready 
capabilities which can make our communities more resilient. An Austin 
UASI award would allow our region to develop strategies to establish 
capabilities like alternate care sites, mass care and sheltering, 
develop evacuation plans and reception centers and regional resource 
staging strategies.
                               Conclusion
    I am pleased that the Committee is looking at how Congress can 
improve the federal-state-local emergency management partnership so 
that state and local emergency managers can better prepare and protect 
our communities. I am happy to answer questions and to provide any 
additional information that the Committee might find helpful as you 
work on this issue. Thank you for the opportunity to testify.

    Mr. DeFazio. OK. I thank the gentleman. Dr. Boskin?
    [Pause.]
    Dr. Boskin, you are recognized for 5 minutes.
    Mr. Boskin. Chairman DeFazio, Ranking Member Graves, other 
members of the committee, it is a pleasure to be here and speak 
to you about the macroeconomics of the COVID relief program and 
prospective new spending.
    Let me start by saying I support policies to mitigate 
short-run economic pain caused by a crisis like the COVID-19 
pandemic and help spur recovery, as long as the long-run cost 
is reasonable.
    As the economy has recovered considerably since those 
horrible days of spring 2020, the potential short-run 
macroeconomic benefits of additional spending are much lower 
now than then, and other additional spending is better focused 
on long-run, societal benefits with spending levels, 
allocations among projects, and financing methods designed to 
pass rigorous national cost-benefit tests.
    The macroeconomic literature suggests that spending 
``multipliers,'' quote/unquote, are much lower than had been 
traditionally assumed, and the best academic evidence of what 
the 2009 stimulus bill did had multipliers about one-third of 
what was originally thought by those who analyzed the bill, a 
spending multiplier of about 0.6.
    But America certainly has infrastructure needs. We need to 
get good, productive, long-run infrastructure investments. I 
attached a table in my written testimony that gives some idea 
of the scope and breadth and depth of America's infrastructure 
enterprise, and it is only a modest fraction of proposed 
spending these days.
    Done well, the program can produce considerable societal 
benefits, but done to excess or with poor design incentives, a 
plethora of poor-return projects, even boondoggles, would 
likely result.
    As a general guide, the larger the appropriated spending, 
the greater the likelihood of the laws of diminishing returns 
and unintended consequences creating a large set of substandard 
projects.
    Ditto the further the financing method deviates from one of 
already appropriated funds, and especially user fees or their 
gas and vehicle-miles traveled, a tax equivalence that tie the 
benefits received to the payments made.
    It should be known that the economy is now above its pre-
pandemic level and is growing solidly. While risks remain, and 
we should have a close eye on job growth to make sure 
unemployment continues its downward momentum to full 
employment--it seems to be perhaps around two or three 
percentage points of employment below where it could be--it 
does not appear likely to need considerable additional short-
run stimulus on top of that already provided and in process.
    Some argue that additional substantial spending would 
dramatically spur growth and employment. With Government 
borrowing rates low, the argument goes, deficit finance amounts 
to a cheap way to increase employment.
    In fact, existing research suggests that is a misguided 
conclusion. While infrastructure spending may have made for 
good short-run stimulus in the 1930s with much higher excess 
capacity of unemployment and different technologies for public 
projects, that is not the case today as Harvard's Ed Glaeser 
has compellingly argued.
    The best evidence suggests that every dollar of spending 
would increase GDP about 60 cents, even in a soft economy.
    Of course, when the dollar is financed with taxes, those 
have costs too, and that hasn't been emphasized enough. When we 
raise a dollar in taxes today, or in the future, at present 
discounted value of a dollar, to cover the interest payments on 
any debt issued, the cost rises with the square of tax rates.
    If we double the tax rates, the harm from the distortions 
of decisions to work, save, invest, innovate, hire, et cetera, 
quadruples. This has nothing to do with doctrinal issues. It 
has purely to do with the area under supply and demand curves 
that every student learns in ``Economics 1.''
    The CBO estimates also that the return on public 
infrastructure projects is around 5 percent. It is below that 
for private investments. It should be careful to have very good 
projects chosen that pass rigorous national, as opposed to 
local, cost-benefit tests.
    A good example of the mismanagement of that is California 
high-speed rail. Using $3 billion from the 2009 Recovery Act, 6 
years later, that was used to build a tiny initial start of 
what was supposed to be a high-speed rail project but is now 
blended-speed rail because they have to use a lot of existing 
track, much slower, meaning massive technical difficulties, 
epically mismanaged, and the total cost seems to have at least 
tripled. So we have to be very careful about what we do.
    In addition, inflation risks are rising. I think everybody 
understands the short-run inflation. Economists are still 
debating how much of that will continue and be entrenched in 
expectations, and continue, I think, some of it will, far from 
all of it.
    And we should realize that debt is already not only high, 
but we have large, unfunded liabilities in Social Security and 
Medicare, which when combined, are more than three times the 
regular national debt.
    Also important to note that when we have funding too 
abundant and not closely tied to national, as opposed to local, 
benefits, the political incentives exacerbate the tendency to 
fund too many low-return projects.
    Finally, I would say that infrastructure spending, because 
it seems to be one area that is subject to bipartisan interest, 
and is likely to be passed at some point, I assume, we need to 
be careful about doing these projects in a way that adds to 
long-run productivity.
    When I am talking about a national cost-benefit test, as 
opposed to something purely internal and [inaudible]----
    Mr. DeFazio. OK. All right. Dr. Boskin, if you could 
summarize, that would be great.
    Mr. Boskin. OK. Thank you. A good example would be 
decongesting ports which have national, international goods 
flowing through them, good for the whole country.
    So while I believe that the stimulus of COVID relief 
packages helped cushion the economy and spur recovery, it has 
limited, modest, macroeconomic benefits but considerable 
humanitarian justification, and that is the main basis on which 
it did good. Thank you.
    [Mr. Boskin's prepared statement follows:]

                                 
   Prepared Statement of Michael J. Boskin, Ph.D., Tully M. Friedman 
   Professor of Economics and Wohlford Family Senior Fellow, Hoover 
         Institution, Stanford University, on behalf of himself
    The ``Covid-recession'' was unprecedented in its cause and in its 
depth and speed as dated by my colleagues on the NBER Business Cycle 
Dating Committee. The $5 trillion dollar cumulative Covid response 
spending by the federal government thus far and related FED policies 
certainly both helped the economy recovery more quickly and cushioned 
the hardship experienced by many. Given the immense ex ante uncertainty 
that accompanied the rapid lockdown of much of the economy and the 
early massive unemployment, it should be expected that the policy 
response likewise was unprecedented.
    I support policies to mitigate short-run economic pain caused by a 
crisis like the COVID-19 pandemic and help spur recovery, as long as 
the long-run cost is reasonable. As the economy has recovered 
considerably since those horrible days of March and April 2020, the 
potential short-run macroeconomic benefits of additional spending are 
much lower now than then and any additional spending is better focused 
on long-run societal benefits with spending levels, allocations among 
projects and financing methods designed to pass rigorous national cost-
benefit tests.
    It is early days in the detailed evaluations of the economic 
effects of the several responses to the Covid crisis and recession, and 
their many components, by independent scholars, I will address my 
comments to the desirability of additional spending, and its methods of 
finance under consideration for traditional infrastructure. I present 
what I believe are the best estimates based on leading academic 
research on the short-run impacts of government spending, especially on 
infrastructure (as opposed to, say, transfer payments, for which 
whatever the desirability may be on other grounds, the macroeconomic 
benefits are far less). Much of the research I cite below is based on 
evaluations of the 2009 ARRA, but some focus as well as other data and 
periods.
    But first, America certainly has infrastructure needs. The American 
Society of Civil Engineers, serious if somewhat self-interested, rates 
the nation's infrastructure a C-. Some claim there is a multi-trillion 
dollar ``infrastructure deficit'' and others have long blamed 
inadequate public investment in infrastructure for holding back U.S. 
economic productivity (e.g., Aschauer, 1991). Yet others argue that a 
closer analysis shows U.S. infrastructure in much better shape, and 
advocate for improving the allocation of funding over massive new 
expenditures (Duranton, Nagpal, and Turner, 2020). In a similar vein, 
the World Economic Forum rates U.S. infrastructure 13th out of 141, 
behind top rated Singapore and Hong Kong, but ahead of countries like 
Sweden and Denmark.
    At even a fraction of some of the infrastructure spending being 
discussed today, there is ample opportunity to do considerable 
productive long-run infrastructure investment (the attached Table is my 
attempt to give a sense of the scale of the nation's infrastructure). 
But only some of that is appropriately a governmental, and only a part 
of that is appropriately a federal, responsibility. And the long-run 
net economic effects of a new federal infrastructure program, following 
the expiration of the 2015 FAST ACT and the impending exhaustion of the 
Highway Trust Fund will depend not just on the level of spending, but 
also the ex-ante quality of the projects funded, their ex post 
execution and their financing method(s).
    Done well, the program can produce substantial societal benefits; 
but done to excess or with poor design incentives, a plethora of poor 
return projects, even boondoggles, would likely result. As a general 
guide, the larger the appropriated spending, the greater the likelihood 
of the laws of diminishing returns and of unintended consequences 
creating a large set of sub-standard projects. Ditto the further the 
financing deviates from use of already appropriated funds and user fees 
or their gas and vehicle miles driven tax cousins. In short, the 
federal infrastructure program should fund projects that pass rigorous 
national cost benefit tests and the better aligned the incentives for 
state and local officials, federal authorities and private citizens, 
the more likely that result becomes.
    It should be noted that the economy is now back to its pre-pandemic 
level and is growing solidly. While risks remain and we should keep a 
close eye on job growth to make sure unemployment continues its 
downward movement to full employment, it does not appear likely to need 
considerable additional short-run stimulus on top of that already 
provided and in process. And some argue the risk of entrenching longer-
term some of the considerable recent inflationary pressures are a 
greater risk. Certainly the larger the program and the more front-
loaded, the bigger that risk.
    Some suggest that huge additional infrastructure spending will 
dramatically spur growth and employment. With government borrowing 
rates low, the argument goes, deficit finance amounts to a cheap way to 
increase employment. In fact, existing research suggests that is a 
misguided conclusion. First, while infrastructure spending may have 
made for good short-run stimulus in the 1930s, that is not the case 
today (Glaeser 2016). The best evidence (Ramey (2019, 2020) is that 
each dollar of infrastructure spending would increase GDP only 60 
cents--even in a soft economy, there are no magically large 
multipliers.
    And, of course, when the dollar is financed with taxes (now, or in 
the event debt-finance is used, later), the tax hikes exact a cost on 
the economy. Students learn in Economics 1 that cost rises with the 
square of tax rates; doubling rates, quadruples the harm from the 
distortion of private decisions to work, hire, save, invest, innovate, 
etc. Thus, the incremental cost rises with the tax rate. This is not a 
doctrinal issue; it has to do with the area under supply and demand 
curves. A rough estimate would be that each dollar of taxes (now or in 
discounted present value terms later to pay interest on the debt) costs 
the economy about $1.25-$1.30. So the projects chosen for funding 
really do need to be prospectively high societal return, yet the CBO 
estimated the return on public infrastructure investment at 5%, just 
half of the return on the private investment likely to be crowded out 
by taxes or debt. The best way to minimize these distortionary costs is 
to finance the spending with user fees or, where applicable, their tax 
cousins, the gas tax and vehicle miles driven tax, that tie the 
responsibility for payment closely to the benefits received.
    Debt finance of the Covid relief funding was certainly justifiable 
in a deep recession and early in an uncertain recovery, but is unwise, 
even risky (Boskin, 2020) in normal times. Historically, huge debt 
buildups have usually been followed by serious problems: sluggish 
growth, an uptick in inflation, a financial crisis, or all of them. We 
cannot be certain which problems will occur or what debt-to-GDP ratio 
will signal trouble for which countries. And the US does have the 
advantage of issuing the world's leading reserve currency, at least for 
time being. But inflation risks are rising--a trend that more deficit-
financed spending will only accelerate. To be sure, I support policies 
to mitigate the short-run economic pain caused by a crisis like the 
COVID-19 pandemic and help spur recovery, as long as the long-run cost 
is reasonable. But be careful not to run huge deficits that persist 
long after the economy is back to full employment (the Administration 
projects the unemployment rate to be down to 4.1% next year and a low 
of 3.8% thereafter).
    It is also important to realize that only a very small fraction of 
those unemployed today have the skills and experience for the kind of 
work required by today's infrastructure challenges; we cannot instantly 
train the unemployed to safely and effectively operate tower cranes or 
giant excavators, for example. There are few public infrastructure 
projects that require only a shovel. Additionally, planning and 
approval hurdles that were absent in the 1930s are omnipresent today, 
slowing the speed with which funds can be disbursed and infrastructure 
built. As a result, research has found that large increases in 
infrastructure spending within a short window of time may lead not to 
increases in employment, but to backlogs that result in higher profits 
for a relatively small set of contractors (Balat, 2017).
    Worse yet, when federal funding is too abundant and not closely 
tied to national, as opposed to local, benefits, political incentives 
exacerbate the tendency to fund too many low return projects. A prime 
example is the boondoggle of California's High-Speed Rail project, 
which originally used a grant from the 2009 ARRA to pay, six years 
later, for a tiny initial rail line. The entire project is mired in a 
tripling of cost estimates, technical problems and epic mismanagement 
for what is now prospectively blended speed rail amid widespread lack 
of support and outright hostility in the Central Valley where 
billboards clamor to ``Build Dams Not Trains.''
    Second, large public infrastructure projects--highways, dams, 
etc.--are designed to last many decades, and eventually interest rates 
on government debt will rise and render rolling over the larger debt 
much more expensive. CBO (2021) estimates net interest payments as a 
share of (rising) GDP will increase sharply beginning in the middle of 
this decade and more than triple in the following two decades, with 
interest costs exceeding even rapidly growing spending on Social 
Security, and dwarfing all discretionary spending, including on 
defense. Thus, the view that infrastructure spending in today's low-
interest rate environment is essentially a free lunch is misguided.
    While large changes in interest rates are unlikely in the near 
term, the is fact financial markets and government and private 
forecasters have often failed to anticipate them--for example, during 
the inflation of the 1970s and the disinflation of the early 1980s. 
After 2008, all grossly underestimated how long the Fed would keep its 
target interest rate at zero.
    Infrastructure spending seems to be one of a few areas of potential 
bipartisan agreement. As mentioned above, there is ample room for a 
considerable well-crafted infrastructure spending program that is 
economically beneficial. Some policymakers, interest groups, and 
constituents still view infrastructure spending as shovel-ready work 
that is both desperately needed and great at creating new jobs. As 
President Obama eventually stated ``there's no such thing as shovel-
ready projects.'' The New Deal did not end the Great Depression, nor 
did Japan's massive ongoing infrastructure expenditures spare it from 
its ``lost decades.'' To repeat, most of the unemployed do not have the 
skills or experience to operate modern equipment such as giant 
excavators and tower cranes.
    Recent academic evidence on the matter, however, does suggest that 
better allocation of infrastructure spending is more important for 
long-run productivity than increased spending (Duranton, Nagpal, and 
Turner, 2020), and casts doubt on whether a large allocation of federal 
funds for infrastructure will work as an effective stimulus (e.g., 
Balat, 2017; Gallen and Winston, 2019; Ramey, 2020).
    Garin (2019) studies how funding allocated by the federal 
government for road construction projects through the 2009 American 
Recovery and Reinvestment Act (ARRA) affected local employment. He 
finds that every dollar of ARRA spending increased local construction 
payrolls by thirty cents, but had virtually no effect on employment. 
Balat (2017) analyzes the effect of ARRA spending on highway-related 
procurement in California, finding that the sudden infusion of cash 
into an industry that was already working near capacity did not grow 
the number of construction firms or construction employment, but 
resulted in higher procurement prices. This capacity constraint is 
directly at odds with a 1930s vision of what infrastructure spending 
can accomplish. The highly specialized and technologically advanced 
nature of the work now requires skills, experience, and certifications 
that make it difficult to quickly expand the number of firms and 
workers. In California, Balat (2017) finds that the government paid 
6.2% more on stimulus projects and 4.8% more on other projects as a 
result of ARRA, stimulating the economy by increasing construction 
company revenues, but forgoing about $335 million that could have been 
spent on other road projects.
    Additional work, such as Ramey (2020), demonstrates that 
infrastructure spending is usually slow to move from appropriation to 
implementation to actual use, making even the most productive and most 
shovel-ready projects poor candidates for short-run economic stimulus. 
In fact, as Gallen and Winston (2019) argue, disruptions that come from 
a slew of highway infrastructure projects can even result in negative 
short-run effects on total employment. Studies of the ARRA also provide 
cautionary tales on the ability of infrastructure spending to create 
jobs in the short-run and on the cost of doing so. Leduc and Wilson 
(2017), for example, find a cost of $500,000 per job in 2010, 
considerably costlier than the roughly $125,000-$200,000 per job that 
other papers have attributed to ARRA spending overall (Wilson, 2012; 
Conley and Dupor, 2013).
    Long-run productivity is a different story, but the devil is in the 
details. As discussed above, the research literature generally stresses 
that quality and rigor behind fund allocation and incentive preserving 
funding mechanisms are key to large enough long-run returns to justify 
the spending, much more so than the sheer volume of spending. In 
particular, repairs and maintenance seem to have consistently higher 
returns than new construction.
    In conclusion, the evaluation of government spending in response to 
previous recessions suggests quite limited short-run macroeconomic 
benefits. The ex-post estimates of spending ``multipliers'' for ARRA 
was one-third that of Administration economists is 2009.The response to 
the unprecedented Covid pandemic and recession likely did somewhat 
better, and the humanitarian case given the widespread suffering was 
compelling. But as the economy approaches full employment, the case for 
additional spending as ``stimulus'' is far weaker and tax and deficit 
financed spending likely will be quite costly in the longer-term. The 
most compelling case for additional federal spending is simply to find 
good projects and methods of financing that pass rigorous national (not 
local) cost-benefit tests based on sensible estimates of the factors 
affecting benefits and costs. That should conceptually govern the size 
of the spending. But given the budgetary process, the headline number 
will undoubtedly be determined by other factors. But then the federal, 
state and local agencies involved need to hew as closely as possible to 
the dictates of cost-benefit tests to maximize the opportunity for 
reasonable returns on the (current and/or future) taxpayers' 
investment.
References:
Aschauer, David A. 1991. ``Infrastructure: America's Third Deficit,'' 
    Challenge, 34(2), pp.39-45.

Balat, J., 2017. ``Highway Procurement and the Stimulus Package: 
    Identification and Estimation of Dynamic Auctions with Unobserved 
    Heterogeneity.'' Working Paper.

Boskin, Michael J. 2020. ``Are Large Deficits and Debt Dangerous?'' 
    NBER Working Paper No. 26727 (condensed version published in 
    American Economic Association Papers and Proceedings, Vol. 110, 
    May, pp145-48).

Brooks, Leah and Liscow, Zachary. 2019. ``Infrastructure Costs,'' 
    Hutchins Center Working Paper No. 54, Brookings Institution.

Brooks, Leah and Liscow, Zachary. 2020. ``Can America Reduce Highway 
    Spending? Evidence from the States'' in Economic Analysis and 
    Infrastructure Investment. University of Chicago Press.

Congressional Budget Office, The 2021 Long-Term Budget Outlook, March.

Conley, Timothy G. and Dupor, Bill. 2013. ``The American Recovery and 
    Reinvestment Act: Solely a Government Jobs Program?'' Journal of 
    Monetary Economics, Vol. 60, Iss. 5, pp. 535-549.

Duranton, Gilles, Nagpal, Geetika, and Turner, Matthew A. 2020. 
    ``Transportation Infrastructure in the US,'' in Economic Analysis 
    and Infrastructure Investment. University of Chicago Press.

Gallen, Trevor and Clifford Winston, 2019. ``Transportation and its 
    Effects on the U.S. Economy: A General Equilibrium Approach.'' 
    Technical report, Purdue University.

Garin, A. 2019. ``Putting America to Work, Where? Evidence on the 
    Effectiveness of Infrastructure Construction as a Locally Targeted 
    Employment Policy,'' Journal of Urban Economics, 111, 108-131.

Glaeser, Edward L. 2016. ``If You Build It . . . Myths and Realities 
    About America's Infrastructure Spending,'' City Journal.

Leduc, Sylvain, and Daniel Wilson. 2017. ``Are State Governments 
    Roadblocks to Federal Stimulus? Evidence on the Flypaper Effect of 
    Highway Grants in the 2009 Recovery Act.'' American Economic 
    Journal: Economic Policy, 9 (2): 253-92.

Ramey, Valerie A.2019. ``Ten Years After the Financial Crisis: what 
    Have We Learned From the Renaissance in Fiscal Research?'' Journal 
    of Economic Perspectives, Vol. 33, No. 2.

Ramey, Valerie A. 2020. ``The Macroeconomic Consequences of 
    Infrastructure Investment'' in Economic Analysis and Infrastructure 
    Investment. University of Chicago Press. http://www.nber.org/
    chapters/c14366

Wilson, Daniel J. 2012. ``Fiscal Spending Jobs Multipliers: Evidence 
    from the 2009 American Recovery and Reinvestment Act,'' American 
    Economic Journal: Economic Policy, Vol. 4, Iss. 3, pp. 251-282.
          America's Vast and Varied Infrastructure Enterprise
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    Mr. DeFazio. Dr. Edelberg, you are recognized for 5 
minutes.
    Ms. Edelberg. Chairman DeFazio, Ranking Member Graves, and 
members of the committee, my name is Wendy Edelberg, and I am 
director of The Hamilton Project, and a senior fellow at the 
Brookings Institution. Before coming to Brookings, I was Chief 
Economist at the Congressional Budget Office.
    Thank you for this opportunity to discuss the economic 
outlook as the committee and the Congress consider significant 
infrastructure legislation. I will make three points in my 
remarks.
    First, the enormous fiscal support enacted by Congress has 
been essential to getting the economic recovery on track.
    Second, the pace of economic recovery, which was rapid in 
the first three quarters of this year, is creating both 
opportunities and challenges.
    And third, more robust Federal investment in infrastructure 
in the coming years will improve our longer term economic 
prospects.
    Real GDP has recovered to its pre-pandemic level, and 
growth has consistently surpassed consensus expectations. 
Notably, in the third quarter of 2020, actual GDP was about 5 
percent above the projection that CBO published at the 
beginning of that quarter.
    Indeed, CBO now projects that by the end of 2023, GDP will 
actually be higher than its pre-pandemic path.
    One primary factor behind the surprising strength in 
economic output has been the fiscal support enacted by 
Congress. Despite a continued shortfall in employment, 
disposable personal income has, so far, been higher than its 
recent trend by a cumulative $1.4 trillion since March 2020.
    With the ongoing efforts and fiscal support, as well as 
pent-up demand from consumers for face-to-face services, and a 
sharp increase in asset prices, economic growth is poised to 
grow roughly 6 percent in 2021.
    Of course, the strength of the economy is entirely 
contingent on the pace of vaccination and our ability to 
control the pandemic.
    It is also contingent on Congress avoiding a crisis that 
could be triggered by not raising the debt ceiling.
    Under current law, the boost to DPI from Government 
benefits should fully wane by early next year. As this and 
other factors boosting household spending dissipate, I expect 
real GDP growth to slow significantly, being just above 1 
percent in 2023 under current law. This brings me to my second 
point.
    Although my baseline projection is for a soft landing with 
GDP merely moving sideways for a couple of quarters, there is a 
risk that the slowdown could be more abrupt and painful.
    With growth and demand for workers outstripping growth and 
supply, we have seen upward pressure on some wages. Wages for 
those in the bottom 25 percent of the distribution are up more 
than 7 percent from the pre-pandemic level.
    At the same time, we have seen bottlenecks and supply chain 
disruptions for a variety of goods that have resulted in sharp 
increases in some prices, most notably, new and used vehicles.
    With greater inflation, workers' purchasing power is rising 
much slower than nominal wages. Real wages, for the bottom 
quartile, are up 2\1/2\ percent from the pre-pandemic level.
    As production has increased, and growth and demand abates, 
I expect inflation to slow overall. Nonetheless, one risk 
created by the pace of recovery is that certain factors will 
continue to create inflationary pressure.
    Thinking beyond the next couple of years brings me to my 
last point.
    One channel through which fiscal policy influences long-run 
economic growth is Federal investment in infrastructure, 
education and training, and research and development.
    The consensus of the economic literature strongly supports 
that increases in such investment lead to greater productivity 
and greater economic growth.
    Since 1980, the decline in Federal investments, as a share 
of GDP, has been driven by declining investment in physical 
infrastructure. Indeed, in 2019, Federal investment in 
infrastructure, as a share of GDP, was at its lowest level 
since the mid-1950s. The result has been a less robust and less 
resilient economy.
    To wrap up, the expected rapid economic recovery from the 
COVID-19 recession creates risks to which policymakers should 
be attentive. Fiscal support has been essential to accelerating 
the recovery, but now, it is appropriate for fiscal policy to 
turn toward solving more structural, long-term challenges. That 
includes more robust Federal investment. The expected slowness 
in outlays that is inherent to Federal investment is a benefit 
given the current economic projection.
    Most importantly, an ambitious increase in Federal 
investment in infrastructure is key to improving our long-term 
economic prospects.
    Thank you, and I look forward to your questions.
    [Ms. Edelberg's prepared statement follows:]

                                 
  Prepared Statement of Wendy Edelberg, Ph.D., Director, The Hamilton 
        Project, The Brookings Institution, on behalf of herself
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee:
    Thank you for the opportunity to discuss the economic outlook as 
this Committee and the US Congress consider enacting significant 
infrastructure legislation this year.
    A founding principle of The Hamilton Project's economic strategy is 
that long-term prosperity is best achieved by promoting economic 
security, economic growth, and broad participation in that growth. 
Through our research, policy papers, and public events we examine ways 
to realize those goals based on sound economic theory and evidence. For 
more than 15 years, The Hamilton Project has focused on policies to 
increase investment in public infrastructure--highlighting strategies, 
financing mechanisms, the economic returns on infrastructure 
investment, and the role of such investment in creating prosperity in 
local and state economies.
                              Introduction
    Despite the headwinds created by the Delta COVID-19 variant, the 
economy is recovering. Economic growth during the pandemic has 
generally surpassed consensus expectations while households and 
businesses have maintained a surprising amount of activity and spending 
while social distancing.
    The strength in economic output was, in part, a result of the 
enormous legislative response to both the pandemic and to the human 
hardship it caused. This includes laws passed in 2020 and 2021 by 
Congress, chief among them the Coronavirus Aid, Relief, and Economic 
Security Act (CARES Act), the Consolidated Appropriations Act, and the 
American Rescue Plan Act. Successive rounds of substantial fiscal 
support have boosted economic activity since March 2020 and are 
projected to continue to do so through 2023. To give a sense of the 
potential impact of federal action on the economy, Edelberg and Sheiner 
(2021a) estimated that a package of similar magnitude to the American 
Rescue Plan would boost economic output by 4 percent in 2021 and 2 
percent in 2022.
    I draw the following conclusions at this point in the economic 
recovery. First, the initial rapid economic recovery and expected 
slowing creates risks that policymakers should heed. Second, fiscal 
support has been essential to accelerating the recovery. Third, greater 
federal investment in infrastructure, both physical and human, is key 
to improving the country's longer-term economic prospects. It is the 
right time to enact an ambitious federal investment package to put in 
place public infrastructure that is once again a vital factor in 
improving productivity and economic growth.
                         The Economic Recovery
    With the ongoing effects of fiscal support, pent-up demand from 
consumers for face-to-face services, and the strength in labor markets 
and asset prices, economic growth is poised to be strong for the 
remainder of 2021. Indeed, the Congressional Budget Office (CBO) 
projects that real GDP will grow 7.4 percent from the fourth quarter of 
2020 to the fourth quarter of 2021 (CBO 2021c). Moreover, CBO predicts 
that, by the middle of 2022, real GDP will exceed its sustainable level 
by 2.5 percent. The sustainable level of GDP, also known as potential 
output, is not a ceiling. Instead, it is the estimated level of output, 
given current laws and underlying structural factors, that the economy 
can achieve without putting upward pressure on inflation. As the 
factors boosting growth in the short term begin to wane, I expect real 
GDP growth to slow significantly, to just above 1 percent in 2023.
    CBO's projection is subject to a great deal of uncertainty. In 
particular, the resurgence in the pandemic stemming from the Delta 
variant, vaccine hesitancy, and the slowness in vaccinating children 
ages 12 and younger appear to have dampened the growth of consumer 
demand and employment. Recent data suggest that the latest COVID-19 
wave might be waning. However, if the Delta variant--or others that 
take its place--continue to affect consumer behavior and supply chains, 
the economic recovery will be notably slower.
    In addition, although my projection is for a soft landing,, 
including a couple of quarters with GDP roughly moving sideways, the 
slowdown could be more abrupt and painful than those projections 
suggest. There are actions that Congress could take to help avoid a 
painful slowdown in activity--both by fine-tuning the timing of 
spending and by focusing resources on policies that boost potential 
output. For example, changes in policy that repurpose fiscal support 
from boosting current aggregate demand to policies that would boost the 
economy's potential (such as federal investment in infrastructure that 
would increase labor supply and human capital) would increase the 
chances of a soft landing, in part by raising the landing area to a 
higher level.
    The Uneven Nature of the COVID-19 Pandemic and Economic Recovery
    As of September 26, 2021, more than 687,000 people in the United 
States have died from COVID-19; and more than 4.7 million have died 
worldwide (Johns Hopkins 2021). At the onset of COVID-19, the virus 
displayed clear geographic trends, beginning in densely populated 
coastal cities then spreading to more rural parts of the country 
(Desjardins 2020). With the pandemic first hitting the Northeast, in 
April of 2020 New York and New Jersey accounted for more than 60 
percent of deaths and more than 40 percent of hospitalizations from 
COVID-19. The Delta variant and vaccine hesitancy have changed the 
geographic patterns: as shown in figure A-1, since mid-July 2021 
patients hospitalized with COVID-19 in the South have risen to account 
for nearly two-thirds of the US total, with half of those patients in 
Florida and Texas (broken out from the rest of the region in the 
figure).
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    The economic downturn caused by the pandemic has created widely 
different experiences across sectors and demographic groups. In the 
spring of 2020, spending on consumer services sharply contracted and 
has yet to fully recover. Indeed, of the 22 million total jobs lost in 
March 2020, nearly 19 million were in service-providing businesses, 
including a decline of 8 million in leisure and hospitality. Leisure 
and hospitality has added back more than 6.5 million jobs so far; as a 
result, it is still 10 percent short of returning to its pre-pandemic 
level, and even farther below its expected level in the absence of the 
pandemic. Other industries, such as financial services, that 
experienced shallower dips in employment during the onset of the 
pandemic, have also been the quickest to recover as their workforces 
were better able to shift to remote work.
    Those sector dynamics disproportionately hurt women, non-white 
workers, lower-wage earners, and those with less education (Stevenson 
2020). Because workers among those groups were more likely to be 
employed in the services sector, and in particular in the leisure and 
hospitality sector, they experienced job losses at much higher rates. 
For example, the gap in the rates of unemployment between Black and 
white men jumped from 3 percentage points to 6 percentage points during 
the initial downturn. By July, that gap had partially fallen back and 
was 4 percentage points.
    The uneven recovery is also evident when we focus on consumer 
spending at retail establishments. Between February and April 2020, 
overall retail sales sank 22 percent before quickly recovering to their 
pre-pandemic level just a few months later. As people began social 
distancing, spending shifted to at-home consumption, benefiting 
businesses like online retailers, grocery stores, and suppliers of 
building and garden materials. Indeed, spending on total retail sales 
has averaged 16 percent higher than its pre-pandemic level so far this 
year. At the same time, some categories of retail sales were severely 
depressed until showing signs of recovery in March of this year; those 
include in-person dining and spending on clothes, electronics, and 
appliances.
    Overall, the pandemic continues to weigh on aggregate demand for 
goods and services. In addition, bottlenecks and supply shortages have 
created challenges for businesses to meet consumer demand for some 
products, particularly as consumer demand has shifted wildly. Also, the 
pace of hiring has not kept up with the pace of labor demand, as job 
matching has been held back by a number of factors described below.
    Those developments have led to a notable increase in inflation. 
Because prices fell in 2020, one-year changes from August 2020 to 
August 2021 overstate the increase in inflation since the pandemic 
began. Instead, focusing on the annualized rate of inflation since 
February 2020 shows that inflation through August 2021 (as measured by 
the core consumer price index) was 3.1 percent, substantially lower 
than the one-year trend but still higher than any annual increase since 
the early 1990s.
    There are two primary reasons why the rise in inflation is unlikely 
to persist. First, the significant shifts in demand and bottlenecks are 
a function of the recent, temporary pace of economic activity. For 
example, demand for automobiles recovered quickly during the pandemic 
to high levels even as production was curtailed, in part due to 
disruptions in the supply chain for critical semiconductors. The result 
has been a sharp increase in prices for new and used vehicles. Second, 
as production is increased (with normalization of global supply chains) 
and growth in demand abates, inflation should slow overall.
    Nonetheless, certain factors will continue to create inflationary 
pressure; even with the slowdown, economic activity over the next year 
or so will continue to exceed the sustainable level. We might also see 
price spikes in certain services as demand shifts. For example, from 
March 2021 through July sales at restaurants were up 14 percent while 
sales at building materials and garden stores were down 11 percent. 
Such changes could lead to price surges at restaurants that more than 
offset softer prices at stores selling building materials and garden 
supplies. In addition, the rapid rise we have seen in home prices will 
likely translate into significantly higher rental costs across the 
country.
                           Federal Investment
    One way that fiscal policy can boost potential output is through 
increases in federal investment. Both the Office of Management and 
Budget (OMB) and CBO define ``federal investment'' as federal outlays 
on physical infrastructure, research and development, and education and 
training. The economic literature tightly ties spending in those areas 
to future economic growth. To be sure, other types of spending may 
deliver that result as well--such as spending that improves health-care 
outcomes and nutrition. However, in contrast to the three categories we 
define as federal investment, those types of services also have 
significant effects at the same time as when the spending takes place--
and the more narrow working definition of federal investment is a good 
starting point.
    Investments in physical infrastructure, research and development, 
and education and training produce social benefits beyond those that 
could be captured by a private investor. For example, it is generally 
difficult for a private entity to capture the economic rewards from 
investment in basic research and development--which often adds to the 
overall body of knowledge in a field. As a result, firms may be 
reluctant to undertake this type of work. When the federal government 
supports such research, it can create enormous social benefits and 
improve economywide productivity for decades to come. Federal 
investment in high-quality childcare increases the earning potential 
for affected children long into the future and it lowers the cost of 
working for parents of young children and thus increases the potential 
supply of labor. Those positive economic effects are recognized in 
several legislative proposals currently before Congress.
    As figure A-2 shows, as a share of GDP the federal government's 
investment (limited to such spending that is not for national defense) 
has been notably lower since 1980 than it was in prior years--even 
during years after enactment of the American Recovery and Reinvestment 
Act of 2009, which boosted federal investment in large part through an 
increase in federal grants to state and local governments. That 
shortfall has been driven by a reduction in federal investment in 
physical infrastructure as a share of GDP. In fact, in 2019 federal 
investment in physical infrastructure as a share of GDP was at its 
lowest level since the mid-1950s, when President Eisenhower increased 
such spending by signing the Federal-Aid Highway Act into law.
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    The reduction in federal investment as a share of GDP is important 
for productivity over the long term. In 2016, CBO published a brief 
summary of the literature describing the economic effects of federal 
investment. The best evidence of those effects is found in the link 
between physical public capital and real GDP growth. Using that 
evidence, ``CBO estimates that an increase in public investment that 
increases public capital by 1 percent boosts private-sector output by 
about 0.06 percent in the long term, on average'' (CBO 2016).\1\ That 
0.06 elasticity implies that a $100 increase in public capital boosts 
GDP in the long run by $8 every year, using the size of the public 
capital stock relative to output to translate the elasticity to a per-
dollar effect.
---------------------------------------------------------------------------
    \1\ The relationship between the increase in output and investment 
implies an elasticity of 0.06. CBO puts that estimate in context of its 
literature, finding, ``Research that estimates the effect on output of 
a particular kind of investment in physical capital, highway spending, 
similarly suggests that the elasticity ranges from 0.04 to 0.09'' (CBO 
2016).
---------------------------------------------------------------------------
    Unequivocally, that evidence suggests that an increase in federal 
investment--all else equal--leads to higher economic output in the long 
term. The corollary is that the lack of investment in infrastructure in 
recent years has reduced the economy's potential.
    However, this does not mean that a $100 increase in federal 
investment leads immediately to an $8 increase in output from higher 
productivity. First, public infrastructure takes time to put into 
place. CBO estimated that, for an illustrative policy that would boost 
federal investment by $500 billion, roughly one-third of the money 
would be outlaid within the first five years, roughly another half in 
the next five years, and the remaining amounts in future years (CBO 
2016). Moreover, for large-scale physical infrastructure projects 
requiring extensive designing, permitting, and construction, the timing 
can be longer.
    Second, once the federal investment is put in place, it takes time 
for the economy to respond fully. This is clearly true in the case of 
research and development and early childhood education. But even 
physical infrastructure--a new airport, for example--does not achieve 
its full benefits to society immediately.
    Finally, public capital, just like private capital, depreciates and 
requires service and maintenance to continue to be productive. Without 
such upkeep, the increase in GDP from the initial $100 in public 
investment is smaller over time.
    Given the current economic projection, the slowness in outlays that 
is inherent to federal investment is a benefit. The level of economic 
activity is on track to be quite strong--and to exceed its sustainable 
level--over the next couple of years. That activity will include a high 
level of demand for private sector resources--such as building supplies 
and construction workers. Since federal investment competes for those 
resources, the slower pace of federal infrastructure spending will be 
less likely to cause shortages, bottlenecks, and unwanted inflation.
1. In the second quarter of 2021, GDP returned to its pre-pandemic 
        level.
    Since the economy hit bottom in the second quarter of 2020, 
economic growth has surpassed consensus expectations formed at the 
beginning of the pandemic. As a result, in the second quarter of 2021 
real GDP exceeded its pre-pandemic level. With economic growth boosted 
by the ongoing effects of the fiscal support enacted by Congress in 
2020 and 2021, pent-up demand from consumers for face-to-face services, 
and the strength in labor markets and asset prices, real GDP appears on 
track to grow at the rapid pace of roughly 6 percent in 2021. To be 
sure, the Delta variant threatens that projection. However, even in the 
initial stages of the pandemic, when people had far less information 
and fewer mitigation resources, consumer spending and overall economic 
activity was remarkably resilient.
    The surprising strength in GDP and the improvements in expectations 
are evident from CBO's upward revisions to its projections (shown in 
figure 1). In the third quarter of 2020 the level of GDP was 4.8 
percent above the projection that CBO published at the beginning of 
that quarter. Moreover, since July 2020 CBO has revised up projected 
GDP for 2023 by nearly 7 percent, where the projected level of GDP at 
the end of 2023 is now 2 percent above CBO's pre-pandemic forecast. 
Nonetheless, through 2023 the cumulative shortfall in real output 
relative to a pre-pandemic projection is expected to total about $400 
billion in 2012 dollars (CBO 2020a, 2021c). Note that CBO's projections 
show a soft landing, with real GDP showing only modest growth by late 
2022. The slowdown could be more abrupt and painful than those 
projections suggest.
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2. The sharp decline in employment in spring 2020, which was largely 
        concentrated in the services sector, has only partially 
        reversed.
    Figure 2 shows the percent difference in overall employment from 
the peak month prior to recent economic downturns through the month 
where employment recovered to its previous business cycle peak. Across 
the labor market, employment is still down 5.3 million from February 
2020 and down about 9 million from where trends in employment were 
headed to prior to the pandemic.
    From February to April of 2020, employment declines in the leisure 
and hospitality sector accounted for about 40 percent of the total 22 
million jobs that were lost. Conversely, a partial recovery in that 
sector has fueled employment growth since then. Overall, from February 
through July of this year, monthly employment rose by more than 700,000 
on average. In August that pace slowed significantly, however. The 
resurgence of the pandemic likely held back the recovery in the leisure 
and hospitality sector, which saw no net gain in employment in August. 
In that sector, employment is still down 1.7 million jobs from February 
2020.
    In comparison to previous recessions, the COVID-19 recession has 
been worse for the services sector relative to the goods sector. 
Consider the average outcomes across the four recessions from 1981 to 
2019, 18 months from when the different recessions began: employment in 
the service sector was 1 percent below its pre-recession peak and 
employment in the goods sector was 10 percent below its peak. In 
contrast, as of August 2021 employment in the service sector was still 
4 percent below its February 2020 level and employment in the goods 
sector was 3 percent below.
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3. Millions of workers are no longer eligible for Unemployment 
        Insurance.
    Over the summer of 2021 in some states, and in the first week of 
September 2021 in the remainder of states, enhanced UI expired. That 
set of policies had significantly expanded eligibility to workers not 
covered by regular UI (Pandemic Unemployment Assistance [PUA]), 
extended the number of weeks that a worker could receive UI (Pandemic 
Emergency Unemployment Compensation [PEUC]), and increased the 
generosity of benefits (Federal Pandemic Unemployment Compensation 
[FPUC]). Prior to the CARES Act, which created PUA, PEUC, and FPUC, 
only 30 percent of workers were eligible for unemployment compensation.
    Figure 3 shows the total number of unemployed workers superimposed 
over weekly continued UI claims for regular UI benefits and Extended 
Benefits, which automatically extends weeks of eligibility based on a 
state's economic conditions, as well as claims for emergency programs: 
PUA and PEUC.
    Note that the level of unemployment greatly underestimates the 
number of people who lost jobs during the pandemic. To be described as 
officially unemployed, a person must be actively looking for work; 
however, millions of people effectively have left the labor force since 
March 2020 but were eligible for the expanded UI benefits. At the time 
that the emergency programs expired, there was a gap of more than 5.5 
million workers who were in the labor market and unemployed, but not 
receiving UI. We project that gap to close only modestly through the 
end of this year.
    Fiscal support has helped people prioritize their health over labor 
market income, which was certainly one of the goals when the support 
was put in place in the spring of 2020 and when it was reauthorized 
several times. Preliminary analysis suggests that UI generosity had a 
modest effect on recipients' job-finding rates (Petrosky-Nadeau and 
Valletta 2021). Nonetheless, we see no compelling evidence that the 
cancellation of those benefits so far has led to significant increases 
in aggregate employment (Coombs et al. 2021; Pardue 2021). On the other 
hand, the abrupt elimination of access to UI benefits for millions of 
people creates financial hardship for those who are unable to work 
owing to health risks or other constraints.
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4. The number of job openings and the number of workers quitting their 
        jobs is higher now than in the past 20 years.
    Despite job openings being their highest since the end of 2000 (the 
earliest available data), several factors are holding down employment 
gains. One factor is that the share of workers quitting jobs each month 
is at a series high. As figure 4 shows, the quit rate generally moves 
with the job opening rate, since workers are more likely to switch jobs 
in a strong labor market. Moreover, in the current environment the 
composition of labor demand is changing, and workers may be taking time 
to move from temporary jobs they took during the pandemic. Taken 
together, record job openings, the slowness of job matching, and the 
depressed level of labor force participation has created wage pressure, 
particularly for workers in the service sector, for younger workers, 
and for workers with less formal education.
    In addition to the depressed rate of job matching, also worrying is 
the lack of recovery in the labor force participation rate, which is 
the share of the population working or actively seeking work. That rate 
fell from 63 percent to 60 percent between February and April of last 
year, when nearly 8 million workers left the labor force. The 
participation rate recovered about halfway by June 2020, but has 
remained stubbornly depressed since then.
    Factors unique to the pandemic have disproportionately affected 
labor force participation among certain groups even if these changes do 
not meaningfully affect aggregate levels (Furman, Kearney, and Powell 
2021). For example, among mothers of elementary school-aged children--
which is the demographic likely bearing the brunt of school closures 
(Amuedo-Dorantes et al. 2020)--the share that is employed fell more 
than that of mothers who did not have children in elementary school 
(Bauer, Dube, et al. 2021). Consequently, addressing the child-care 
crisis moves in the right direction but will not on its own make up the 
ground that has been lost in aggregate labor force participation.
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5. Even with recent jumps in inflation, lower income workers are seeing 
        increases in real wages.
    Upward pressure on wages has been good news, particularly for low-
income workers and workers in certain industries. As shown in figure 5, 
wages for those in the bottom quartile of the wage distribution are up 
7.0 percent from their pre-pandemic level, or 4.6 percent at an annual 
rate. That rate of growth is close to what that group experienced in 
2019, when the consensus held that the labor market was relatively 
tight. Some sectors have seen particularly strong wage gains. For 
example, over the past 12 months average hourly earnings in the leisure 
and hospitality sector have grown nearly twice as fast as the overall 
private industry average. Other sectors seeing strong gains in hourly 
earnings include retail trade, transportation and warehousing, and 
financial activities.
    Because of recent increases in the rate of inflation, workers' 
purchasing power is not rising as fast as nominal wages. Price 
increases in recent months led to declines in real wages from March to 
June 2021. Those declines partly offset increases in real wages earlier 
in the pandemic for wage-earners in the bottom quartile, when inflation 
was soft and nominal wages were rising. In July and August real wages 
for that group notably accelerated. Overall, from February 2020 to 
August 2021 real wages for the bottom quartile have risen 2.4 percent, 
or 1.6 percent at an annual rate. That is considerably below the rate 
we saw in 2019 when real wage growth was 2.4 percent at an annual rate 
for the bottom quartile. Moreover, real wages are roughly unchanged for 
those in the highest quartile, in contrast to a gain of 0.8 percent in 
2019.
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6. Post-pandemic, income after government taxes and transfers, as well 
        as household saving, have been above their recent trends.
    Disposable personal income (DPI, or total aftertax income) in 2020 
and so far in 2021 has been higher than if DPI had simply grown at its 
trend rate of the previous five years. In aggregate, DPI has so far 
been higher than trend by a total of $1.4 trillion since the start of 
the pandemic.
    In 2020 weak aggregate compensation of employees was more than 
offset by a sharp increase in government benefits, leaving total DPI a 
cumulative $630 billion above its trend level over the course of that 
year (figure 6). As a result of additional dispensation of government 
social benefits to households in January and March of this year, DPI 
has been higher, on average, by about $115 billion each month since 
January than if it had grown at its trend pace. Since March of this 
year those benefits have come down sharply but remain elevated. Under 
current law, the boost to DPI should fully wane by early next year. 
(See Alcala Kovalski et al. 2021 for related information about the 
waning fiscal support.)
    As a result of the significant boosts to DPI and restrained 
services spending during the pandemic, aggregate household saving has 
skyrocketed. In every month from March 2020 through April of this year, 
the rate of saving was higher than in the past four decades; in some 
months it was roughly double the previous post-World War II peak. In 
total, households have roughly $2.5 trillion more in savings than if 
DPI and spending had grown in line with trend rates in the five years 
prior to the pandemic. Moreover, home prices and stock market prices 
have surged, leading to large increases in household wealth. Those 
resources will help to finance the pent-up demand for forgone spending. 
Ultimately, households will view the increase in savings and wealth as 
financial resources to support long-term, relatively steady consumer 
spending.
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7. Fiscal support led to a reduction in poverty in 2020.
    By the Official Poverty Measure (OPM), poverty increased from 10.5 
percent to 11.4 percent from 2019 to 2020. After taking into account 
the enormous fiscal support provided to households in 2020, the 
percentage of the US population in poverty, as measured by the 
Supplemental Poverty Measure (SPM), fell from 12 percent to 9 percent 
(figure 7). While poverty as measured by the SPM is typically lower 
than OPM for children, 2020 was the first time that SPM was lower than 
the OPM overall.
    The two policies that had the most significant effects relative to 
earlier years, because they were the most changed from prior policy, 
were the expansion of unemployment compensation and checks to 
households. If Congress had not enacted relief for families, SPM 
poverty would have risen to 12.7 percent rather than falling to 9.1 
percent.
    Another factor behind the decrease in poverty was the relatively 
strong wage growth for those at the bottom of the income distribution 
who remained employed (see fact 5). Notably, those wage gains came on 
the heels of strong wage growth in 2018 and 2019, when the tight labor 
market benefited lower-wage workers.
    In 2021 continued fiscal support--particularly the full 
refundability of and the increase in the child tax credit and increases 
to the Supplemental Nutrition Assistance Program (SNAP) maximum 
benefit--as well as the continued labor market recovery should help to 
lift households out of poverty. Sustained progress in reducing post-
tax-and-transfer poverty as measured in the SPM is possible through 
making permanent some of the policies enacted to counter the COVID-19 
recession.
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8. To date, 36 states have made progress in catching up on delinquent 
        rent and mortgage payments.
    To help Americans struggling to make mortgage and rent payments in 
the midst of a sharp contraction in labor income in the spring of 2020, 
policymakers put in place several relief programs. Those programs 
initially took the form of foreclosure and eviction moratoria and later 
also included financial support.
    Delinquent mortgage borrowers experiencing economic hardships 
related to the pandemic, who had a federally backed mortgage, which 
includes mortgages backed by Federal Housing Administration, Veterans 
Administration, Fannie Mae, and Freddie Mac loans, were automatically 
eligible for forbearance through September 30, 2021. The government put 
in place help for mortgage servicers who are generally required to make 
payments to investors regardless of whether borrowers are delinquent. 
According to the Federal Reserve Bank of New York, forbearance plans 
disproportionately benefitted low-income borrowers, especially those 
holding FHA-insured loans and those living in disadvantaged 
neighborhoods (Haughwout, Lee, Scally, and van der Klaauw 2021). In 
addition, Congress's American Rescue Plan provided nearly $10 billion 
to help homeowners who were behind on their mortgage and utility 
payments.
    The federal eviction moratorium expired in August 2021, although 
some states have extended such protections. The federal government has 
allocated $46.5 billion in relief to help renters make their back 
payments and to help landlords who are owed those payments. State and 
local grantees had provided only $5.1 billion of the first $25 billion 
allocated for emergency rental assistance through July 2021 and news 
reports (Siegel 2021) suggest distribution of aid continues to be slow, 
even with recent US Department of the Treasury (2021) guidance to 
expedite delivery. With regard to the money that was distributed in the 
first quarter of 2021, more than 60 percent of households who received 
aid had household incomes under 30 percent of typical incomes in their 
geographic area.
    Nonetheless, the broader fiscal support and the partial recovery in 
the labor market has helped to reduce the number of people who are 
behind on their payments. Figure 8 shows how much progress has been 
made in getting caught up on rent or mortgage payments by state, from 
each state's peak to the most recent data spanning July and August. 
Three-quarters of the states reached their highest share of missed rent 
or mortgage between December 2020 and March 2021. Since peaking, the 
share of residents who reported missing rent or mortgage payments is 
lower in 36 states by statistically significant amounts.
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9. The strength in durable goods spending and weakness in spending on 
        consumer services stands in sharp contrast to previous 
        recoveries.
    Together, social distancing and substantial support to households 
led to a surge in spending on durable goods even as households 
curtailed spending on services--a dramatic departure from behavior in 
more-typical recessions. As shown in figure 9a, overall real spending 
on goods initially sank 13 percent from February to April of 2020, but 
then quickly rose and had exceeded its pre-pandemic level by June. This 
rise included purchases such as vehicles, household furniture, and 
recreational equipment; after adjusting for inflation, so far in 2021 
purchases of those durable goods have averaged 25 percent higher than 
pre-pandemic spending. In contrast, spending on services--many of those 
being face-to-face transactions such as live entertainment and dining 
at restaurants--fell steeply during the pandemic. Real services 
spending dropped more than 20 percent in the spring of 2020 and has yet 
to recover to pre-pandemic levels.
    These patterns diverge from prior recessions. In most prior 
recessions, spending on durable goods remains subdued for an extended 
period, as in the case of the Great Recession where 18 months into the 
recovery, goods expenditures remained 7 percent below the pre-recession 
peak. In addition, figure 9b shows that, in each of the prior three 
recessions, spending on services temporarily plateaued in the first 
year of recovery before resuming growth. But in none of these prior 
recessions did services dip below their pre-recession levels for any 
sustained period--another sign of the uniqueness of the COVID-19 
recession.
    In recent months, demand has begun shifting back toward services as 
people begin resuming normal activities. From March to July, goods 
purchases declined moderately, while spending on services climbed 3 
percent; notably, spending on live entertainment, hotels, and public 
transportation collectively increased by 35 percent over those four 
months.
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10. Retail inventories are unsustainably low.
    Through August 2021, much of the consumer demand for goods has been 
met by drawdowns of inventory. As shown in figure 10, the retail 
inventory-to-sales ratio spiked at the beginning of the pandemic when 
spending plummeted. Since then, however, the ratio has fallen 
precipitously. This is particularly true for the automotive sector, 
where shortages of semiconductors have constrained production. Even 
outside of that sector, production has been insufficient to keep up 
with demand. Indeed, unfilled orders and delivery times are elevated 
across the manufacturing sector. Disruptions in global supply chains 
have been a continuing obstacle, in particular backlogs at ports that 
have increased the cost of shipping to historic highs.
    On the one hand, capacity utilization in the manufacturing sector 
has recovered close to its pre-pandemic level. On the other hand, 
historical patterns and recent surveys of manufacturers suggest that 
they will increase utilization well beyond that level to replenish 
inventories as demand recovers.
    In addition to investment in inventories, survey data suggest that 
investment to expand capacity and productivity is poised to increase. 
Private investment in equipment and structures has partially rebounded 
since the second quarter of 2020 but has not yet returned to pre-
pandemic trends. As of the first quarter of 2021, investment in 
business equipment had rebounded as a share of potential output, but 
additional investment is required to make up for lost investment during 
the pandemic. A rebound in investment in structures is more than 
accounted for by investment in residential structures; in fact, 
investment in residential structures as a share of output is back to 
levels not seen since 2007. Nonresidential structure investment, 
however, is still down as a share of potential output.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


11. There were more new business applications and fewer bankruptcies in 
        2020 and 2021 than in 2018 and 2019.
    Newly created businesses appear to be a major source of production 
of the goods and services that households are demanding. Figure 11a 
shows new business applications of firms that the Census Bureau 
characterizes as having a high propensity to employ workers. Since the 
summer of 2020, we have seen the highest level of applications since 
the agency began to track the series in 2004. Applications have perhaps 
reflected new business opportunities in the wake of the pandemic. The 
prospective new businesses are concentrated in online retail, which 
makes up a third of the increase in total new applications, and in 
service sector industries, which suffered some of the largest 
employment losses early last year (Haltiwanger 2021).
    In the past year and a half, fewer firms have failed than initially 
feared, due in part to fiscal support like the Paycheck Protection 
Program that offered forgivable loans to small- and medium-sized 
businesses. Figure 11b compares cumulative commercial bankruptcies for 
the past four years. The full year 2020 ended with 17 percent fewer 
bankruptcies than in 2019, while 2021 is currently on track to record 
the fewest commercial bankruptcy filings since at least 2012 (when the 
data became available). More specifically, Chapter 7 filings and 
Chapter 13 filings, which represent asset liquidation and those of sole 
proprietorships, were 16 percent and 45 percent lower in 2020 than 
2019, respectively. In contrast, Chapter 11 filings, which historically 
have reflected the reorganizations of large firms, jumped 29 percent in 
2020. That increase also likely reflects legislation enacted in 
February 2020 and then expanded under the CARES Act, which offered 
smaller businesses the ability to reorganize under Chapter 11 and thus 
remain viable.
    Although the business sector appears to have done well overall, 
some acutely affected sectors have seen more closures. For example, 
early evidence shows an elevated rate of exits for heavily COVID-
affected businesses, such as barber shops and hair salons (Crane et al. 
2021).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


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    Mr. DeFazio. Mr. Regan.
    Mr. Regan. Good morning. Thank you, Chairman, thank you, 
Ranking Member Graves, for having me here today. I speak on 
behalf of 33 unions who represent America's frontline 
transportation workforce.
    You know these workers. You see them every day, building 
our roads, driving our buses, flying our planes, moving our 
freight, and connecting our communities.
    Frontline transportation workers are and always have been 
essential. The COVID-19 pandemic has put renewed light on what 
that really means.
    During the darkest days of the pandemic, these dedicated 
professionals never had the luxury of working from home. Often 
they were forced to do their jobs without adequate safety 
protections, like face masks, social distancing, and other PPE.
    As a result, tens of thousands became ill, scores had to be 
hospitalized, and tragically workers across all modes lost 
their lives to the virus.
    Despite the risks they face, transportation workers 
reported for duty and helped see us through this crisis. 
Because of their efforts, hospitals had the critical supplies 
they needed, healthcare and other essential workers made it to 
their jobs on the front lines of the pandemic, and the vaccine 
has been distributed to every corner of our country.
    These efforts were possible because of the dedication of 
transportation workers, and also because of your support. 
Congress provided nearly $200 billion to transit agencies, 
airlines, Amtrak, State departments of transportation, 
schoolbus operators, and motorcoaches to keep these systems 
open and workers on the job.
    The majority of this aid was included in bipartisan 
packages that nearly every member of this committee supported. 
On behalf of TTD and our affiliated unions, I thank you for 
delivering the Federal aid needed to respond to this crisis.
    In our domestic aviation industry, for example, passenger 
volume dropped 96 percent, and U.S. carriers recorded massive 
losses in 2020. The economic damage that could have stemmed 
from the collapse of this industry would have been 
catastrophic.
    However, Congress' provision of three rounds of the Payroll 
Support Program saved thousands of jobs, prevented carriers 
from entering bankruptcy, guaranteed that airlines remain 
capable of transporting essential workers and eventually 
vaccines, and ensured that this industry would be prepared to 
respond and recover as demand returned.
    I want to thank Chairman DeFazio, in particular, for his 
efforts in creating and championing this program.
    Similarly, in the early days of the pandemic, Amtrak lost 
its ridership overnight. A shocking 97-percent drop in 
passengers translated into an unsustainable decrease in 
operating revenues.
    Without the Federal Government's support, Amtrak, its 
passengers, the communities it serves, and its workforce would 
have faced devastating losses.
    However, three rounds of financial support with improving 
labor protections, resulted in the recall of all furloughed 
employees, the return of suspended, long-distance services, and 
assurances that Amtrak would keep running through the worst of 
the pandemic.
    Public transportation was also devastated by this crisis. 
Many of those working on the front lines of the pandemic, 
including medical professionals, public safety workers, and 
other employees deemed vital to the continuance of our society 
and economy, relied on these services to get to their jobs.
    Unfortunately, COVID-19 placed an incredible strain on our 
ability to provide this public service to those who rely on it 
most. Across the three COVID relief bills, Congress provided 
nearly $70 billion to ensure the continued operation of our 
public transportation system.
    In order to accept this funding, transit agencies across 
the country had to certify that they would not furlough 
workers. It is not an exaggeration to state that without this 
Federal support, the public transportation industry would have 
been utterly decimated, leaving all those who counted on it 
throughout the pandemic, in rural and urban communities alike, 
without the transportation access that they need.
    The keys to the success of all these investments were the 
strong labor protections and the focus on worker welfare. Most 
transportation workers and their families kept their health 
insurance and were never forced onto unemployment lines.
    Now, as we climb out of this pandemic, they are on the job, 
ready to grow our economy once again.
    While Congress and the Biden administration have taken 
historic steps to preserve jobs and save our transportation 
system, unmet challenges remain that still must be addressed.
    Frontline workers across all modes continue to face the 
serious and sometimes deadly threat of assaults for simply 
enforcing face mask and other safety mandates. This is 
especially true for workers in public transit, onboard Amtrak, 
and in aviation.
    These workers all have safety-sensitive jobs and should not 
be expected to perform them while under the threat of physical 
violence.
    The need to move a tremendous amount of cargo at U.S. ports 
placed longshore, shipbuilding, and other on-deck workers 
squarely in harm's way of the virus. Language in the revised 
HEROES Act and the American Rescue Plan temporarily revised the 
Longshore and Harbor Workers' Compensation Act to ensure that 
employees who have contracted COVID-19 on the job can collect 
workers' compensation benefits.
    Unfortunately, this was left out of the final bill, but it 
must be enacted while this virus still persists.
    As we move through the pandemic toward recovery, there is 
no doubt that our transportation system and the frontline 
workers who build, operate, and maintain it, will continue to 
play a vital role in ensuring our economy and our country come 
out of this crisis stronger and better than ever.
    Unfortunately, we are still not out from under the shadow 
of this virus, and until we are, we must continue our efforts 
to ensure the cooperation between working people, 
transportation entities, and lawmakers.
    Thank you again, and I look forward to your questions.
    [Mr. Regan's prepared statement follows:]

                                 
   Prepared Statement of Gregory R. Regan, President, Transportation 
                       Trades Department, AFL-CIO
    Good morning. Thank you, Chairman DeFazio and Ranking Member Graves 
for inviting me to testify before the Committee today.
    I speak today on behalf of 33 unions who collectively represent 
millions of frontline workers across every mode of transportation. You 
know these workers--you see them every day building our roads, driving 
our buses, flying our planes, moving our freight, and connecting our 
communities.
    Working people represented by TTD unions are pilots, flight 
attendants, air traffic controllers, mechanics, and transportation 
security officers. They are bus and subway operators, station agents 
and ticket handlers, freight rail conductors, food and beverage 
workers, ship captains, and port workers. They are building and 
repairing our roads and bridges. They are found in every corner of our 
country in cities both large and small, and together they power the 
most complex transportation system on earth.
    These workers are and always have been essential, but the COVID-19 
pandemic put a renewed light on what that actually means.
    During the darkest days of the pandemic, frontline transportation 
workers did not have the luxury of working from home. These skilled 
professionals reported for duty even when our government instructed 
other Americans to stay home. Often, these workers were forced to do 
their jobs without adequate safety protections like social distancing, 
face masks, and other critical PPE. As a result, they risked bringing 
the virus home to their families or contracting it themselves. Sadly, 
that's exactly what happened. Tens of thousands of transportation 
workers became ill from COVID-19. Scores had to be hospitalized, or 
stay home. Tragically, workers across all modes of transportation lost 
their lives because of this virus.
 Strong Federal Investments Saved Jobs, Lives, and our National Economy
    The pandemic greatly tested our transportation systems and our 
country. Federal aid and intervention have been the saving grace for 
transit, airlines, Amtrak, highway and bridge construction, and other 
modes of transportation over the past 19 months as Congress provided 
tens of billions of dollars in aid to transportation workers at transit 
agencies, airlines and airline contractors, Amtrak, school bus 
operators, state departments of transportation, motorcoaches, private 
transit providers and others.\1\ The vast majority of this aid was 
included in bipartisan packages that nearly every member of this 
committee supported. On behalf of TTD and our affiliate unions, I want 
to thank the members of this committee for all your work and support 
delivering federal aid to the transportation workforce in response to 
this crisis.
---------------------------------------------------------------------------
    \1\ Including but not limited to $69.4b for public transit, $63b 
for airline and airline contractor workers through the payroll support 
program, $3b for aviation manufacturing payroll support, $29b in 
additional aid to airlines through loans and loan guarantees, $4.7b for 
Amtrak, $2b through the Coronavirus Economic Relief for Transportation 
Services (CERTS) program directed to motorcoach, school bus, and other 
companies, and $10b for activities eligible under the Surface 
Transportation Block Grant Program. This funding came through the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act (March 27, 
2020), the Coronavirus Response and Relief Supplemental Appropriations 
Act (December 21, 2020), and the American Rescue Plan Act (March 11, 
2021).
---------------------------------------------------------------------------
    Importantly, Congress's bold investments in our transportation 
network came with an extraordinary focus on the welfare of its 
workforce. Many of you here today worked hard to ensure that all of the 
emergency federal investment in transportation came paired with some of 
the strongest worker protections ever included in a response and relief 
bill. Airlines and airline contractors were not allowed to 
involuntarily furlough their workers or diminish wages under the 
payroll support program.\2\ Transit agencies had to certify that they 
hadn't furloughed any workers.\3\ And Amtrak was directed to prevent 
furloughs, ultimately return furloughed workers to the front lines, and 
restore suspended services.\4\ The benefits of this approach have been 
apparent from the beginning. Many workers and their families kept their 
health insurance--which is essential during a public health crisis--and 
were never forced onto unemployment insurance. And now, as we are 
climbing out of the pandemic, they are already on the job ready to grow 
our economy again. That would not have been possible without your 
support.
---------------------------------------------------------------------------
    \2\ P.L. 116-136 Section 4114; P.L. 116-260 Section 404; P.L. 117-2 
Section 7301
    \3\ P.L. 116-260 Division M Title IV--Federal Transit 
Administration; P.L. 117-2 Section 3401
    \4\ PL. 116-260 Division M Section 401
---------------------------------------------------------------------------
Aviation
    The domestic aviation industry was deeply affected by the pandemic, 
with passenger volumes initially dropping by 96%. As a result, U.S. 
carriers would go on to record massive losses in 2020, as revenue 
dropped by 62% compared to the year prior.\5\ The economic damage that 
could have stemmed from the collapse of the industry in light of these 
conditions would have been catastrophic.
---------------------------------------------------------------------------
    \5\ https://www.bts.gov/newsroom/preliminary-air-traffic-data-
april-2020-96-reduction-us-airline-passengers-2019
---------------------------------------------------------------------------
    However, Congress's provision of three rounds of the Payroll 
Support Program (PSP) prevented the loss of hundreds of thousands of 
jobs, including pilots, flight attendants, mechanics, ground crew, 
baggage handlers, customer service agents, and others. It prevented 
carriers from entering bankruptcy, guaranteeing that airlines remained 
capable of fulfilling immediate needs like transporting essential 
workers and eventually vaccines, and ensured that the aviation industry 
would be prepared to respond and recover as demand returned. We owe our 
strongest thanks to Chairman DeFazio for the creation of the program 
and for his steadfast support through each iteration.
    Critically, the PSP was engineered as an employee-first program, 
whose funding exclusively covered employee payroll and benefits and 
prevented involuntary furloughs, all without inviting federal 
interference in collective bargaining relationships at U.S. airlines. 
This stands in stark contrast to previous airline assistance programs 
that provided no such assurances to workers, and resulted in massive 
losses in wages and benefits, to the benefit of carriers. The 
deployment of the program, and its two extensions, is responsible for 
avoiding both large-scale furloughs and loss of benefits during a 
global pandemic. As a result, the vast majority of airline employees 
pre-pandemic remain in the industry, with collectively bargained 
benefits intact. In fact, total airline employment, per the most 
recently reported data, has surpassed pandemic lows as several carriers 
have announced hiring for certain positions.\6\ While the pandemic and 
its effects are certainly not over, this is a welcome sign. However, if 
the PSP had not been extended at any stage, this would assuredly not be 
the case, and we would be faced with a decimated airline industry and 
untold thousands of displaced aviation workers.
---------------------------------------------------------------------------
    \6\ DOT Form 41, Schedule P-1(a), as of 9/29/21
---------------------------------------------------------------------------
    In addition to the airline PSP program, the American Rescue Plan 
also included a PSP-like Aviation Manufacturing Jobs Protection 
program, designed to support aviation industry manufacturers in 
response to reduced demand for new aircraft and fewer aircraft in 
operation. TTD was strongly supportive of the program and appreciated 
Congress' acknowledgment of this critical role of the airline 
manufacturing sector and its employees.
Maritime
    The U.S. Maritime Industry has continued to be an invaluable part 
of our national economic security and sealift capability. The pandemic 
has greatly impacted the various functions in the industry and just 
like other transportation modes, expenses have increased due to COVID-
19 protocols put in place to ensure the health and safety of crews and 
to keep supply chains open. In addition, there has been a high demand 
for container shipping and maritime labor and U.S. Flag shipping 
companies have been working together to ensure that our nation's 
shelves remain well-stocked. However, there has not been any dedicated 
federal assistance provided for the maritime transportation system in 
any of the COVID relief packages passed by Congress.
    We thank Chairman DeFazio and the committee for their work on the 
Maritime Transportation System Emergency Relief Authority (MTSERA) 
program, which aims to provide comprehensive maritime emergency relief 
to the U.S. Maritime Administration and stabilizes the reliable 
function of the Marine Transportation System in any national emergency 
disaster or public health emergency. MTSERA was authorized in the FY 
2021 National Defense Authorization Act for the first time last year, 
and we call for full support of the program in the appropriations 
process going forward.
Passenger Rail
    In the early days of the pandemic, Amtrak lost its ridership nearly 
overnight. A shocking 97% drop in ridership ultimately translated into 
a 31.9% decrease in operating revenues for Amtrak over the course of FY 
'20.\7\ While ridership is beginning to recover, the financial losses 
that Amtrak stood to incur without the support of the federal 
government would have had disastrous consequences for passengers, 
communities, and the Amtrak workforce.
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    \7\ https://www.amtrak.com/content/dam/projects/dotcom/english/
public/documents/corporate/businessplanning/Amtrak-Service-Line-Asset-
Line-Plans-FY21-26.pdf
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    As the pandemic took hold in early 2020, Congress stabilized the 
carrier with an infusion of approximately $1 billion via the CARES Act. 
However, upon the exhaustion of these funds, the impact of COVID on 
Amtrak became clear as it made damaging changes to its workforce and 
service beginning on October 1, 2020. Amtrak laid off approximately 
2,500 workers and suspended daily service on almost all of its long-
distance routes. Further assistance in the Coronavirus Response and 
Relief Supplemental Appropriations Act of 2021 prevented Amtrak from 
laying off additional employees or contracting the work of furloughed 
employees, and the final round of support in the American Rescue Plan 
crucially provided for the recall of all furloughed employees and the 
restarting of daily service on the National Network. TTD strongly 
supported this aid and the increasing degree of protection for workers 
in these bills.
    Without this support, October 1st would have been only the 
beginning, as Amtrak would have furloughed additional thousands of 
employees as ridership remained well below historic levels. Amtrak 
likely would have further reduced or even eliminated services, causing 
rural communities across the nation to lose access to reliable 
passenger rail. Not only would this have been immensely harmful to 
workers and passengers at the time, but the loss of skilled Amtrak 
employees and the costs associated with restarting dormant service 
would have delayed Amtrak's recovery. While Amtrak is not clear of the 
impacts of the pandemic as some travel has been slow to recover, 
Congress's assistance was essential to its survival and continued 
operations over the last eighteen months.
Public Transportation
    Throughout the COVID pandemic, millions of Americans relied on 
public transportation services, including buses, subways, light- and 
commuter rail, and ferries, as their only source of transportation to 
their jobs, food, and other critical services. Many of those people 
were working on the front lines of the pandemic, including medical 
professionals, public safety workers, and other employees deemed vital 
to the continuance of our society and economy. Unfortunately, the 
direct costs and revenue losses resulting from the impacts of COVID-19 
placed an incredible strain on our ability to provide this public 
service to those who rely on it the most.
    Across the three COVID relief bills, Congress provided $69.4b to 
ensure the continued operations of our public transportation systems. 
It is not an exaggeration to state that, without this federal support, 
the public transportation industry would have been utterly decimated, 
leaving all those who have counted on it throughout the pandemic 
without transportation access in rural and urban communities alike.
    Moreover, the flexibility provided to public transportation systems 
to use federal assistance for operating funds and the strong labor 
protections tied to that federal assistance to guarantee continuance of 
payroll received top priority, and ensured that workers were kept on 
the job and that our recovery was not further and arbitrarily hampered 
by the need to restart this major component of our national 
transportation system.
State and local funding, and support for federal employees
    The cumulative impact of the pandemic's halt on commerce and 
transportation services hit state and local budgets hard. Without the 
usual vehicle ridership and the accompanying revenue from sales taxes, 
gas taxes, fare box collection, and tolling, communities struggled to 
maintain the critical transportation services that moved essential 
workers to their jobs and connected patients to care. According to the 
American Association of State Highway and Transportation Officials 
(AASHTO), state departments of transportation will suffer a $28 billion 
loss in state transportation revenues through fiscal year 2024.\8\
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    \8\ https://policy.transportation.org/wp-content/uploads/sites/59/
2021/02/AASHTO-Covid-Revenue-Analysis-2021-02-01.pdf
---------------------------------------------------------------------------
    While not fully covering the predicted revenue losses, Congress 
provided $10 billion in emergency aid to state departments of 
transportation in the Coronavirus Response and Relief Supplemental 
Appropriations Act of 2021 and offered broad flexibility--covering 
operations and personnel costs, allowing routine maintenance to 
continue, and filling in the gaps for localities so that when our 
economy did recover, the transportation network would be ready to move 
people and goods safely and efficiently. The economic rebound and 
commercial activity we have seen this year could not have been as 
expansive without this support.
    TTD also commends the inclusion of Emergency Leave Funds for 
federal employees in the American Rescue Plan, in particular the 
creation of a paid leave program for FAA employees and Transportation 
Security Officers. The ability to access paid leave when required to 
quarantine or care for a relative due to COVID-19 concerns has allowed 
these employees the necessary ability to balance health-care and 
employment responsibilities without fear of missing wages.
Other Transportation Sectors
    In addition to the modally targeted programs discussed above, a 
number of other sectors, including motor coach operators and school bus 
providers, have seen substantial losses and layoffs as travel ground to 
a halt and schools went remote. Over the course of the pandemic, the 
motor coach industry has shed nearly 85,000 employees alone. Seeking to 
address these and other struggling industries, Congress provided a 
needed $2 billion in the Coronavirus Response and Relief Supplemental 
Appropriations Act of 2021. While there was a substantial delay between 
enactment and implementation, we are encouraged that the Treasury has 
begun to issue grants from the program.\9\
---------------------------------------------------------------------------
    \9\ Coronavirus Economic Relief for Transportation Services (CERTS) 
program
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    With our transportation system moving freight, tourists, and 
commuters, and providing real wages and benefits for working families, 
the United States saw rapid economic growth in 2021.\10\ With federal 
assistance, transit agencies were able to maintain service and 
ridership has begun to stabilize, airline workers stood ready to meet 
rising tourism demand, and intercity passenger rail maintained service 
and connected rebounding economies.\11\ These strong investments in 
both transportation systems and their workers meant that consumers had 
places to go and the means to spend, and infrastructure projects could 
resume and make way for greater activity.\12\ Industries that did not 
receive direct federal assistance, such as freight rail and our ports 
of entry, were able to survive due to the downstream benefits of these 
investments.
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    \10\ https://www.oecd.org/economy/united-states-economic-snapshot/
    \11\ https://transitapp.com/apta
    \12\ https://www.nytimes.com/2021/07/29/business/economy/consumer-
spending-gdp.html
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    While these investments, paired with strong labor protections, and 
the lawmakers who supported them should be celebrated, there remain 
glaring failures of government and outstanding needs that must also be 
addressed.
                The Trump Administration Failed Workers
    At the very outset of the pandemic, workers pushed for strong, 
uniform protections from their federal government. Instead, the Trump 
administration chose to endanger workers by publishing little more than 
unenforceable, voluntary guidance to employers, while transportation 
workers were dying every day of COVID-19 infections they acquired on 
the job.
    When it became clear that the administration would not act on its 
own and that the patchwork of state, local, and other guidelines was 
inadequate, TTD filed a petition with the Department of Transportation 
requesting the absolute bare minimum--that passengers on our nation's 
transportation systems, including on airlines, bus, rail, and ferries, 
be required to wear masks.\13\ Gallingly, the Trump DOT rejected the 
petition.\14\ While we are grateful that the Department rightfully 
changed course under the Biden administration, we are unequivocal that 
the lack of meaningful federal action and standards directly resulted 
in unnecessary infections and deaths among transportation workers and 
their families, passengers, and members of the communities where those 
individuals lived and worked.
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    \13\ https://ttd.org/policy/federal-comments/ttd-petitions-dot-for-
passenger-face-mask-mandate/
    \14\ https://ttd.org/news-and-media/ttd-in-the-news/trump-
administration-rejected-a-mask-mandate-on-the-day-trump-was-
hospitalized-for-covid-19/
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          Great Needs Remain Across all Transportation Sectors
    While Congress and the Biden administration have taken historic 
steps to preserve jobs and save our transportation system, unmet 
challenges remain that must still be addressed.
Unconscionable assaults on transportation workers remain a serious 
        safety threat
    Frontline workers across all modes of transportation continue to 
face the serious, and sometimes deadly, threat of assaults simply for 
enforcing mask and other safety mandates.
    Transit workers have faced the threat of assault on the job for 
years. Throughout 2020, as ridership fell to historic lows, the number 
of assaults in these systems remained at roughly the same level as 
2019. Now that ridership is returning, assaults are on the rise. In New 
York City, for example, hundreds of transit workers have been harassed 
or assaulted for asking passengers to wear masks--and those are just 
the cases that have been reported. Similar savage attacks have been 
reported across the country, from Durham to Lubbock to San 
Francisco.\15\
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    \15\ https://www.thecity.nyc/2020/9/7/21426632/new-york-city-bus-
drivers-mask-rules-mta; https://www.wral.com/coronavirus/godurham-bus-
drivers-attacked-after-telling-riders-to-mask-up/19887910/; https://
www.star-telegram.com/news/coronavirus/article244316857.html; https://
abcnews.go.com/Health/wireStory/san-francisco-bus-driver-assaulted-bat-
mask-order-71980686
---------------------------------------------------------------------------
    We have also seen a significant increase in assaults in our 
airlines and on Amtrak. The FAA has received more than 4,385 reports of 
unruly passenger behavior and has launched formal investigations into 
789 of these cases--nearly quadruple the previous record number of such 
cases in a year and we are only in September.\16\ In a membership 
survey conducted by the Association of Flight Attendants-CWA, 85% of 
flight attendants reported dealing with an unruly passenger in the 
first half of 2021, and 17% reported a physical incident.\17\ Violent 
attacks on gate and customer service agents, flight attendants, and 
transportation security officers have become pervasive, threatening 
both the wellbeing of the employees and air safety.
---------------------------------------------------------------------------
    \16\ https://www.faa.gov/data_research/passengers_cargo/
unruly_passengers/
    \17\ Testimony of Sara Nelson, International President of the 
Association of Flight Attendants-CWA, House Transportation and 
Infrastructure Committee, September 23, 2021.
---------------------------------------------------------------------------
    At Amtrak, disorderly conduct incidents increased 29% in FY '21, 
and onboard service workers and conductors are reporting threats and 
unsafe behavior on trains regularly.\18\
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    \18\ Data provided by the Amtrak Police Department
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    Transportation workers all have safety-sensitive jobs that they 
cannot, and should not, be expected to perform while under the threat 
of physical violence. The increased threat of assault demands a federal 
response across all modes of transportation to protect the workforce, 
as well as passengers and other road, rail, and air users.
Maritime and Longshore
    The need to move the tremendous amount of cargo that arrives at 
U.S. ports and harbors necessitated that longshore workers, 
shipbuilders, and other on-dock workers across the nation continue to 
work in conditions where exposure to COVID-19 was possible if not 
likely. Recognizing the essential nature of these employees, the House 
of Representatives included language in both the revised HEROES Act and 
the American Rescue Plan that temporarily revised the Longshore and 
Harbor Workers' Compensation Act to ensure that covered employees who 
contracted COVID-19 on the job were able to collect worker's 
compensation benefits. Disappointingly, the provision was disallowed by 
the Senate Parliamentarian. In response, Education and Labor Chairman 
Bobby Scott and Representative Frank Mrvan introduced the stand-alone 
Longshore and Harbor Workers' COVID-19 Compensation Act of 2021. We 
thank Chairman Scott and Rep. Mrvan for their leadership and encourage 
support of the legislation.
    Congress should also be aware that the pandemic has exacerbated the 
processing of credentials and course approvals from the U.S. Coast 
Guard's merchant mariner credentialing program. These credentials are 
needed for Merchant Mariners to report to work but are often extremely 
delayed due to a number of ongoing health safety, technical, and 
staffing restraints. Unfortunately, the backlog is adversely affecting 
the ability of our unions to find crew members for ships and also 
limits the ability of workers to find work and advance their careers. 
Mariners will receive word they passed their exams, but they experience 
severe delays before they receive the credentials that allow them to 
get a job. This backlog must be resolved in order to maintain the 
employment levels needed to sustain the supply chain and provide 
essential goods, food, and equipment to folks across the country.
Rail
    Unlike most of the nation's employees, rail workers receive 
benefits such as unemployment payments through the Railroad Retirement 
Board, as opposed to state-run programs. As Congress created badly 
needed extended and enhanced UI benefits, it was forced to consider 
that, unlike regular UI, railroad unemployment benefits are unfairly 
subject to the effects of the sequester. As a result, rail workers were 
subject to an approximately 7% cut to their benefits at a time they 
could least afford it. The Coronavirus Response and Relief Supplemental 
Appropriations Act suspended the application of the sequester until 30 
days after a Presidential declaration to end the national emergency 
concerning the COVID-19 pandemic. While this common-sense fix was 
welcome, Congress must pursue avenues to permanently remove 
sequestration restrictions on the RRB.
Workers and our economic recovery will be damaged by government 
        shutdowns
    Finally, we must point out that all of the good work this and the 
previous Congress have done to help workers and shore up our economy in 
the wake of this global pandemic will be needlessly harmed if elected 
leaders fail to perform their most basic Constitutional responsibility 
of funding government operations. The shutdown imposed upon the 
American people by Congress in 2019 wreaked havoc on our transportation 
system, forced federal workers and contractors to stay at home or work 
without pay, and cost our economy billions of dollars that we will 
never get back. Know that we will not sit by idly while Congress uses 
our workers as a political pawn in a partisan squabble.
    Moreover, later today you will be asked to vote on a long-term 
reauthorization of our nation's surface transportation programs--the 
largest ever single investment in our infrastructure and one that is 
desperately needed and supported by your voters. While the 
Infrastructure Investment and Jobs Act may not tick every box on each 
of your wish lists, it is your duty to ensure we do not enter another 
period of short-term reauthorizations that do little more than create 
uncertainty, slow down construction, and harm our economic recovery.
                               Conclusion
    As we move through the pandemic toward recovery, there is no doubt 
our transportation system and the frontline workers who build, operate, 
and maintain it will continue to play a vital role in ensuring our 
country and economy come out of this crisis stronger and better than 
ever. Achieving those goals, however, will require additional 
cooperation between working people, transportation entities, and 
lawmakers. For starters, it must be understood that the programs I have 
outlined today will remain essential for months and years to come. We 
also cannot let our guard down: strong mandatory health and safety 
guidance will be central to keeping transportation workers safe and 
encouraging the return of passengers. Congress correctly intended for 
these programs to extend until the end of the pandemic. Working people 
and the traveling public are counting on that commitment for their 
safety and security.
    Thank you again for the opportunity to testify today and I look 
forward to your questions.

    Mr. DeFazio. Thank you, Mr. Regan, for your exactly 5-
minute testimony.
    I will begin with a question to direct to both Mr. 
Skoutelas and Mr. Regan because you both lead organizations 
that represent one heck of a lot of people--in terms of APTA, 
1,500 public- and private-sector member organizations, all 
modes of public transportation, and then Mr. Regan, TTD, an 
organization representing 33 unions who work across the 
transportation sector.
    And I guess I would just like you both to say, and if you 
can be brief, what was the most important part of the COVID 
Federal relief efforts and the impact they had, and where do 
you think your industries that you represent, or workers, would 
be today if we hadn't had that assistance?
    Mr. Skoutelas. Mr. Chairman, this is Paul Skoutelas. Let me 
address that if I may. First of all, the nearly immediate 
infusion of Federal aid that Congress approved for public 
transit was absolutely essential. It meant that services could 
continue, bus and rail services to communities, to essential 
workers, uninterrupted, and that was essential in terms of 
maintaining continuity and maintaining the vibrancy of not only 
getting people to their jobs, but continuing some level of 
economic activity.
    If those dollars were not forthcoming in the quick fashion 
that they were, we would have seen enormous dislocation, 
shutdown of entire systems, and that has been evidenced through 
the surveys that we have done.
    Going forward, this gives an opportunity for these agencies 
to stabilize their operations, continue to operate, and begin 
to plan for the future, and that is what is going on today.
    It also provided for a continuation of many of the capital 
investment programs that these agencies were undertaking. So it 
meant that the private sector would continue to employ people, 
to construct projects, which were in jeopardy if those funds 
were not available to them.
    So in all, it provided for stability, it provided for a 
future that they could plan for with some reasonable degree of 
certainty.
    Mr. Regan. I agree with what Paul said, and what he said 
remains true for aviation and Amtrak in addition to public 
transit.
    But to me, I think one of the most important parts of the 
relief was how it was directed toward workers. It made sure 
that we were not furloughing people, we weren't ever getting 
collective bargaining agreements. We were making sure that 
people retained their credentials, to make sure they were 
trained and up to speed and able to return to work when they 
were there.
    The fact that we did not have massive layoffs, we did not 
have restructuring of collective bargaining agreements, we did 
not have reduction in service, all of this was vital to making 
sure that we were going to come out of the end of this better, 
or as good as we were beforehand.
    Mr. DeFazio. Dr. Boskin, I am just a bit bemused by your 
saying, best evidence, every dollar of infrastructure spending 
would increase GDP by 60 cents. S&P last year did a major 
report, and they said, if we expended $2.1 trillion over 10 
years, that the return would be about $2.70 for every dollar 
invested. The IHS has a study that has an even higher number 
than that.
    That is the lowest ball number I have ever seen, and you 
are talking about we are at capacity, and you know, skilled 
workers and all that. When we invest, like the Recovery Act, 
under Obama, which I opposed, all we did was go out and put 
down a layer of pavement.
    It didn't have secondary economic impacts. Contractors 
didn't go out and buy sophisticated expensive machinery 
because, again, they only had these little crappy contracts.
    And it was only about 4 percent of the recovery package. So 
if we are working off that, it is not a good measure. Where do 
you get the 0.60--60 cents? It is the lowest I have seen.
    Mr. Boskin. Well, it is actually a consensus of the best 
macroeconomic evidence, for example, the review essay by a 
highly regarded macroeconomist, Valerie Ramey, in the Journal 
of Economic Perspectives. She reviews all the studies, makes 
them consistent.
    Mr. DeFazio. So Standard & Poor's just made theirs up? Or 
IHS just made up their numbers?
    Mr. Boskin. No, I am not accusing anybody of trying to make 
up numbers. I think people tend to have their own way to 
analyze this. I am trying to report the scholarly research.
    It is also, as I said in my testimony, likely that the 
effect of the CARES Act spending and the COVID relief was 
somewhat higher than this because of the great uncertainty that 
was created, the size of the short-run collapse, et cetera.
    As to the long-run benefits, there can be certainly 
substantial long-run benefits as I emphasized in my testimony. 
CBO's estimate of the rate of return on public investment is 
about 5 percent, not as in one study you suggested, a doubling 
of the value per dollar.
    Undoubtedly, there are some projects that is true of. There 
are others like California high-speed rail, which if anything 
had a negative----
    Mr. DeFazio. Yeah. Well, that is--I will grant you that 
example, but my time is expired. With that, Mr. Crawford?
    Mr. Crawford. Thank you, Mr. Chairman.
    I want to stick with you, Dr. Boskin. As we have discussed, 
Government spending in response to COVID-19 has reached the 
trillions. We are continuing to debate even more spending 
today.
    However, back home and across the transportation industry, 
I keep hearing from employers that they have an abundance of 
jobs and nobody to fill those jobs. Has any of this spending 
incentivized Americans to get back to work, or do you 
anticipate more of the same, employers struggling while people 
continue to stay home?
    Mr. Boskin. Well, it is an important question. There are 
over 10 million job openings listed by American employers, and 
there are millions of workers still on the sidelines who have 
not come back into the labor force to find productive 
employment. Many reasons for that.
    Some of it should abate with school reopenings, and so on 
and so forth, and greater vaccinations, less fear, but probably 
some people retired and won't come back.
    So we have, in some sectors in particular, a substantial 
worker shortage. There are also bottlenecks globally that are 
causing problems.
    So, I think that many of these things were payments 
unrelated to work incentives, made it, in my view, ex ante, a 
very sensible thing. Given the crisis, the uncertainty, the 
massive suffering, I think it was quite reasonable to try to 
flood the system and, you know, to try to cushion things.
    And even at 0.6, you know, $6 trillion of spending does 
something for GDP and output of the demand for labor. So I 
don't mean to suggest that--it is not zero and it is not 
negative. It is a modest amount.
    But I do believe that as we look at these new things that 
are being proposed, it is a substantial concern that they are 
not better targeted, less costly, and some of these things have 
work requirements or training requirements or education 
requirements, so people are getting the assistance, are doing 
something to encourage their future productivity and work.
    Mr. Crawford. You addressed this in your comments, but I 
want to drill down on it a little bit more. What are the risks 
from higher debt, and when would you expect that to really 
start to manifest? When would we expect to see that start to 
occur?
    Mr. Boskin. Well, I think the only honest answer to that is 
nobody can be sure. Large build-ups and sustained build-ups in 
debt have often in history, and in many different countries and 
time periods, been followed by sluggish growth, inflation, even 
financial crises.
    We already faced a very daunting task with the unfunded 
liabilities of Social Security and Medicare hitting us as we 
are population aging and other factors. And so, there is going 
to be a lot of pressure on the budget and everything else and 
on private incomes to try to deal with that.
    And so adding additional debt on top of that, I view as 
considerably risky.
    We do have the advantage that the U.S. dollar is the global 
reserve currency, so we probably have a bit of a cushion 
relative to other places and times. They are not perfectly 
comparable.
    But I think the best way to think about it is, it is a 
considerable risk, and under the current macroeconomic 
environment, it is particularly a risk for entrenching 
inflation that hopefully will at least considerably be 
transitory. Although there is some probably already built into 
the cake for the medium term, we shouldn't be trying to add to 
that.
    Perhaps among the bad outcomes that could come from all of 
this is to get back to an inflation stop-go episode where we 
wind up having to slam on the brakes to deal with inflation and 
risk another recession.
    Mr. Crawford. Let me ask you this, and you just addressed 
this. Our status as the reserve currency, the U.S. dollar being 
the reserve world currency, is that in jeopardy?
    Mr. Boskin. I think there is some risk, medium and long 
term. I don't think in the short-term. To be a reserve 
currency, which means that when the Malays trade with 
Australia, things are mostly invoiced in dollars, not their 
domestic currencies. So the dollar plays that reserve role.
    The problem is that that is not immutable, but what you 
really need for that is to have very large, liquid markets with 
very thin bid-ask spreads and futures and options and things 
like that, so people can readily hedge their bets.
    No other currency is yet able to substantially replace 
that. Although there is a risk with various ways that renminbi 
is being used, with the euro, et cetera. There is some risk 
that we will migrate over time to something that is not as the 
dollar, is not so pre-eminent.
    If done very gradually over a very long period of time, 
that wouldn't be a big problem. If it was done more abruptly, 
that could be a big, big issue for us.
    Mr. Crawford. Thank you, Dr. Boskin, and I yield back.
    Mr. DeFazio. The chair of the subcommittee, Eleanor Holmes 
Norton?
    Ms. Norton. Thank you, Mr. Chairman, and thank you for this 
important hearing. My question is for Mr. Samuelsen of the 
Transport Workers Union. Mr. Samuelsen, according to your 
organization, more than 95 percent of your members, almost all 
of them considered essential workers, never lost a paycheck 
during the pandemic as a result of COVID-19 emergency relief 
funds from the Government.
    Can you highlight which Federal programs helped your 
members the most in dealing with the pandemic, and do you 
believe the transportation sector would have suffered greater 
consequences without the Federal assistance, and if so, in what 
way?
    Mr. Regan. As the labor leader substituting for Mr. 
Samuelsen, I will answer that. In totality, the aid, the three 
tranches of aid to public transit agencies with the requirement 
they do not furlough workers was critical to that industry, and 
the same was true for PSP on the airlines side and the aid to 
Amtrak as well.
    Those three programs combined made sure that our entire 
supply chain was in place and that people who needed to use 
those services and the people that needed to ship goods and 
services were able to do it, especially our critical workforce 
in the healthcare industry and with food and medical supplies.
    Ms. Norton. That is certainly important to understand.
    Mr. Skoutelas, as you know, the House-passed surface 
transportation bill, the INVEST in America Act, provided more 
than $100 billion through the Federal Transit Administration to 
enhance and support transit services in communities across the 
Nation.
    How could this funding have helped transit operators 
recover from the challenges posed by decreased ridership and 
revenues, and the increased costs brought about by the COVID-19 
pandemic?
    Mr. Skoutelas. Well, thank you, Congresswoman. Let me just 
say that we, as APTA, and our transit industry have been 
staunch supporters of the INVEST in America Act for some of the 
reasons that you touched on, the level of investment for public 
transit to upgrade and modernize our transit systems and put 
them on a stable foundation.
    The American Society of Civil Engineers, in its report card 
of infrastructure of all modes and of all types, which comes 
out every few years, gives the public transit industry a D-
minus. That is a reflection of the condition of our public 
transit infrastructure.
    So the INVEST in America Act, and now what is before you, 
the Infrastructure Investment and Jobs Act, would go a long way 
to helping the industry modernize, and that is what is needed 
here. It is long overdue.
    The investment levels certainly are at a level that we 
think begin to make progress, and quite frankly, even at the 
levels that they are proposed are not totally adequate in terms 
of the need that has been documented, both by the Federal 
Government in terms of the U.S. Department of Transportation 
studies but also by----
    [Video conferencing malfunction.]
    Ms. Norton. What happened to the--what happened? Could you 
pause the time? What happened?
    Mr. DeFazio. We cannot hear you responding to the question. 
We saw Mr. Katko for--what is that?
    Voice. Paul may be on mute.
    Mr. Skoutelas. I am here. I started to hear one of the 
Representatives speaking, so I stopped. So I don't know if you 
heard my----
    Mr. DeFazio. OK. Well, continue. Finish what you were 
saying.
    Mr. Skoutelas. Well, I did conclude simply by saying that--
--
    Mr. DeFazio. OK. All right. OK.
    Mr. Skoutelas [continuing]. We support the Infrastructure 
Investment and Jobs Act that is before you.
    Ms. Norton. Well, can you discuss steps your members plan 
to take to ensure that they use this funding in the most 
efficient way possible to get the maximum benefit of these 
taxpayer dollars?
    Mr. Skoutelas. Absolutely. I think our agencies are 
committed to that. They understand the public nature of what 
they do, the importance to our communities and cities, and the 
requirements that they have to deliver those dollars in an 
efficient way.
    And there is no change from that. That has been a 
longstanding principle and a way of doing business for the 
agencies. I am very confident that you will see that with any 
additional resources that come for public transit investment.
    Ms. Norton. Thank you very much. I think my time is expired 
by now.
    Mr. DeFazio. Well, you still have 37 seconds. But if the 
gentlelady would yield to me?
    Ms. Norton. Yes, I am glad to yield to the chairman.
    Mr. DeFazio. OK. Yeah. Great.
    Dr. Boskin, I would like to ask you a real brief question. 
We were talking about the dollar as the reserve currency. What 
would happen if the United States defaulted on its past debts, 
which is now being threatened on the other side of the aisle? 
What would that do to our status in the world and the reserve 
currency status and inflation?
    Mr. Boskin. Well, I think it would cause at least a very 
severe temporary disruption in financial markets, and that 
could be--the ripple through the real economy, if we weren't 
careful, I think would be very damaging.
    I am not going to get into the politics of how to get the 
ceiling raised, but at this stage, it would be wise to do so.
    Mr. DeFazio. Thank you.
    Now I would recognize Garret Graves.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman.
    Mr. Boskin, I appreciate you joining us today. I was 
looking through some of the Government Accountability Office 
reports that showed that we had, I think, over $1 trillion--$1 
trillion with a ``T''--dollars left in COVID relief from the 
previous year. In fact, we did legislation as recently as 
December of last year that provided funds for COVID.
    Yet this year, as early as January and February, folks were 
trying to pass a $1.9 trillion additional package under the 
auspices of COVID. I understand your comments about the debt 
limit, but is it advisable for us to be dumping more money on 
top of dollars that have been unspent to even--you know, to 
where we really don't even know where things are needed and 
where the true impacts or unaddressed areas are?
    Mr. Boskin. The least harmful to the economy would 
certainly be to make sure that the unspent funds come first and 
are spent wisely.
    Mr. Graves of Louisiana. Right now, if I go and add things 
up, if I remember right, let's see, we have a $1.9 trillion 
package that was done earlier this year. We now have a $1.2 
trillion infrastructure package, a $4.3 trillion reconciliation 
package, and the annual appropriations process will be 
somewhere around $4 trillion.
    Add all that up, it is $11.4 trillion, and we are not even 
through the year. I understand your comments about honoring our 
debts, and I certainly understand that, but at the same time, 
is it advisable for us to be spending that kind of money and 
further incurring greater debts?
    Mr. Boskin. The macroeconomics are not advisable. They 
could be somewhat mitigated by a smaller amount spread out, as 
much of this is spread out over a number of years.
    There are obviously a variety of things that have been 
called budget gimmicks about things starting late or ending 
early and things of that sort.
    But the basic idea of having the general scale of the size 
of our Government [inaudible] to my view is probably not wise. 
We see--there are many studies documenting that one of the 
several but an important part of the reason our standard of 
living is considerably higher than most Europeans, is, we have 
a more modest-size Government spending and taxes [inaudible]. 
We are at about one-third. They are at about one-half. 
[inaudible] all of the large difference in taxes, I think that 
is an exaggeration, but a considerable [inaudible], to put it 
in just [inaudible] talk about very much, America's real GDP 
per capita are just [inaudible] after tax is 50 percent higher 
than [inaudible] Denmark.
    You don't want to go down the road of a lot of headwind to 
future prosperity, especially [inaudible] coming in the labor 
force by slowing growth on [inaudible]. That means we are going 
to face funding Social Security and Medicare, having to deal 
with their unfunded liabilities in the coming decade, those 
programs [inaudible] Social Security retirement [inaudible] in 
a decade or slightly more [inaudible]----
    Mr. Graves of Louisiana. Mr. Boskin, we are having trouble 
with your audio. I am going to go ahead and reclaim my time 
here and hopefully perhaps get answers for the record.
    I want to turn to the transit issue. You know, we talked 
about all the spending of funds. I believe when you add up the 
COVID funding from last year, and you add all the COVID 
packages, we had $69 billion in transit funding. We have, I 
think, $90 billion in the reconciliation package, another $10 
billion in regular appropriations, comes out to $170 billion.
    Transit programs have had ridership down 75, 95 percent. 
Why are we putting so much money into transit when there are 
not folks riding it? Yet even in the infrastructure package 
that is being debated, you only have $110 billion in new money 
for roads and bridges?
    Mr. Regan. If I may, sir, I would argue that all the money 
we spent on the relief money was to maintain services so it was 
there for the people that need it, and that will be there when 
we come out of the pandemic.
    I would argue that we have been dramatically underinvesting 
in transit for decades now. All you have to look at is, you 
know, the report cards across all of our transportation 
networks are averaging, what, a D-plus these days?
    So we really need to do the big investments to make sure 
that we are able to be competitive as a country, make sure that 
we have transportation options for everybody. Whether it be in 
transit and rail or roads and bridges--we support that as 
well--these are necessary investments that are decades overdue.
    Mr. Graves of Louisiana. But why should we put money 
towards transit and not towards roads and bridges?
    Mr. Regan. We are putting money towards both, and that has 
been the way the Highway Transit Fund has been set up, has a 
split to make sure that both are being supplied based on----
    Mr. Graves of Louisiana. My time is expired, but I will 
follow up in writing, and I have a few more questions on this 
topic.
    Thank you, Mr. Chairman, I yield back.
    Ms. Williams of Georgia [presiding]. Ms. Johnson of Texas 
is now recognized for 5 minutes.
    Ms. Johnson of Texas. Thank you very much.
    Let me thank of our witnesses for being present, and let me 
engage Mr. Ortiz.
    I understand that you had some concerns about supply chain 
issues in terms of gathering equipment. Can you elaborate on 
that?
    Mr. Ortiz. Yes. There has been--had there been a 
prioritization on the supply chain and had we been able to seek 
out one specific source for our necessary supplies to provide 
PPE to the frontline workers would have been more effective and 
efficient. I think also very quickly we realized there was a 
need for a national strategy for supply chain management in 
order to ensure that we were not competing with other States 
and other cities to seek out the limited supply of personal 
protective equipment, because if not, then we can experience 
both limited supplies to increase the price, and unequal 
distribution patterns.
    And if I am permitted, there is a natural example that I 
can give you. After Austin was told by multiple of the Nation's 
largest suppliers that our order for PPE was not large enough, 
we partnered with the city of Houston and the Texas Medical 
Center in Houston, and we identified supplies that were located 
in a port in Florida, and as we were in the process of the 
procurement, we were notified by the source that the Texas 
Division of Emergency Management took possession of supplies 
before we could close the deal. In this situation, we find 
ourselves competing not only against other cities attempting to 
mitigate a disaster, but even our own State.
    So supply chain is something that I think becomes very 
crucial when you have a nationwide pandemic like we have 
experienced so far.
    Ms. Johnson of Texas. Thank you very much.
    Are there other entities across the United States with 
similar noncongregate sheltering programs who have had their 
project applications approved?
    Mr. Ortiz. Yes. It is our understanding that State and 
local governments in FEMA region 4, which is around Florida, 
and FEMA region 2 in New York and FEMA region 3 in Washington, 
DC, have had similar noncongregate shelter projects obligated 
with a few having funding already disbursed.
    Ms. Johnson of Texas. And one last question on that. Can 
you expand a little on the local emergency management 
perspective on why FEMA selected so few Texas applications?
    Mr. Ortiz. Yes. Within Texas, $468 million in total project 
funding applications were submitted, but no competitive 
projects were selected. We believe the issue, in large part, to 
be that Texas does not facilitate the adoption of the 
enforcement of 2015 and 2018 International Building Code and 
the International Residential Code.
    However, the city of Austin does follow these codes, and 
Texas building codes adoptions take place at the local level. 
Given that the BRIC program assesses the IRC and the IBC at the 
State level and allocates technical points on an all-or-nothing 
basis, valid and much-needed mitigation projects go unfunded. 
For Austin, that meant that mitigation projects for an area 
that had been impacted by flooding multiple times was not able 
to compete and was not funded under the BRIC program.
    To bring this to a larger perspective, all of the nine 
States, the District of Columbia that received competitive 
funding had an IBC and IRC in 2015 and 2018. There were no 
States or districts funded without these codes.
    Ms. Johnson of Texas. Thank you very much.
    My time has expired. I yield back.
    Ms. Williams of Georgia. Mr. Weber is now recognized for 5 
minutes.
    Mr. Weber. Thank you. I appreciate that.
    And actually, I am going to discuss some of the points--
where is my bio on Mr. Boskin over here, Doug? Did you give it 
back?
    Mr. Boskin makes a lot of great points in his discussion, 
and I want to just run through them real quickly and see if 
there is time for questions.
    He said ``I support policies to mitigate short-run economic 
pain caused by a crisis like the COVID-19 pandemic and help 
spur recovery, as long as the long-run cost is reasonable.''
    Good point.
    He says it is early days in the detailed evaluations of the 
economic effects of the several responses to COVID, and their 
many components, by independent scholars, and that he is going 
to address his comments to the desirability of additional 
spending, which is what we are discussing here today, and its 
methods of finance, its methods of finance under 
consideration--I want to highlight--for traditional 
infrastructure.
    When I read that sentence that he wrote, I thought 
traditional infrastructure financing. So does that include 
terms like ``social justice''? Does that include terms like 
``climate justice''? Also, does that include terms like ``you 
can get more money or a subsidy for a Tesla if the car is built 
in a union shop''? Is that traditional finance for 
infrastructure projects? I kind of doubt it.
    He says he cites much of the research below as evaluations 
based on the 2009 ARRA, the American Recovery and Reinvestment 
Act, but some focus on other data periods as well.
    He says that some claim that there is a multitrillion-
dollar infrastructure deficit, and others have long blamed 
inadequate public investment for holding back the U.S. economy. 
Others argue that a closer analysis shows the infrastructure is 
in much better shape and advocate for improving the allocation 
of funding--don't miss that; the allocation of funding--over 
massive new expenditures.
    And if these expenditures aren't massive, I don't know what 
is, especially when you have got union jobs in there that are 
getting paid for, you have got social justice and climate 
justice. We don't even know what that means. How does that 
money get allocated? How do we figure out whether it is 
appropriate or not?
    He says U.S. infrastructure forums rate our infrastructure 
as 13th out of 141, behind Singapore and Hong Kong, but ahead 
of countries like Sweden and Denmark. And that, in my opinion, 
we are not that bad. But he says only some of that is 
appropriately a governmental, and only a part of that is 
appropriately a Federal responsibility.
    So I repeat--pardon me--the way it is being spent and the 
amount that is being spent is unconscionable and incredibly 
shortsighted.
    He talks about the Highway Trust Fund following the 
expiration on the 2015 FAST Act in his writing. He says the 
Highway Trust Fund will depend not just on the level of 
spending, but also the ex-ante quality of the projects funded 
and their post-execution and their financing methods.
    Well, I looked up ex-ante, and it says it is based on 
forecasts rather than actual results. Well, who could have 
forecasted that we would be spending this much money 
inappropriately, and irreverently, I would state?
    He goes on to say that, If done well, the program can 
produce substantial societal benefits, but done to excess or 
with poor design incentives, a plethora of poor-return 
projects, even boondoggles, would likely result.
    You know, it makes me think about here we have, what is it, 
500,000 electric vehicle charging stations in the bill, and it 
makes me think about going back when the gasoline engine was 
invented in the 1900s. And I wasn't alive then. I know I just 
look that old, but I read the history books, and the term for 
the automobile was ``horseless carriage.'' Some of you all 
remember that.
    Well, I remember, reading also in those history books that 
when the gasoline engine was invented in cars, the Government 
went out and they put gasoline stations everywhere. Oh, wait. 
They didn't. And now, we are going to put in electric vehicle 
charging stations. How about entrepreneurs get out there and do 
that like they did with gas stations.
    He goes on to say that it should be noted that the economy 
is now back to its pre-pandemic levels and is growing solidly. 
While risks remain, we should keep a close eye on job growth to 
make sure unemployment continues its downward movement to full 
employment. It does not appear likely to need more considerable 
input, short-run stimulus on top of that is already provided in 
this process. No more is needed, especially not at these 
spending levels.
    He makes great arguments. He said, in fact, existing 
research suggests that it is a misguided conclusion, page 4. 
Colleagues, read his testimony. He makes perfect sense what he 
is laying out.
    With that, I yield back.
    Ms. Williams of Georgia. Mr. Larsen is now recognized for 5 
minutes.
    Mr. Larsen. Thank you, Chair.
    I would also note that economists have predicted nine of 
the last five recessions, so it really depends on which 
economist you read, and there are others who are saying 
different things. But I certainly agree that the economy 
continues to emerge but has not yet emerged. Our unemployment 
rate continues to surpass the rate before the pandemic, and we 
are defeating the pandemic, but it is not yet defeated.
    In my State, we have a very high vaccination rate, but we 
are also seeing local hospitals being crammed by COVID cases in 
their ICUs, Delta cases, 93 percent of which are unvaccinated 
folks. So the pandemic being defeated but not yet defeated, the 
economy is emerging but not yet emerged, and I believe, 
therefore, we still need to stand up and stand in and help.
    So my first question is for Mr. Skoutelas. And if you could 
comment on the impact that COVID-19 has had on paratransit and 
paratransit riders and what transit has done to alleviate the 
impact on paratransit specifically.
    Mr. Skoutelas. Well, as we know, paratransit is essential, 
an essential service that is offered by most of our transit 
agencies across the country, and that is door-to-door service 
for those who are either elderly or in need of specific medical 
assistance. And this is critical services. What the COVID 
relief has allowed agencies to do is to maintain that service 
for this very fragile, very vulnerable segment of our 
population.
    Without those resources, those services would have been in 
jeopardy. And by the surveys that we have done, we would have 
seen the complete closure and stoppage of those operations. But 
what the relief was able to do was to continue, provide the 
resource, agencies maintain that service level. And as a 
result, those needy populations were attended to. And that is 
the biggest result, I think, that--again, we have to think 
about this in the context of serving people, and this is what 
the emergency relief did for public transit, allowed the 
agencies to serve people and the brave workers that delivered 
those services on a daily basis.
    Mr. Larsen. Thank you. That is fine.
    Mr. Regan, can you discuss your thoughts why the 
unemployment rate in March of this year for transportation 
workers was still nearly 3 percent above the overall U.S. 
unemployment rate? Is it specific to certain jobs or 
professions? And what additional measures can be taken to 
support those jobs or professions?
    Mr. Regan. Sure. In transportation, you have to look at 
individual sectors. I think broadly, there are different 
causes, depending on the sector you are in. I think in some 
cases, it is whether the demand has returned to get full 
service back in Amtrak or in aviation. I know that in March 
this year, Amtrak had begun to bring back all of its furloughed 
employees but had not brought everybody back. So I would be 
interested to see what they look like in a month or two once we 
have sort of the full impact of all of the relief effort is 
there.
    Mr. Larsen. Any other thoughts, though, on additional 
measures that can be taken?
    Mr. Regan. Certainly, I think investing more in our 
infrastructure system right now. I think the infrastructure 
bill that has been placed before the House here is a really 
good one. It would put into place a lot of the big investments 
that we have been calling for for decades. We have been 
underinvesting, and if we are able to do this now and put 
historic levels of investment into Amtrak, into transit, into 
roads and bridges, all of those things will help bring more 
people back to work.
    Mr. Larsen. All right. And, Chair, I just want to make a 
final point, a bipartisan point, that as part of the American 
Rescue Plan, although there was a partisan vote on it, there 
was bipartisan legislation incorporated into it. The Aviation 
Manufacturing Jobs Protection Act, cosponsored by me and by Mr. 
Estes from Kansas, that program utilized $750 million that went 
to 488 aviation companies, mainly smaller companies, to bring 
back workers, to protect those workers' jobs, to ensure 
continuation of the aviation supply chain in an industry that 
was especially hit hard by the pandemic. And I just want to 
note that, because there was a bipartisan effort to get that 
bill incorporated into the American Rescue Plan. It is being 
implemented right now. It is working. And I do want to end my 
comments on that bipartisan note, because it does happen around 
here, despite what we read.
    With that, I yield back.
    Ms. Williams of Georgia. Mr. LaMalfa is now recognized for 
5 minutes.
    Mr. LaMalfa. Thank you, Madam Chair. I appreciate the 
opportunity in this hearing here.
    Dr. Boskin, I am interested in some of your earlier 
comments and answers to questions here on the whole broad 
picture we are looking at with Federal Government spending. Of 
course, we had three previous big COVID packages, part 
defensible, part maybe not so defensible, more recently a 
smaller package passed by Democrats without really any 
significant Republican input, pushed through the process, but 
it had a lot of additional spending in it, hundreds of billions 
in additional spending that were really above what was needed. 
So we look at this in context with inflation, and I am glad we 
are having that conversation as well.
    We--this stimulus bill--let's step back in time, too. You 
talked about in your comments the 2009 ARRA bill that was 
supposed to be a stimulus at the time, I think somewhere around 
$800 billion. That was back when we weren't quite as 
comfortable with throwing the word ``trillion'' in spending 
around as we seem to be these days. Shovel-ready projects, can 
you comment on the efficacy, the performance when Federal 
Government stimulus dollars just fill up the trough like that, 
going back to ARRA or more recently?
    Would you comment on how well that performs and, basically, 
bang for the buck for the taxpayer and what kind of inflation 
is involved just when there is that much money in the trough 
and everybody is trying to get their piece.
    Mr. Boskin. Of course, the 2009, February 2009 ARRA passed 
at a time when there was substantial unemployment. Unemployment 
was rising rapidly. There was great uncertainty about how the 
economy would recover from that.
    So when these sorts of things happen, as you indicated in 
your opening comments, sometimes you need to get something 
started. It may not be perfect, but I think we can learn from 
that a variety of things. Number one, that the ex-post 
estimates by independent scholars suggests that it costs 
several hundred thousand dollars per job saved or created. 
Eventually President Obama came out and said, I guess to say, 
their words, there is no such thing as a shovel-ready project.
    So there may be a few here and there, but in general it 
takes time to get infrastructure done. It takes--there is only 
about 5 percent of infrastructure, a lot of those [inaudible].
    Mr. LaMalfa. So, Doctor, you might say an immediate jolt on 
jobs isn't really there because shovel-ready really doesn't 
exist to any great extent.
    Mr. Boskin. I think it cushioned the fall some. I think it 
is fair to say that, but I think it had much less impact than 
was being projected at the time the economic advisors were 
predicting a so-called multiplier of 1.7 ex-post estimate 
[inaudible] and seems to have been about one-third of that. 
That is not----
    Mr. LaMalfa. In California, sir--I am sorry. In California, 
right in your backyard, the high-speed rail project was going 
to blow right through Palo Alto there, and at the time in 
California they were touting it as being 1 million jobs, and 
soon finally we got out of it, it was 1 million job-years. A 
comment on, is that kind of a poster child for the big promises 
made by this type of--what do you want to call it--
infrastructure or in general, stimulus spending?
    Mr. Boskin. Well, I think, as a general matter, spending 
the money 6 years after the recession isn't going to cushion 
job loss very much, so that was poor. I think the funds wound 
up being spent hurriedly to do something that was unnecessary 
and unwise given subsequent information, but they were spent 
because otherwise the money would have had to have been 
returned to the Federal Government under the terms.
    So I think that is a particularly poor example. There are 
many other projects that are certainly better than that.
    I think it is worth pointing out that when you take a look 
at this kind of thing, all the academic literature, from Ed 
Gramlich, a Clinton Federal Reserve appointee, the CBO's 
analysis of this, suggests that the highest return projects 
tend to be repair and maintenance, and there is certainly that 
that should be done. It is not a sexy--you don't have a ribbon 
cutting----
    Mr. LaMalfa. No, they aren't. They are very needed. How 
about Cash for Clunkers? That was supposed to be a stimulus as 
well for the auto industry and new cars. Do you remember that 
one?
    Mr. Boskin. Yes, I do. We evaluated that. It moved car 
sales forward a few months and then they collapsed, so didn't 
do very much, and the cost per ton of CO2 reduction was about 
20 times what the European Union treaty was [inaudible].
    Mr. LaMalfa. That is being discussed around here again. So 
thank you, Dr. Boskin.
    Ms. Williams of Georgia. Mrs. Napolitano is now recognized 
for 5 minutes.
    Mrs. Napolitano. Thank you, Madam Chair.
    Mr. Regan, in Congress, I have introduced the Transit 
Worker and Pedestrian Protection Act included in the INVEST in 
America Act, and a version of which was included in the 
infrastructure bill on the floor this week, which will require 
the implementation of protective shields in buses and transit 
vehicles to ensure the safety of drivers. If this bill had been 
implemented prior to COVID, it could have protected public 
health and spread of COVID by having barriers in place.
    What are your thoughts on the Transit Worker and Pedestrian 
Protection Act? How necessary and important is the bill for 
protection of you and your colleagues? And also during the 
outbreaks of violence against other transportation workers, how 
does it work? What should Federal Government be doing to 
protect all transportation workers?
    Mr. Regan. Thank you so much for your question and for the 
consistent support you have had for transportation workers on 
safety.
    Yes. I think passing the Transit Worker and Pedestrian 
Protection Act would have had a significant impact on reducing 
some of the assaults and some of the problems we have seen 
since the pandemic started. One example here is that we aren't 
collecting data adequately on the extent of the problem. This 
bill would help us collect data on all the assaults, not just 
the most violent ones, which is the case right now, which would 
really allow us to better examine what the scope of the problem 
is and where the improvements need to be made.
    The other thing that it would do is basically look to 
transform the workspace inside a bus to make sure that the 
workers were better protected, they reduce--you know, to 
improve the line-of-sight visibility, decrease the blind spots 
and generally make it a safer system for people both inside and 
outside the buses.
    Mrs. Napolitano. Very good. But what about the shields? How 
do they protect the workers? What has it done--like Los Angeles 
has done it for our metropolitan workers, and they seem to have 
a very good record of not having COVID transmitted.
    Mr. Regan. Yes, I think shields are an important part of 
that. There are various shields being used at transit agencies 
across the country. Some of them have less of a benefit than 
others. But if you have a reimagined workspace that actually 
protects workers, I think that would be a really important part 
for moving forward. And I know there has been a lot of people 
out there designing these, and the Federal leadership is needed 
here to make sure that they are implemented across the country.
    Mrs. Napolitano. Would it be better to go to the 
manufacturers and suggest that they implement them in the bus 
sales?
    Mr. Regan. I think a lot of it will be done it with the 
manufacturers, but the agencies who are procuring buses are 
also going to have to require certain specifications that are 
there to protect workers. So, ultimately, the manufacturers are 
going to be responding to the RFPs and responding to the asks 
from the agencies, from their customers on these issues.
    Mrs. Napolitano. Thank you very much, sir.
    Mr. Ortiz, you state that FEMA all too often recaptures 
disaster assistance funds on the pretext of small violations of 
arcane procedural rules and regulations, the complexity of 
which are exacerbated by policy inconsistencies across regions 
and from year to year.
    Would you explain a little more about that? And how can we 
help resolve some of those issues?
    Mr. Ortiz. Yes. I believe the main issue is, especially in 
this pandemic, we have a national disaster that is impacting 
everybody, and the effort is trying to allow the FEMA regions 
to use all resources available to respond to the emergency. The 
problem exists when we start having disparities from different 
regions, and the application of the rules and laws that makes 
it difficult for the whole country as a whole to be able to 
recover in an effective and equitable manner.
    Mrs. Napolitano. I see. Well, thank you very much, Madam 
Chair, and I yield back.
    Ms. Williams of Georgia. Mr. Fitzpatrick is now recognized 
for 5 minutes.
    Mr. Fitzpatrick. Thank you, Madam Chair. And thanks to 
everyone on the panel for joining us here today.
    My question is for Mr. Regan of TTD. Good morning, sir. 
Please send my regards to President Samuelsen. We will be 
keeping him in our thoughts today.
    My question for you, sir, relates to the benefits of 
transit relief that Congress provided. Transit agencies 
received a significant amount of Federal aid. What would public 
transit and all those that depend on it look like today if 
Congress had not provided the amount of aid that we did?
    Mr. Regan. Oh, and thank you and thank you for your kind 
words about Mr. Samuelsen.
    To be frank, transit would have been completely decimated. 
There wouldn't be the workforce in place to support rising 
demand. We would not have been able to--the rise in demand we 
are seeing now, we would not have been able to sustain 
operations during the pandemic, especially for those who relied 
on it to make sure that they were getting to their jobs, 
whether it be in healthcare or in food service or in grocery 
stores. So, we would have been in a very, very difficult spot. 
And, frankly, if we hadn't had the support in place from the 
Federal Government, I think we would have been digging this out 
for years to try to make sure that we would--to bring our 
transit systems back to where they were before the pandemic.
    Mr. Fitzpatrick. Second question. SEPTA, as you know in my 
district, and other agencies have continued to invest in 
electric buses and other types of new capital projects 
throughout the pandemic. Are there any additional actions that 
are needed to ensure that our transit workforce is ready for 
the next generation of technology? This is certainly an area 
that we know our society is moving to microchips and everything 
pretty much, certainly in the area of transportation. So as we 
proceed into this next generation of technology, like electric 
buses, are there any additional actions that are needed by us 
to ensure that our workforce, our transit workforce is ready 
for the next gen?
    Mr. Regan. Yes, there are. Frankly, we have been working--
and I say ``we''--TTD and our unions have been working with 
leadership at T&I, as well as that of the Senate Banking 
Committee to make sure that all of the funds that are attached 
to, you know, the low-emission or EV vehicles will support 
workforce development, the development for the next generation 
of transit vehicles.
    Historically we have invested next to nothing in the 
transit workforce and in transit workforce training. So this 
investment will upend that trend and make a huge impact so that 
not only are we funding the physical infrastructure, but we are 
making sure that the workforce is ready to operate it safely, 
and make sure that our maintenance is up to speed as well.
    Mr. Fitzpatrick. Thank you, Mr. Regan.
    Madam Chair, I yield back.
    Ms. Williams of Georgia. Mr. Johnson of Georgia is now 
recognized for 5 minutes.
    Mr. Johnson of Georgia. Thank you, Madam Chair, for holding 
this hearing, and thank you to the witnesses for your time and 
your testimony.
    Since the start of this once-in-a-century pandemic, 
Congress has acted decisively and passed legislative relief 
totaling $5.9 trillion; but our work is far from done, and we 
are obligated to ensure that relief aid arrived to the folks 
who needed it most, especially Black Americans, communities of 
color, and low-income groups who have, too often, been 
dismissed by the Federal Government.
    Mr. Skoutelas, public transit plays a uniquely important 
role for communities of color. In 2017, APTA reported that more 
than 60 percent of riders are minorities, such as Black 
Americans and Hispanics, and during the pandemic, transit 
provided a lifeline for essential workers, many of whom are 
minorities, to get to and from their jobs, while also providing 
critical assistance to minority-owned small businesses.
    Can you discuss specific examples of how Federal assistance 
enabled your member transit agencies to continue to serve 
minority populations during the pandemic?
    Mr. Skoutelas. Thank you, Congressman, for that question.
    You are absolutely correct, the transit services through 
the pandemic period were absolutely critical in two regards, 
not only for transporting many of the minority population to 
hold their essential jobs, as we talked earlier, jobs at 
hospitals, at medical centers, those critical jobs at grocery 
stores. These are the individuals that I often remark--and I 
think it is so true--that are out there performing their jobs 
as they had and continued to do through the pandemic so that 
the rest of us who have the great fortune of being able to, at 
least for a time period, work remotely, be able to conduct our 
lives.
    So those minority populations in every city and community 
across the country have done just that in terms of supporting 
the services that are delivered, and in terms of operating 
those services, really bearing the risks of being on the front 
lines and providing the services on behalf of the greater 
population.
    So transit services are absolutely essential, not only in 
terms of the minority population who comprise a large 
percentage of ridership, but also those who also deliver the 
services to these needy areas throughout the country and in 
many communities. So your comments are right on target, and 
very much what we experience and what we know day to day in 
talking to our member agencies across the country.
    Mr. Johnson of Georgia. Thank you, Mr. Skoutelas.
    This past summer, I introduced the Stronger Communities 
Through Better Transit Act, which would create a new program to 
provide high-quality, frequent public transit. How will Federal 
funding help transit operators recover from the challenges 
posed by the COVID-19 pandemic, such as decreased ridership and 
revenues?
    Mr. Skoutelas. Here again, the emergency relief that you 
all, that Congress passed, was so fundamental to providing 
continuity of services. The surveys that we have done very 
recently of our membership suggests that almost half, if not 
above half, of all agencies would have shut down their services 
entirely, not only lost jobs for workers, but lost 
opportunities to service their communities and to service the 
people that rely on it. So it helped us through this period, 
and it has been a period of survival for the agencies.
    Going forward, what is being proposed in terms of the 
Infrastructure Investment and Jobs Act is all about modernizing 
our systems, investing capital dollars, not operating dollars, 
capital dollars, to be able to improve these systems to allow 
agencies to better serve communities of color, and communities 
all across the country that really rely on public transit.
    Mr. Johnson of Georgia. Thank you.
    And, sir, what impact would parity in funding for transit 
and highways have on our ability to mitigate climate change and 
elevate historically marginalized communities?
    Mr. Skoutelas. You know, we have had a pattern of robust 
investment in highways over at least a half a century, perhaps 
longer. On the public transit side, quite frankly, we have been 
underinvested, as you heard from others, including my 
colleague, Greg Regan, for many decades, and so we are trying 
to make up the difference here. It won't be made up in one bill 
or one act but needs to be followed over a course of a number 
of years, and I would even say decades, to get the public 
transit systems with the kind of resources that they can have 
to provide true alternatives and true options to serve our 
communities and people all across the country.
    So we are in a deficit position relative to the investment 
that is needed, and that is not coming just from the transit 
association, that is coming from independent sources that have 
confirmed that, and we need to make stronger, larger 
investments in public transit in the long term to get even 
close to what the investments we have made in the highway 
system for well over a half a century.
    Mr. Johnson of Georgia. Thank you.
    And I yield back.
    Ms. Williams of Georgia. Mr. Nehls his now recognized for 5 
minutes.
    Mr. Nehls. Madam Chairwoman, thank you.
    And my first question is for Dr. Boskin. In your testimony, 
you spoke of the diminishing benefit of additional stimulus at 
this point in time of the pandemic, and across our entire 
Government, we know that there are hundreds of billions of 
pandemic relief money that is yet to be spent. At the U.S. 
Department of Transportation, for example, the outlay rate for 
relief money appropriated in the CARES Act, in supplemental, 
the American Rescue Plan, it remains at 37 percent.
    And as this body considers another $3.5 trillion in 
economic stimulus, should the exorbitant amount of existing 
unspent--unspent--stimulus raise any macroeconomic concerns?
    Mr. Boskin. Well, I think the least risky thing would be to 
spend that first or simultaneously with any additional funds 
that are passed. I believe that they are at great risk in a 
large additional short-run stimulus, risk of inflation, 
substantial budgetary costs, risks of poor allocation of the 
funds.
    It is also worth pointing out, to pick up a point that 
Wendy Edelberg mentioned in her opening statement that the 
disposable personal income was $1.5 trillion proposed 
[inaudible] vastly the amount of savings where they would have 
[inaudible]--and appropriated to spend as it becomes available 
by supply chain issues are resolved as safety is resolved, the 
pandemic [inaudible]----
    Mr. Nehls. Thank you. Thank you, Dr. Boskin.
    The next question, Mr. Ortiz, in your written testimony it 
says the city of Austin Homeland Security and Emergency 
Management Office is one of several public agencies charged 
with keeping our city and metropolitan area safe. And you work 
with public and partner organizations to protect our whole 
community when it needs us the most.
    And I understand the Austin police force is down 150 
officers since making the decision to defund the police. In my 
graphic here, you will see there is a quote from an Austin City 
Council member, quote, ``Our primary response to problems as a 
local government is policing. Our community has come together 
like never before and demanded that change and set a goalpost 
of $100 million [reduction in the police budget] as a signal to 
that change.''
    Well, the city of Austin did it. They made that cut. But it 
is actually more than $100 million. The Austin Police 
Department lost one-third of its budget, $142 million. They 
failed to fill 150 open jobs, and on top of that, they have 
lost another 150 sworn officers.
    The result has been catastrophic. We all know it. We see 
it. Crime is spiking. Murders are up 71 percent over the last 
year, and, sadly, it is the citizens that will suffer the most 
because of this irresponsible policy.
    So, Mr. Ortiz, has the dwindling police force in Austin 
changed your role, or increased emergency management duties?
    Mr. Ortiz. Thank you for this question.
    We have a really good relationship working with all our 
public safety agencies and departments in the city of Austin, 
and my understanding is that a majority, if not all, of that 
funding has already been restored to the Austin Police 
Department. And we have a commitment to work with all agencies, 
not only within the city, but within the county and our 
surrounding regions, to make sure our response to future 
disasters is the most effective and efficient as they can be.
    Thank you.
    Mr. Nehls. So as the director--let me get this right. So as 
the director for homeland security for the city of Austin, you 
would like to continue to see the size of your police force 
reduced? Or would you like to see it go back to where it was 
before this irresponsible council member and city council made 
such an irresponsible decision?
    Mr. Ortiz. Like I stated, my understanding is the majority 
of that funding, if not all, has already been restored to the 
police department through the budget process that they have 
gone through. We are committed, and we work and we have an 
excellent relationship with all our public safety agencies, and 
they know that our commitment to the community and to our 
region is there, and we will be there to ensure that all future 
emergencies and disasters are coordinated and are as effective 
and efficient as they can be.
    Thank you.
    Mr. Nehls. Well, thank you.
    And you seem to be a very reasonable man, and I am sure 
that you will do everything you can to make sure that you can 
provide that safety and security to your residents.
    And thank you for your time.
    Ms. Williams of Georgia. Ms. Brownley is now recognized for 
5 minutes.
    Ms. Brownley. Thank you, Madam Chair.
    Dr. Edelberg, thank you for your very comprehensive written 
testimony. I appreciate it very, very much.
    And on page 3 of that testimony, you have a graph that 
really demonstrated sort of the vast regional differences in 
COVID inpatient hospitalization rates that are going on now in 
the United States, particularly in States like Florida and 
Texas, and those States where the politicians are actively 
working to prevent implementation of commonsense public health 
measures.
    So my question is, can you discuss the impact these 
inpatient hospitalization rates are having on the economic 
recovery of these areas?
    Ms. Edelberg. Sure. We have strong evidence that the surge 
in the pandemic from the Delta variant has depressed the 
recovery across the board. One really obvious example is what 
we recently saw in employment. After months of increases in 
employment in the leisure and hospitality industry, in the last 
employment report, we saw no net change. That sector added no 
jobs, so it is still in significant deficit. People are, I 
think, facing the surge in the pandemic, have pulled back on 
face-to-face services, and that is exactly where we need to see 
a strong recovery. So getting a robust recovery goes hand in 
hand with getting the pandemic under control.
    Ms. Brownley. Thank you for that.
    And also in your testimony, you noted the rapid upswing in 
demand for new automobiles. Is there any evidence to suggest 
that the new automobile buyers are individuals who are leaving 
transit due to concerns about COVID, or are these buyers 
generally individuals wanting to replace older vehicles?
    Ms. Edelberg. That is an excellent question, and I don't 
know the answer, but I can say that the increase in spending on 
automobiles has been part of a very strong spending on durables 
overall. So I wouldn't want to separate it out. The households 
in the midst of the pandemic significantly, and quite 
unusually, pulled back on spending on services in a way that we 
have never seen in a recession before, and part of what they 
used--the savings that resulted, is to finance a surge in 
durables across the board, and the spending on automobiles was 
part of that.
    Ms. Brownley. Thank you so much.
    And, Mr. Skoutelas, the first thing that I just wanted to 
say to you is to really thank you and your members for all the 
work you have done for all of us to keep our Nation moving. 
Your frontline transit workers put themselves and their 
families at risk to help other frontline workers, like nurses 
and grocery store workers, get to their jobs throughout the 
pandemic, again, to help us. And I know it has been devastating 
to have, you know, 500-plus of your members having died from 
COVID.
    You mentioned in your opening remarks that transit workers 
are heroes, and I concur wholeheartedly and just really want to 
thank you and all of your members, and please pass that along, 
how grateful we are for their service during this pandemic. We 
are extremely grateful, so thank you.
    The question I wanted to really ask you too is, just 
generally, if we were writing a bill tomorrow, what are the top 
things that Congress needs to do to keep our Nation's transit 
system functioning as the economy now is slowly recovering and 
ridership is slowly rebounding?
    Mr. Skoutelas. Well, thank you, Representative Brownley. 
Let me say that I will pass that along for the excellent words 
that you have shared with me, and let me tell you that the 
industry really appreciates you and the House of 
Representatives and Congress for the great support through this 
emergency funding that has allowed the industry to stay afloat, 
to keep operating.
    First, let me just say that what is necessary is really 
contained in the bill that is in front of you, the 
Infrastructure Investment and Jobs Act, as was the case with 
the INVEST in America Act, provides some larger funding for 
public transit that is long overdue. Every accounting of 
investment we have made as a country in public transit comes 
down on the side to say that, that it has been underinvested. 
The report that I often like to cite because it includes all 
modes of transportation----
    Ms. Williams of Georgia. The Member's time has expired.
    Ms. Brownley. I apologize, sir. I asked a question with 
little time left, so I apologize. And I yield back. And we can 
speak offline.
    Ms. Williams of Georgia. Mrs. Steel is now recognized for 5 
minutes.
    [Pause.]
    Mr. Burchett is now recognized for 5 minutes.
    Mr. Burchett. Thank you, Chairlady.
    Mr. Skoutelas--did I say that name right?
    Mr. Skoutelas. Yes, you did. Thank you.
    Mr. Burchett. All right. Good. ``Burchett'' gets 
slaughtered all the time, so I just want to make sure I get it 
done right.
    Do you believe that it is the role of the Federal 
Government to fund local or regional transit programs?
    Mr. Skoutelas. I do, sir.
    Mr. Burchett. OK. What percentage should the Federal 
Government be responsible for, and what percent should be paid 
for by the State and locality or the rider fees? Because I know 
when I was--younger years, I was in the State legislature, and 
we had a study committee that basically said that about 40 
percent was the funding level--I mean, excuse me, that they ran 
at about 40 percent efficiency, which meant 60 percent was 
either paid by State, Federal, local fees or funds and the 
ridership. I am curious, is there a blanket--a magic number 
that you all would be acceptable to?
    Mr. Skoutelas. There isn't a magic number. It varies really 
by size of agency and the financial structure of the agencies. 
I would say that, on average, across the country, we are at 
about a 35-percent level of rider fees, rider fares for transit 
and the rest, some combination of other revenues, whether it be 
State or local, and it really depends upon the financial 
structure of the organization.
    Let's keep in mind that the bulk of overriding dollars at 
the Federal level go for capital investment for public transit, 
and that is really what we are seeking in terms of the 
Infrastructure Investment and Jobs Act is the capital 
investment that is necessary to modernize our systems. And I 
think that that is a very appropriate role for the Federal 
Government. It has been a part of a 50-year partnership that 
has allowed these systems to maintain and to grow, 
notwithstanding the fact that we have talked here, and it is so 
true, that it has been an underinvestment as well over that 
period of time. But we are seeking and believe the industry 
needs robust investment on the capital side, and that is where 
we believe the emphasis should be.
    Mr. Burchett. OK. Dr. Boskin--and I hope I got that name 
right as well. Is that correct?
    Mr. Boskin. Yes. Thank you.
    Mr. Burchett. OK. Great.
    The reconciliation package includes roughly $60 billion in 
Federal infrastructure spending, most of which is duplicative. 
Do you think the spending in this bill will result in even more 
useless or lower term projects like California's high-speed 
rail project?
    Mr. Boskin. I think there is a substantial risk, getting 
back to your previous question, if the matching ratio, let's 
say, is 80:20 Federal, then local elected officials have an 
incentive to push any projects, say, that has 30 percent--that 
costs local people only 30 percent of the total cost. And so we 
have people in Florida and Georgia and Texas and Colorado and 
New York subsidizing people in California, and vice versa, when 
there are projects in other places.
    So getting good projects is very important, getting the 
incentives right; 80:20 has been the historical--90:10 actually 
for interstate highway--has been historical, but that doesn't 
mean that that is carved in stone or it is sufficient in every 
project would make sense for the [inaudible] to be funding it 
in the future as opposed to [inaudible] local and State funds 
for a larger percentage.
    I think reexamining that is probably long overdue, and I am 
sure there are plenty of good projects out there if this is 
done carefully.
    Mr. Burchett. Dr. Boskin, you talked about the importance 
of national cost-benefit tests for infrastructure projects, and 
I was wondering, could you speak a little more on that? And, as 
well, what Congress should be doing--what we should be doing to 
make sure that the Federal dollars are spent wisely on high-
return projects that provide maybe some long-term benefits to 
society?
    Mr. Boskin. Yes, sir. I think the important thing to focus 
on are things that have prospectively, we are investing funds 
with the hope that they will pay off, things that prospectively 
have good returns, heavily repairs and maintenance, but in some 
case, new capital spending that have interstate or national 
significance, not projects, not voting a lot of projects to 
purely local things where the overwhelming bulk of the benefits 
are received by local riders without much national effect.
    Now, that doesn't mean there is no local project that is 
not a national or a multistate. For example, we have, at the 
moment, massive congestion at the ports in California. You 
know, investments that decongest those ports will get goods 
[inaudible]----
    Mr. Burchett. Thank you. And, Chairlady, I yield none of my 
time because it has all run out. Thank you so much.
    Ms. Williams of Georgia. Mr. Payne is now recognized for 5 
minutes.
    Mr. Payne. Thank you, Madam Chair.
    This question is for Dr. Edelberg. You know, we are in a 
pandemic right now of the unvaccinated. The only way to end the 
pandemic is for more Americans to become fully vaccinated. 
Beyond the health impacts of people not being vaccinated, 
prolonging this pandemic continues to affect all sectors of the 
economy. Amtrak, United Airlines, have already announced that 
employees must be vaccinated or undergo regular testing. These 
and other employer vaccination mandates have proven largely 
successful. However, these requirements only apply to their 
employees, not to passengers. Meanwhile, Canada recently 
announced that all air travelers will have to show proof of a 
COVID vaccine to board an airline, train, or cruise ship.
    If more transit operators, such as railroads or airlines, 
were to adopt vaccine requirements for passengers, would this 
result in more Americans choosing to get the COVID vaccine?
    Ms. Edelberg. Surely requirements to get vaccinated would 
result in more Americans indeed becoming vaccinated. One way in 
which we know that this is mattering is that if the people who 
you are serving--whether it is in a retail store or as a 
transit operator--if the people you are serving are not 
vaccinated, it means you, regardless of your own vaccination 
status, are at a greater risk by working around those people. 
And I think that this is one of the reasons why we have seen a 
frustrating slowness in matching workers with all of these job 
openings. Our vaccine hesitancy is making it unsafe for people 
to work in a lot of these in-person jobs.
    Mr. Payne. Yes. Thank you.
    Mr. Skoutelas, like my previous question, can you explain 
the practical benefits of increased vaccination rates in 
transportation operations across the country?
    Mr. Skoutelas. Yes. Thank you, Congressman.
    Well, first of all, I know that our transit organizations, 
by and large, have really stressed to the workforce the need to 
become vaccinated and have set up onsite vaccination sites, 
transported people to those sites to greatly encourage that, 
and it has been with mixed results. I think, overall, if you 
look at the industry, it is probably a vaccination rate across 
the board that hovers somewhere above 50 percent, but not 
terribly higher than that, so there is a long way still to go 
there.
    Relative to users of the system, for transit, given that 
these are open systems, subway systems, buses, it is very, very 
difficult to be able to enforce that among riders. Certainly, 
to the degree that people protect themselves through a 
vaccination, through a mask, these are all positives in trying 
to keep everybody safe, not only the rider, but also the 
workforce.
    But I would say we have got a long way yet to do in terms 
of educating and encouraging people that this is really an 
imperative for everyone's safety.
    Mr. Payne. Thank you.
    Mr. Regan, frontline workers, especially those working on 
trains, planes, and other transit systems, put themselves in 
harm's way every single day. During the pandemic, it has been 
ongoing. How would a higher vaccination rate among the American 
public better protect frontline workers?
    Mr. Regan. Thank you for your question.
    Certainly, a higher vaccination rate would reduce the risk 
for everybody, whether you are working in the trains, planes, 
or on the buses, or whether you are a passenger. I think 
vaccination is a really important part of getting us through 
this, and I hope that more and more people understand that as 
we continue to bring back our economy, and as more people get 
vaccinated, more of the world is going to open back up to all 
of us.
    Mr. Payne. Thank you.
    And Madam Chair, I yield back 30 seconds.
    Ms. Williams of Georgia. Mr. Perry is now recognized for 5 
minutes.
    Mr. Perry. Thank you much, Madam Chair.
    Dr. Boskin, you stated that funding from the 2009 American 
Recovery and Reinvestment Act increased local construction 
payrolls by 30 cents on the dollar, but had no real effect on 
employment, just higher procurement prices. As a result, the 
Government paid 6.2 percent more on stimulus projects and left 
about $335 million on the table. That is real money where I 
come from.
    How do you think we ensure that future infrastructure 
investments are actually spent on more projects rather than 
wasting taxpayer dollars on higher priced work?
    Mr. Boskin. Well, from the studies I quoted, which are the 
most detailed academic studies of these things by respected 
nonpartisan academics, the basic story is if you throw a lot of 
money in a very short period of time in an area that doesn't 
have a substantial ability to expand production, with new 
firms, or with a big expansion of workers--you can't make many 
of the unemployed today into tower crane or giant excavator 
operators overnight--then that is just going to bid up prices 
and cost. So the thing is to space it out through this cost-
benefit analysis, make sure the sequence of projects 
[inaudible]--of local market [inaudible] enough employees to 
actually get the thing done quickly and on time. And, of 
course, there are all the traditional issues in construction, 
the potential cost overruns. That doesn't just plague the 
public sector. It is probably worse there. And anybody who is 
remodeling their house knows this goes up relative [inaudible]. 
So I think that careful [inaudible] a serious analysis by the 
DOT, or whoever is overseeing this, to make sure that these are 
individual projects that make sense and they are not all 
[inaudible] at one period of time in one or a few places, that 
they respect the fact that [inaudible] supply of workers and 
firms [inaudible].
    Mr. Perry. Hey, Dr. Boskin, if you can stay closer to your 
mic, you kind of cut in and out and it truncates.
    Mr. Boskin. Better?
    Mr. Perry. Yes. I want to move on because you talked about, 
I think with Mr. Burchett, inherently parochial projects 
regarding modes of transportation that are politically popular 
with some of my colleagues, but really have been largely 
rejected by the American people in the marketplace. And 
specifically, I am referring to the massive proposed increase 
in spending on transit and Amtrak, despite the minuscule amount 
of total passenger trips those modes represent and the 
uncertainty surrounding future ridership levels.
    In that vein, what is the long-term economic consequence of 
misallocating significant amounts of Federal resources to said 
parochial projects based on political calculations rather than 
on actual demonstrated demand?
    Mr. Boskin. Well, that could be serious misallocation of 
resources, funds would be wasted, costs could be driven up. You 
miss the opportunity to do other projects that are higher 
return or spend the money on other high-priority public and 
private needs.
    Mr. Perry. And if I might ask, what do you think the risks 
are for providing a one-time infusion of stimulus, as we are 
kind of staring down the barrel of right now in many places, 
funding for capital projects and system expansion, especially 
regarding transit to places like Amtrak or transit agencies 
that really can't even maintain their current systems?
    Mr. Boskin. I think there is a balancing act between 
dealing with agencies and the sectors of the economy that were 
particularly hard hit, that were heavily disrupted, where we 
had to provide a safety net to keep them from total collapse 
and potentially wasting money or assuming that they are all 
going to come back to exactly where they were before and then 
grow happily thereafter. I think you have to do a detailed 
analysis. And certainly, patterns will shift. For example, in 
California, work from home has become a hybrid situation, so 
people going to the office 1 or 2 days a week have become much 
more common, and many of the technology firms are making that 
permanent, not just temporary.
    So I think when you look at what the demand is going to be, 
you have to do that seriously and not just based on fanciful 
numbers.
    Mr. Perry. Hey, just one last question in the remaining 
time. Do you think that the bipartisan infrastructure bill that 
we are potentially voting on today or the proposed 
reconciliation package make the reforms necessary to ensure 
Federal infrastructure investments actually produce a return to 
the taxpayer? I mean, based on what you read about it or heard 
about it?
    Mr. Boskin. Well, from what I have been able to tell, there 
aren't many reforms in them, and there are some requirements 
that are in there that might drive [inaudible] costs. We can 
argue [inaudible] that substantially more will remain to be 
done if this is passed as currently.
    Mr. Perry. Thank you.
    Ms. Williams of Georgia. Mr. Lowenthal is now recognized 
for 5 minutes.
    Mr. Lowenthal. Thank you, Madam Chair.
    I live in the city of Long Beach, and I represent the Port 
of Long Beach, which is the second largest container port in 
terms of volume in the United States. It is immediately 
adjacent to the Port of L.A., which is the largest container 
port in terms of volume in the United States. And these two 
ports, taken together, are among the largest in the world.
    I would like to preface my statement by saying, the Ports 
of L.A. and Long Beach are highly efficient. Both the 
workforce, the ILWU, the terminals, and the terminal operators 
strive to increase their proficiency and their productivity. 
Not saying that there is not more to be done, there is.
    Yet, as I walk down from my house down to the port, or just 
down to the ocean and look out, as far as I can see, I see 
containerships sitting out, waiting to come into the port, 
carrying goods for the rest of the Nation.
    So Dr. Edelberg, in your testimony, your written testimony, 
you mentioned how destruction of the supply chain and 
bottlenecks--and what I am talking about is a major 
bottleneck--as one of the key drivers of temporary increases in 
the price of many consumer goods. This point is a very critical 
point, so I want to spend a little time focusing on it.
    I am sure that many of these disruptions in the supply 
chain, going from the Port of Long Beach to wherever the goods 
will ultimately end up, are simply due to the pandemic, which 
you have pointed out, shifted consumption patterns.
    But it seems to me that a more resilient freight 
infrastructure system could have responded far more effectively 
to these bottlenecks.
    We can make infrastructure investments to strengthen these 
supply chains, and I think that the President, in both the 
reconciliation package and in the infrastructure bill, can help 
accomplish this goal.
    I also believe that the appointment of John Porcari as the 
Port Envoy to the Biden administration Supply Chain Disruptions 
Task Force shows that the administration is taking this 
question seriously.
    I would like you, Dr. Edelberg, to elaborate on how the 
Federal Government can more effectively coordinate and 
strengthen these supply chains.
    Ms. Edelberg. You are absolutely right that we have seen 
massive disruptions in supply chains, and particularly 
disruptions in the movement of containerships around the globe. 
And the underinvestment in ports in the United States has 
exacerbated that, but this is actually a circumstance where we 
can see disruptions in the movement of containerships globally 
having an effect on boosting inflation globally.
    And this is one--if I may, this is one place where we just 
have very clear evidence that the inflationary pressures that 
we are seeing are temporary COVID-related, and it is misguided 
to think that the inflation effects that we are seeing now, the 
inflation pressures that we are seeing now, are largely the 
result of too much fiscal support.
    We are seeing these sorts of supply disruptions around the 
globe, partly from these disruptions in the movement of 
containerships, boosting food and food inflation in particular, 
around the globe, suggesting that when this resolves, inflation 
will come down.
    Mr. Lowenthal. Thank you. I want to add--and I agree with 
you in terms of that global disruption. I want to add one more 
point for you to address. We are also seeing a lack of actual 
empty containers to fill. It is not just the ports themselves, 
it is the containers that are not available.
    We are seeing that the distribution centers, where the 
goods go, they cannot accept any more goods. They are piling 
up. We can see the lack of trains that are coming in. We can 
see problems with demurrage and detention and trucks. So we see 
this as a systemic problem. Can you comment on that?
    Ms. Edelberg. The developments that our economy and the 
global economy has had to absorb over the past 18 months are 
completely unprecedented. So you mentioned the huge spike in 
demand of durable goods and how that has affected supply chains 
all over the globe.
    We did not have nearly a resilient enough supply chain to 
absorb the crazy movements in demand that we have seen over the 
last 18 months.
    Mr. Lowenthal. Thank you. And I yield back and thank you 
for explaining this kind of global problem that is going on.
    Ms. Williams of Georgia. Mr. Westerman is now recognized 
for 5 minutes.
    Mr. Westerman. Thank you, Madam Chair, and thank you to the 
witnesses today. I had another meeting that I was leading that 
started at the same time as this one, so I missed out on the 
early discussion today.
    But you know, I found it ironic that we are having a 
meeting, the title of it, ``Assessing the Federal Government's 
COVID-19 Relief and Response Efforts and Its Impact--Part 2,'' 
very long title, impressive-sounding title, but I would have to 
ask the question, does it even matter what we do in this 
committee, as today we are considering what I believe to be--or 
we are supposed to consider--we were supposed to consider 
earlier this week, the largest infrastructure package, from 
what I can tell, in the history of mankind, a $1.2 trillion 
infrastructure package. And never in a million years would I 
have guessed that there would be the largest infrastructure 
package in history on the House floor for a vote that did not 
come through this committee, that this committee has not had 
one chance to weigh in on that infrastructure bill.
    You know, even if you look at the New Deal, that was a $42 
billion program, which in 2009, that inflation-adjusted amount 
was still less than $700 billion, which was less than the big 
infrastructure program back then.
    But I find it rich that we are having a hearing on 
infrastructure when we actually apparently don't have any say 
in infrastructure in the House Transportation and 
Infrastructure Committee.
    I would just like to ask the panelists if they think it is 
more beneficial or less beneficial if on a massive 
infrastructure package, if we actually go through the committee 
process and pass a House bill, and then go to conference.
    Do you think that is a wiser use of American taxpayer 
dollars, or should we just allow the Senate to write every 
infrastructure bill, and maybe even disband this committee, 
since it apparently has no impact or influence in the process? 
I will open that up to anybody that wants to answer it.
    Mr. Boskin. Well, I will go first. When I was chairman of 
the Council of Economic Advisers for President George H.W. 
Bush, I worked closely with this committee, its analog in the 
Senate, particularly Senator Moynihan, how it eventually became 
ISTEA. Was it perfect? No. But we made some improvements, and I 
think relying on the expertise that people accumulate in the 
committees is potentially very valuable input.
    And for my own viewpoint as a citizen, I would love to see 
the Congress return to more regular order [inaudible] rather 
than these giant omnibus things being negotiated by the 
leadership with little input [inaudible]. I think it would be, 
on balance, despite all the problems and eventual delays that 
might occur, I think on balance that would be an improvement 
most of the time.
    Mr. Westerman. I thank you, Dr. Boskin. I would agree with 
that as well.
    Would any of the other witnesses like to talk about the 
importance of the congressional process in approving massive 
infrastructure packages and how the American taxpayer dollars 
can be used most wisely and effectively?
    Mr. Regan. Sure. I don't think I am in a position to be 
able to speak about congressional process. I think those are 
decisions that are made by the elected leaders and those in the 
various House and the Senate.
    Certainly, as someone who worked in the House of 
Representatives, I believe in the institution, I believe in the 
committee process as well.
    However, what I can comment on fully is that we support 
this bipartisan infrastructure bill, we think it needs to be 
passed. You have the types of investments that we have been 
calling for for decades, in transit, in Amtrak, in roads and 
bridges, that need to be done that are long overdue, and I 
think this is a good product that needs to be seriously 
considered by everyone on both sides of the aisle.
    Mr. Westerman. So if it is a good product, do you think it 
is good enough that it would withstand the rigors of going 
through the committee process in the House?
    Mr. Regan. I believe the entire House has an opportunity to 
make that decision on their own right now.
    Mr. Westerman. We have no opportunity to offer amendments 
or to debate it. It sounds like we are going to have an 
opportunity to possibly vote on it, which personally, I think, 
is a bad move for our country. I think it is a bad process.
    And what I would call on is all Members of the House to 
finally stand up to the Senate and say, we are not going to 
pass this bill just like you sent it over, to reject it when it 
comes to the floor, and bring it to the committee, because we 
are all interested in infrastructure.
    And let's show that this committee actually does matter, 
and the House actually does matter, and that we do care about 
infrastructure, and that we have something to offer.
    And with that, I yield back, Madam Chair.
    Ms. Williams of Georgia. Mr. Carbajal is now recognized for 
5 minutes.
    Mr. Carbajal. Thank you, Madam Chair.
    Dr. Edelberg, recently we have been hearing a lot about our 
national debt, but surprisingly, to me, it seems that it wasn't 
much of an issue of concern during the past 4 years during the 
previous administration's spending. There seems to be selective 
concern and situational about when we are concerned about the 
growing national debt.
    To his credit, Dr. Boskin has acknowledged that, quote, 
``under President Donald Trump, Federal deficits and debt 
remained massive by prosperous peacetime standards,'' unquote.
    As we know, before the COVID-19 pandemic, President Trump 
signed tax cuts into law that grew the national debt by 
trillions, while largely benefiting the wealthiest in our 
country.
    From an economic perspective, can you discuss how good a 
return on investment we got on those tax cuts? Would we be 
better off and get a better return on that investment if we 
repealed some of those massive tax cuts to the wealthy to pay 
for the needed investments in infrastructure, lift children out 
of poverty, and help most working middle-class families get 
their fair share?
    Ms. Edelberg. So there is a lot there. Let me take it in a 
few different points. So, first let me say, with regards to the 
current state of Federal debt and the trajectory of Federal 
debt, one of the places where we had the clearest signal of 
whether or not we have an urgent problem to solve is financial 
markets.
    Financial markets appear to be entirely unperturbed by the 
level of Federal debt. Interest rates are at remarkable lows, 
and expectations for interest rates going forward look like 
they are going to rise to more normal levels but not to levels 
that should create concern.
    So, we should think of our Federal debt problem as a very 
long-term problem that we need to address. These are long-term 
factors that will eventually create unsustainable upward 
pressure on our Federal debt, but this is not a problem that we 
need to urgently face today. And for that, we need to look no 
further than financial markets.
    When it comes to the economic effects of the 2017 Tax Act, 
so CBO estimated at the time that it would have a modestly 
positive effect on the economy. That was largely because of 
stimulative effects because it sent money back to households 
that CBO estimated would, in turn, spend the money.
    The actual positive effects on incentives to invest were 
only a portion of that positive estimated effect that CBO wrote 
about. And indeed, it looks like that is basically what we have 
seen for the last few years, a muted but positive effect on 
investment as a result of the 2017 Tax Act.
    So undoing a portion of the changes made in the 2017 Tax 
Act would have just the opposite effect. It would have a muted 
but negative effect on the incentives to invest.
    But of course, the big question is, what do we do with that 
money? And if, in turn, we choose to take that money and invest 
it in children, invest it in infrastructure, invest it in the 
long-term resiliency of our economy, that is a choice that we 
can make as a society, and I think it makes us stronger.
    Mr. Carbajal. Thank you so much.
    Mr. Ortiz, FEMA has played an important role in making 
COVID-19 vaccines widely available. It provided more than $4.75 
billion in support of vaccination efforts in communities across 
the country and worked with State and local partners to 
establish more than 1,700 vaccination centers.
    Can you discuss briefly, from your perspective, what went 
right, and what are some of the lessons learned to ensure we 
respond better and quicker and more effectively in the future?
    Mr. Ortiz. Thank you. That is a really good question. I 
think what we can say, that this was something that was a very 
large, major effort, brought our country to engagement in this 
past year.
    Probably the biggest thing that was very helpful was how it 
was easier for our communities to get an expedited application 
process to establish vaccinations that facilitated funding 
upfront.
    Our communities across the country are spending money in 
response to this pandemic, and it creates a situation that is 
difficult to be able to sustain these disasters.
    So I think that would probably be the best thing is the 
expedited application process that FEMA put in place.
    Mr. Carbajal. Thank you.
    Madam Chair, I yield back. I am out of time.
    Ms. Williams of Georgia. Mr. Balderson is now recognized 
for 5 minutes.
    Mr. Balderson. Thank you, Madam Chair.
    My first question--I want to thank all of you for being 
here--my first question is for Professor Boskin. Professor, in 
your testimony you note the long-term economic effects of a new 
Federal infrastructure program will not just depend on the 
level of spending, but also on the quality of the projects 
funded and their financing methods.
    Can you expand on this thought and provide any ideas on how 
we can assure that projects are fairly financed, will have 
positive, long-term returns, and benefit our constituents?
    Mr. Boskin. Well, as I said in my testimony, sir, I think 
the most important thing is to apply rigorous--as CBO has also 
said the same thing--rigorous national cost-benefit tests so 
there is a legitimate national purpose where benefits are 
accruing to citizens and the population broadly, not just in 
the local area where you wind up getting a bunch of projects, 
that if the rest of the country pays for it, we are glad to do. 
And then we wind up with massive fiscal cross-hauling where 
people in California are subsidizing other States, and systems 
in other States are subsidizing California, and it creates the 
incentive to have some low national return projects because 
they look good locally because other people are paying a large 
part of the costs. So that would be point number 1.
    Point number 2 is, we traditionally have funded a larger 
and larger share of these with user fees and gasoline taxes and 
more recently, the idea of a vehicle-miles traveled tax to 
account for the fact that we are growing the electric fleet--
which obviously doesn't pay gasoline taxes--would line up the 
benefits received and the payments made so there would be very 
little distortion to the economy.
    And people--the local officials and you in general, this 
committee, and your colleagues in the House and Senate, would 
have to respond to people feeling like they weren't getting 
their money's worth for what was going on. So I think those are 
some of the most important things.
    I think whatever the amount spent is going to be 
[inaudible] probably be the single most important overarching 
thing to do. It is not easy. [inaudible] examples of things 
going wrong. But [inaudible] on balance U.S. rates about 5 
percent [inaudible].
    Mr. Balderson. OK. Unfortunately, we were having some 
technical difficulties there, Professor. I will do a followup. 
I didn't hear the last part of your answer.
    But would you agree that the current Federal permitting and 
environmental review process, which can delay projects by over 
a decade, are a poor use of Federal and State resources?
    Mr. Boskin. Absolutely. I think streamlining that process 
would be one of the single best things we could do to reduce 
costs, target efficiency, make sure we find what we actually 
spend money on is actually relevant at the time, rather than 
decades' old demand.
    And we are much worse than most of the rest of the world in 
this regard.
    Mr. Balderson. Thank you. Professor Boskin, in your 
testimony, you also mentioned your concerns that inflation 
risks are rising, a trend that more deficit finance spending 
will only accelerate.
    Can you give us a general overview of what a $3.5 trillion 
Federal spending bill, which would likely add trillions of 
dollars to the debt, could mean to inflation and our economy?
    Mr. Boskin. Well, of course it is going to depend on the 
particulars and especially the timeframe at which it is 
introduced and what else is done. But if we add this 
substantial amount in the short run, when we have this 
inflation, we risk [inaudible] more of an inflation expectation 
which can become a self-fulfilling prophecy as we have seen in 
our history.
    I would add that while I generally agree with the comments 
that Wendy made, I do want to emphasize that financial markets 
have often been badly wrong. They never got to expect the 
inflation of the 1970s, they badly misunderstood the 
disinflation of the 1980s, and as recently as when the Federal 
Reserve lowered its target interest rate to zero in response to 
the Great Recession and financial crisis in December of 2008, 
financial markets expected it to stay there at 9 months. It 
stayed there for 7 years.
    So while I think there is little indication in financial 
markets that there is a big concern now, that could change 
quickly, and we ought to keep that risk in mind. It is not the 
only thing we should keep in mind. We should keep that risk in 
mind as well.
    Mr. Balderson. Thank you, Professor.
    Madam Chairwoman, I yield back my remaining time.
    Ms. Williams of Georgia. Mr. Stanton is now recognized for 
5 minutes.
    Mr. Stanton. Thank you, Madam Chair.
    My first question is for Mr. Ortiz. Early on in the 
pandemic, there were many reports of State and local emergency 
managers alleging that their orders for emergency supplies were 
getting redirected and not getting to the correct recipients. 
GAO found this in their audit work as well.
    They reported that States sometimes had trouble confirming 
that the supplies provided by FEMA were shipped to the right 
entities, like hospitals and nursing homes, and that the 
supplies were the right ones and in usable condition.
    I want to get your thoughts on that. Why do you think FEMA 
initially responded in such a poor manner overall? What was 
your own experience in getting supplies from FEMA? Any ideas 
that you have for positive changes that could be made to 
improve FEMA's response time to communities in need in the 
future?
    Mr. Ortiz. Yes, thank you. That is a really good question. 
Let me start with what I think is the biggest thing we can do 
as a country in order to improve our capabilities.
    When we are dealing with the supply chain management, the 
issue is, we can't wait. The need is here, is present at this 
point in time. And we need to be able to access local resources 
and supplies that are available to our local region. So the 
support of the establishment of local stockpiles, local staging 
areas, connecting more quickly and faster response to the 
emergencies, especially in a pandemic, is critical.
    That can allow us to create a bridge to allow for the 
supply chain management to catch up, and to allow all these 
other issues that we are discussing in this committee, to allow 
for the additional supplies that may be sourced from different 
locations to really catch up and be able to build that proper 
response.
    That was the biggest challenge that we had. It created a 
situation where communities were having to basically compete 
with each other. And as the example that I presented earlier, 
you end up where you are not only competing with other 
communities, you are competing with your own State or with 
other States and, even to a certain point, with the Federal 
Government.
    And that ends up resulting in a more expensive response 
because of price increases that at the end of the day is going 
to be a higher cost to the taxpayers.
    Mr. Stanton. Thank you very much.
    This next question is for Mr. Skoutelas. We know that 
public ridership fell during the height of the pandemic. Too 
many people were unemployed or working from home, shelter-in-
place orders, et cetera. And so, I just want to get your take 
on this balancing act now.
    How are transit operators balancing fiscal constraints with 
the need to ramp up service to match passenger demand, and how 
does it vary from transit agency to transit agency?
    Mr. Skoutelas. Yeah, thank you very much for that question. 
It really is right on the mark relative to the challenge that 
these agencies are facing.
    On the one hand, the communities, by and large, are 
expecting them to provide the level of service that they have 
been accustomed to, so that there is the pressure to really 
ramp up that service.
    On the other hand, just matching the demand that is there 
is the other part of the equation. And overlaid on top of that, 
of course, is the national workforce shortage issue that 
everyone is facing and every industry, and certainly it is in 
the transit industry as well.
    I mentioned earlier in my remarks that transit now has 
recovered with ridership about 63 percent of what it was pre-
pandemic. So we have seen a steady, kind of gradual increase in 
that.
    We would expect that to continue, and our agencies now 
really are looking to modify their services--many have already 
done that--providing services where they know the demand is 
greater, trying to be as efficient as they can be. And I would 
expect that is going to continue over the next 18 months or 
more as they get back to some degree of normality.
    Our forecast is that we are going to see by the surveys 
that we have done, that across the board, we will have achieved 
as an industry, about an 80-percent recovery level in terms of 
ridership by the end of next year.
    Mr. Stanton. That is great. My next question was going to 
be about changes in commuter patterns, but you addressed that 
in your answer. I appreciate it very much.
    Madam Chair, I yield back.
    Ms. Williams of Georgia. Mrs. Steel is now recognized for 5 
minutes.
    Mrs. Steel. Thank you, Chairman DeFazio and Ranking Member 
Graves, for hosting this hearing, and I want to thank the 
witnesses for participating.
    The COVID-19 pandemic has greatly impacted all of us and 
our local communities. Transportation and infrastructure 
projects faced sharp drops in economic growth and employment. 
Supply chain disruptions have increased, leading to further 
delays on important projects.
    It is important we continue to support policies that help 
economic recovery, while also ensuring that our national debt 
does not continue to soar, leaving future generations to pay 
high taxes and bankrupting many important Federal programs in 
the next few years.
    Inflation fueled by excess Government spending continues to 
hit my constituents at the gas pump and at the grocery stores. 
In Europe, for example, inflation has almost gone up 1 percent 
in just a single month. I bring this up as Secretary Buttigieg 
has previously claimed that the ``American dream'' is now in 
Denmark.
    Meanwhile, there is growing concerns on this committee 
regarding the administration's spending proposals and the 
effects they will have on our constituents.
    Some have argued that deficits don't really matter and we 
should continue to build up debt. Having said that, I have 
questions for Dr. Boskin.
    Dr. Boskin, as we try to adequately respond to the COVID-19 
crisis, what will happen to the transportation and 
infrastructure industry should we continue to go down a 
continued path of accelerating deficit spending? Historically, 
what has this strategy shown us?
    Mr. Boskin. Historically, it often has led to problems down 
the road. Sometimes these wind up in an abrupt financial 
crisis. More generally, I think, the bigger risk is that it 
will slow growth over time, particularly when you add not only 
the high level of the debt anticipating adding to it now, but 
the additional debt that is going to become--that is 
represented by the unfunded liabilities of Social Security and 
Medicare that are coming due.
    So we are going to be--we are going to have a big fiscal 
year challenge in dealing with those in the coming decade, 
quite aside from adding this on. So I think it adds to the risk 
considerably.
    Mrs. Steel. Thank you, Dr. Boskin. I have another question. 
I appreciate you using the California high-speed rail 
boondoggle as an example of a project that lacks support and 
has tripled in cost estimate. I introduced the Stop the High-
Speed Money Pit Act to prevent more Federal funding to this 
waste of taxpayer dollars.
    With proposals from the administration and numerous 
transportation bills introduced on Capitol Hill to spend even 
more taxpayer dollars, do you believe there is a lack of fiscal 
responsibility on some of these initiatives, and if so, how 
will this affect the taxpayers?
    Mr. Boskin. Well, if there are poor returns, taxpayers will 
be getting a very bad deal and our citizens will be getting a 
very bad deal. With California high-speed rail, I fully 
support--I don't know the details of your bill, ma'am, but I 
think that you are on the right track, that perhaps the single 
best thing with respect to this that this committee could 
insist on is no additional funding for California high-speed 
rail, and let it evaporate as it should.
    That would be good for California, good for the rest of the 
country, and actually probably the single best thing they could 
do for the legacies of Governor Newsom and Governor Brown, 
would be to kill the project.
    Mrs. Steel. Thank you, Doctor. I have one last question. 
The transportation bill is important for all of us that are in 
infrastructure jobs and trade. In this important sector and to 
rebound from the pandemic, what areas of transportation do you 
think the committee should focus on in this Congress?
    Mr. Boskin. Is that addressed to me?
    Mrs. Steel. Yes.
    Mr. Boskin. I think you should start with primary focus on 
traditional infrastructure and doing that well. Build-outs of 
these other areas that sound good, but have--we don't have 
experience in pouring a lot of money in and getting good 
returns.
    Whether that is early this or education that, et cetera, I 
think those are fairly risky, and I would suggest for those who 
support these things, let's do some pilot projects first and 
see how they pan out. If they work, [inaudible].
    Mrs. Steel. Thank you very much, Dr. Boskin, and that is 
what I wanted to hear, and I yield back.
    Ms. Williams of Georgia. Mr. Garcia is now recognized for 5 
minutes.
    Mr. Garcia of Illinois. Thank you, Madam Chair, and thank 
Chair DeFazio for holding this hearing.
    As a former union member and someone who represents a 
predominantly working-class district in Chicago, I have fought 
throughout the pandemic for the workers impacted by COVID-19, 
both from a health and economic perspective.
    Millions of working Americans lost their jobs while many 
frontline workers, like transit workers, had to go through the 
pandemic, and some sadly died from COVID. The pandemic has had 
a disproportionate effect on working men and women, especially 
Black and Brown communities, and we must keep in mind as 
Congress continues to respond to the pandemic. I thank the 
witnesses for appearing today.
    Mr. Regan, you highlight in your testimony the lack of 
action by the Trump administration to protect workers from 
COVID-19 unfortunately cost some workers their lives.
    Thankfully, the Biden administration has implemented some 
commonsense policies, like a Federal mask mandate and increased 
access to vaccines.
    While we continue to do everything to protect workers, what 
additional policies should Congress consider or the Biden 
administration should implement that can make sure that 
transportation workers are protected from COVID-19?
    Mr. Regan. Thank you, Congressman, for your question. One 
thing we have discussed a little bit already today is the 
Transit Worker and Pedestrian Protection Act. That one would 
really help especially busdrivers inside their workspaces, to 
help protect them from COVID-19, especially if they are 
designed correctly.
    I think continuing to have this mask mandate in place 
throughout all modes of transportation would be a really 
welcome development. I know the President does not seem to want 
to lift that anytime soon, but that is proving to be well-
received, and, I think, protective for people.
    But what we also need frankly is to make sure that there is 
support of the employees so they are not being the mask police. 
I think at airports you have a situation that is set up in 
order to make sure that there is an existing law enforcement 
present, so that it is not going to be entirely on gate agents 
or flight attendants. But even there we are seeing problems.
    So whether it has been the increased fines you see onboard 
aircraft, whether that type of situation needs to be applied in 
other areas of transportation, I think these are things that 
the administration and Congress needs to look at.
    Mr. Garcia of Illinois. Mr. Regan, so it took a while for 
Congress to implement protections against Amtrak furloughing--
and you underscored it in your testimony--its workers in 
assistance to Congress provided for Amtrak.
    This follows many worker issues we have dealt with over the 
years on Amtrak, including call center closures and the end of 
dining car service.
    As we look at the future, what additional protections does 
Congress need to consider to make sure that workers at Amtrak 
are protected?
    Mr. Regan. Yes, thank you for that. The way that increasing 
the aid that went to Amtrak--yeah, the labor protections got 
better and better. Whether it be a commitment that they need to 
bring back furloughed employees and then ultimately they 
required them to return furloughed employees and retain 
services.
    Certainly, we should have limitations to the amount of 
outsourcing that Amtrak can do for their existing services. 
Right now, that seems to be the way they deal with a problem 
they don't know how to solve, is to outsource that work to 
somebody else, where it usually is nonunion labor, and the 
wages and benefits are dramatically slashed when they do that. 
So we should constantly be looking at ways to build up Amtrak 
and its workforce at the same time.
    Mr. Garcia of Illinois. Thank you.
    And for Ms. Edelberg, you mentioned in your testimony that 
you see no compelling reason for the cancellation of 
unemployment insurance benefits. Can you expand on why ending 
unemployment benefits early causes financial hardship for so 
many people?
    Ms. Edelberg. It always is an unforced error when Congress 
puts calendar date cutoffs into legislation when providing 
fiscal support. So whether it is--excuse me--households or 
businesses, and even worse, abruptly canceling benefits, so it 
would have been far better to tie those benefits, the expansion 
and extension of unemployment insurance benefits, to the state 
of the labor market, and in particular, the state of local 
labor markets.
    That is a concern now as we see the Delta variant can surge 
through communities and put in peril the labor market recovery.
    So yes, it gives me concern that now about 5\1/2\ million 
unemployed people who are actively looking for work no longer 
have any access to unemployment insurance benefits.
    Mr. Garcia of Illinois. Thank you very much, Madam Chair. I 
yield back.
    Ms. Williams of Georgia. Miss Gonzalez-Colon is now 
recognized for 5 minutes.
    Miss Gonzalez-Colon. Thank you, Madam Chair.
    My question will be, the first one, to Mr. Skoutelas, and 
this is a question that actually I have related to because of 
the situation with FEMA on the island and the money that has 
been approved and the money that is unused yet.
    You said in your testimony that $69.5 billion in funding 
was provided by Congress for transit during the COVID pandemic. 
However, at this time, only 56 percent has been spent, which 
means almost $39 billion. Do you think the rest of the funding 
is going to be needed or not?
    Mr. Skoutelas. Yes, thank you, Congresswoman, for that 
question. Based on the economic forecast that we had conducted, 
that was conducted on our behalf for the industry, we had 
forecast that those resources would be needed to carry the 
industry through calendar year 2023, so taking us really to 
January of 2024.
    So a good percentage, as you mentioned, of these resources, 
have already been obligated--almost all of the CARES Act, half 
of the CRRSAA Act, and more than one-quarter of the most 
recent, the American Rescue Plan.
    And our agencies, the industry, is really parceling out 
those dollars so that they can continue to operate services 
while ridership comes back. And, again, our forecasts, while 
they are subject certainly to change because of evolving 
conditions, it does appear that they are going to need those 
resources to carry them through being able to come back in some 
kind of a normal fashion roughly at the end of 2023.
    Miss Gonzalez-Colon. Given that money that has already been 
obligated, do you think that the transit agencies may need the 
additional $10 billion from the Build Back Better, given that 
there is still a lot of funding that is unspent from the 
supplementals of COVID?
    Mr. Skoutelas. Yeah, thank you for that question, because 
really those dollars are intended for different purposes. The 
three tranches of emergency funding were for operations--to 
sustain and stabilize operations.
    The $10 billion in the Build Back Better Act really is the 
shortfall that we saw in the bipartisan agreement for 
infrastructure, originally proposing a $49 billion increase for 
transit, which was reduced to $39 billion. So we see that $10 
billion as really making up for that shortfall, which would all 
go to capital dollars, as we understand it, to support transit 
access to affordable housing.
    Miss Gonzalez-Colon. Thank you. I would love to make a 
question to Mr. Ortiz, and this is something regarding the 
emergency management about FEMA. You said in your testimony 
that FEMA recaptures disaster funds based on some violations of 
procedural rules, or even other principles.
    Do you mind providing exact examples of what you are 
talking about? Because we are facing some of--kind of this down 
in Puerto Rico as well. Although FEMA has been engaging with 
the stakeholders to manage it. So I would love to know, what 
specific situations are you referring to?
    Mr. Ortiz. Yes. And I can give you a little bit more 
specific situations, but as a whole, we agree that FEMA has 
that ability that was passed to them under the 2018 act, the 
ability for them to recoup those funds. But the way they are 
doing it in certain situations, it creates a confrontational 
relationship, where instead of focusing on the adequate 
response to ensure that the programs necessary to ensure that 
the need resulting from the disaster gets addressed, creates a 
confrontational relationship where it may hinder or slow down 
the response efforts by a local community, because they are 
afraid to engage because of fear of overextending themselves 
and not be able to be reimbursed because FEMA may ask for those 
funds in return.
    I think what we want to be able to do is create an 
environment where it is a team effort, both at the Federal, 
State, and local level, in order to ensure that decisions are 
made early and upfront, and make sure that we are transparent 
in the process to prevent situations where there may be 
misunderstandings or abuse of funds that are being utilized in 
response. And also, at the same time, expedite the response as 
fast as we possibly can.
    We are all working together. We all are working towards the 
same common goal. But in certain situations, FEMA, they put 
themselves in a situation where they are more of an enforcement 
side versus from a partnership side.
    Miss Gonzalez-Colon. Thank you.
    I yield back, Madam Chair.
    Ms. Williams of Georgia. Mr. Carter is now recognized for 5 
minutes.
    Mr. Carter of Louisiana. Madam Chair, thank you for the 
opportunity. My question is for Dr. Edelberg.
    The New York Times reported this summer that States were 
working to cut off Federal pandemic unemployment benefits for 
their residents, saying that the unemployment benefits are 
discouraging people from looking for work at a time when small 
businesses are having difficulty hiring workers.
    In my estimation, Dr. Edelberg, that has been quite the 
contrary, that people--the notion that unemployment benefits 
are so high that people don't want to work, I think is a 
ridiculous thought, particularly when juxtaposed with the 
option that a person has to work for $7.25 an hour, a meager, 
meager minimum wage.
    Instead of looking at questioning if unemployment is too 
high, perhaps we should really focus on the fact that minimum 
wage is way too low. Thoughts?
    Ms. Edelberg. Let me say a couple of things. So first we 
now have a lot of preliminary evidence that economists have 
gathered about what the effect on employment gains has been 
from abruptly cutting off these benefits across the country, 
and the evidence is even more compelling because we have this 
natural experiment of the benefits being cut off in different 
States in different times.
    The punch line is that so far we have no compelling 
evidence that cutting off the benefits changed aggregate 
trajectories of what we are seeing in employment gains in any 
of these localities. And so, that is the first fact.
    The other is that we obviously know that the increases in 
labor supply have fallen short of the increases in labor 
demand. Job openings are at record high rates, but at the same 
time, we are seeing quits with record high rates, and we are 
still seeing that firms are laying off workers.
    This is all to say, there is a massive amount of churn in 
the labor market right now, and The Hamilton Project just had 
an event yesterday where Betsey Stevenson made an excellent 
point, from the University of Michigan. People are going back 
to work, but they are demanding that work be done on different 
terms than before the pandemic.
    They want more flexibility. They want higher wages. They 
want to be compensated for the risks they are taking if their 
face-to-face service sector jobs are now dangerous because of 
the pandemic. And they want more flexibility, to be able to 
work from home.
    So, we are seeing big changes in the labor market, but--and 
I know I am going on too long, but these have also been made 
possible by the fiscal support that the Government provided. 
People are no longer financially utterly desperate, and that is 
a good thing. That is not a bad thing. That is a good thing.
    Mr. Carter of Louisiana. And it speaks to the fact that we 
still have people that are women with children, families with 
children, caring for the aged or people that need additional 
care. And we know that eldercare is terribly expensive. We know 
that childcare is terribly expensive.
    Let me ask you: Is there any empirical data as an expert, 
as an economist, any research that has been done on this topic, 
that is: an impact of expanded unemployment benefits to the 
labor force and its participation?
    Ms. Edelberg. So we do have a fair amount of evidence that 
suggests that more generous unemployment insurance benefits do 
slow down the rate of job matching. They make workers choosier 
about taking which job to get, but that is not altogether a bad 
thing.
    You want unemployment insurance benefits to allow people to 
find the best, most productive match, find a job that has a 
really good job ladder of career advancement.
    So yes, we have evidence that unemployment insurance 
benefits modestly dampen job matching, but in a way that I 
think the policy, you know----
    Mr. Carter of Louisiana. And that is probably--and I 
apologize, I am trying to get through this real quickly. But in 
large, would you agree that when given the option of having to 
face all the factors that are out there, like expanded expenses 
for childcare and eldercare and those other issues that 
families face, a $7.25 minimum wage is hardly a living wage?
    Ms. Edelberg. One thing I will say is that with all of the 
mismatches we are seeing and the strength and labor demand that 
we are seeing, that the private market is raising wages in a 
way that the Federal Government couldn't manage. We are 
starting to see really welcome growth in wages at the bottom of 
the distribution.
    Mr. Carter of Louisiana. Can you expand--I am going to 
switch real quickly. I am going to stay with you, Dr. 
Edelberg----
    Ms. Williams of Georgia. The gentleman's time is expired.
    Mr. Carter of Louisiana. I yield. Thank you.
    Ms. Williams of Georgia. Mr. Guest is now recognized for 5 
minutes.
    Mr. Guest. Thank you, Madam Chairman.
    Dr. Edelberg, I want to kind of expand a little bit and 
follow up on what Representative Carter was just referring to. 
In looking at your report that was issued prior to your 
testimony, you did talk a little bit about enhanced 
unemployment insurance, and I think you told Representative 
Carter that enhanced unemployment insurance does, to some 
extent, slow down job matching.
    You also, on page 12 of your report, you talk about 
unemployment today, that we have a record number of openings. 
You even say that this is the highest since 2000, which was the 
earliest data available.
    We talk again about the slowness of job matching, the 
depressed level of labor force participation, and the record 
number of individuals who have quit their job and are looking 
at moving or transitioning.
    We know across many employment sectors and industry, we are 
hearing that hiring is really the number one concern and has 
contributed to supply chain effects that have been felt across 
our economy.
    I want to turn to a little bit about the potential impact 
that vaccine mandates may have on that. And just so you will 
know, I have been vaccinated, my family has been vaccinated. 
Back home, I have done public service announcements encouraging 
people to be vaccinated. But I do know because I talk to people 
that there are still individuals that have concerns about the 
safety of vaccinations.
    And so we know that President Biden earlier this month 
spoke of an Executive order that would require vaccines for 
Federal employees, particularly those that are employed in 
healthcare facilities, being Medicare and Medicaid.
    He also talked about testing or vaccination for private-
sector employers that employ more than 100 individuals.
    And we have seen individual States, particularly the State 
of New York, that have recently applied either laws that would 
affect either specific industries or the State employment as a 
whole.
    And I specifically want to talk about unvaccinated 
healthcare workers. As we look, we see that recent media 
reports have shown that New York hospitals have begun firing or 
suspending healthcare workers for defying a State order to get 
the COVID-19 vaccination.
    Recent local media reports said that New York City 
healthcare officials said that upward of 5,000 employees in the 
city's public hospital systems were not vaccinated. We know 
that that 5,000 represents 12 percent of the 43,000 workers in 
the public healthcare network.
    In the entire State, if you expand it out from New York 
City to New York State, 16 percent are unvaccinated.
    The Washington Post reported earlier this month that an 
upstate New York hospital was going to stop delivering babies. 
We also know of reports of surgeries being delayed or 
cancelled.
    And so my question to you is that, in light of our current 
economic situation that has left employers currently struggling 
to find workers to take many of these positions, even in cases 
where they have raised employment wages, where they have 
offered signing bonuses, where they are offering flexible 
hours, can you speak to the effect that a Federal vaccine 
mandate will have on the current trend of job openings, and the 
trend that we are seeing of more individuals who are quitting 
their job?
    Ms. Edelberg. I think there are two competing effects here. 
One is the effect of having it as easy to work as possible. So 
it is fewer requirements, the highest wage, access to 
childcare. All of those things make it easier to work. You 
know, if you don't have a vaccine mandate, if it is OK if you 
haven't been vaccinated against measles, if it is OK if you 
haven't been vaccinated against polio. The fewer requirements 
we put, yes, we make it easier for people to work.
    On the other side of the equation, though, is that we have 
seen that there is a lot of hesitancy among people to go to 
work if they fear for their health. And where we are seeing a 
lot more hesitancy is in these in-person, service-sector jobs.
    And so, the more we put those people's minds at ease that 
it is safe for them to work, we should see that dominate and 
actually greater labor force participation instead of less.
    Mr. Guest. Well, and my concern, Dr. Edelberg, is 
particularly in the field of healthcare, of education, and now 
we are seeing law enforcement, that we are going to have 
individuals who are experienced in their field, who are going 
to no longer feel like--and, in many cases, they are not 
legally going to be able to continue to work, and I think that 
that is very dangerous as we are seeing the trend that we are 
seeing in the unemployment.
    And so Madam Chairman, I think I am out of time so I will 
yield back.
    Ms. Williams of Georgia. Mr. Brown is now recognized for 5 
minutes.
    Mr. Brown of Maryland. Thank you, Madam Chair. I want to 
thank the panelists for a very enlightening discussion. Thank 
you for your responsiveness to all the questions asked by each 
of the Members.
    Look, it is critical that we examine ways to improve 
oversight of the COVID-19 pandemic relief funds while also 
evaluating the significant impacts that these relief efforts 
have had on supporting sectors across the country and the 
economy.
    And we are focusing today, I think, mostly on the 
transportation sector and its workforce. Nationally, transit 
ridership in 2020 was down an historic 79 percent at the start 
of the pandemic compared to 2019 levels.
    However, when the pandemic hit, public transportation 
systems really didn't miss a beat, certainly not in my 
congressional district and supporting my constituents. Systems, 
like the Washington Metropolitan Area Transit Authority--we all 
know it as Metro--continued to bring healthcare professionals 
to the front lines, allowing folks to go to the grocery store, 
pick up prescription drugs, connected other essential workers 
through their place of work.
    Prior to the pandemic, transit agencies collectively spent 
less than 0.5 percent of their budgets on workforce 
development. I believe it is imperative that we take these 
lessons learned and focus on preparing our essential transit 
workers to ensure they have the tools to meet the challenges of 
tomorrow.
    I have got a bill in that does that, that addresses these 
workforce development issues, by establishing the National 
Transit Frontline Training Center. So, I believe that this is 
needed now more than ever after witnessing the impacts that the 
pandemic has had on our transit workers.
    So Mr. Regan, let me ask you this: As these transit systems 
come out of the pandemic and adopt new equipment and practices, 
what level of investment is needed to prepare our workers for 
the next generation of transit jobs, and how can a national 
transit workforce training center better prepare transit 
frontline workers for the post-COVID world?
    Mr. Regan. Thank you for the question and thank you for 
your leadership on this issue. Right now, there is virtually no 
dedicated money for transit workforce training. We fought 
through the appropriations process for years to try to address 
that, but having a dedicated funding stream will be a huge 
impact and make sure that we have the best prepared workforce 
in our transit sector.
    A centralized workforce training center, one that is a 
joint labor and management effort, such as the one that you 
have championed, allows labor and management to work together 
cooperatively to identify new technologies, new trends in 
public transportation, outstanding training needs and skills 
gaps, tools for better retention, and good transit jobs.
    As we move from our current fleet to EVs, for example, or 
implement driver assistance technologies, workforce training 
can provide evidence-based training materials and engage in 
activities, like train the trainer, to ensure a smooth rollout 
of these new technologies, and one that includes worker voice 
of how and when these technologies are implemented, we think is 
a vitally important thing. And again, I can't thank you enough 
for your leadership here.
    Mr. Brown of Maryland. Well, thank you.
    Dr. Boskin, I think that Chairman DeFazio asked you this. I 
kind of had something else going on in my ear so I apologize 
for being redundant in my question, but can you just say again, 
what are the risks associated with not raising or suspending 
the debt ceiling on October 18th, assuming for the purposes of 
my question that October 18th is the date that the U.S. 
Treasury has exhausted its extraordinary measures to meet our 
obligation? What are the associated risks?
    Mr. Boskin. Well, I think there would be--in the short 
term, there would a considerable disruption in the financial 
markets. And if it wasn't more or less instantly resolved, that 
could spread to the real economy and injure the economy.
    Mr. Brown of Maryland. I know that you are a tax and budget 
and policy expert and that you dedicated a lot of time to 
reviewing the works of other economists. In your opinion, and 
also that of sort of the literature you review of economists, 
is a debt ceiling--and the United States is one of the few 
countries that actually have a debt ceiling. I think Denmark is 
another one, and it is in the stratosphere. Is a debt ceiling 
limit an effective way to manage debt?
    Mr. Boskin. Well, I think the idea of having a debt ceiling 
was, obviously, to put some pressure to not raise it; but, 
obviously, in the end we wound up raising it anyway. So I think 
it is hard to say what the debt would be if we never had it.
    I think more generally when Congress has tried to put 
various constraints on itself [inaudible].
    Ms. Williams of Georgia. The gentleman's time has expired.
    Mr. Brown of Maryland. Thank you, Dr. Boskin.
    Thank you, Madam Chair.
    Ms. Williams of Georgia. I now recognize myself for 5 
minutes.
    My district is home to the Nation's busiest airport and one 
of our Nation's busiest rapid transit systems. It goes without 
saying that I have a lot of constituents working in the 
transportation sector. The pandemic has hit all of these 
constituents really hard, but what has been particularly 
alarming is how much it has disparately impacted groups. In 
July 2020, unemployment among female transportation workers 
reached a record of 26.2 percent. This is over 10 percent 
higher than the overall industry unemployment rate at that 
time, which was still way too high.
    Transportation employment is coming back, but it has not 
fully recovered yet. As recovery proceeds, we have to ensure 
that it is equitable.
    Ms. Edelberg, how could factors, like increasing the 
accessibility of quality affordable childcare, help combat 
disparities in employing transportation workers?
    Ms. Edelberg. Oh, absolutely. And we have a great deal of 
evidence that increasing access to affordable and high-quality 
childcare, access to family and medical leave, stable housing, 
we have so much evidence that these policies make our economy 
more resilient, make our labor force more resilient.
    I keep hearing over the course of this hearing about how we 
need to hear more evidence. We have the evidence that these 
programs work.
    Ms. Williams of Georgia. Thank you.
    Last week in the Aviation Subcommittee, we also heard how 
air rage affects workers' safety, but this kind of rage could 
also affect the recovery of the transportation sector at large.
    Mr. Regan, if we can stop rising incidents of rage and 
assaults across modes of transportation, what boost could that 
provide to the transportation sector's labor participation and 
passengers' willingness to travel?
    Mr. Regan. I think it would be a massive boost. Certainly, 
people hear all of these stories about busdrivers and flight 
attendants being assaulted. They see the images onboard trains 
of people acting out. That is going to suppress the demand to 
travel for a lot of people. And it is also, more importantly, 
going to suppress the demand for people to enter these 
professions and work in these jobs, despite the fact that they 
are, by and large, good union jobs with decent wages and good 
benefits.
    So, I think it is a really serious issue we need to deal 
with, both from a labor perspective and from an economic demand 
perspective.
    Ms. Williams of Georgia. Also, Mr. Regan, in your testimony 
you mentioned that Federal assistance has been vital for the 
transportation sector. As Congress works to make 
transformational investments in our Nation's infrastructure and 
people, what specific investments are most important to ensure 
the transportation sector recovers, employs more individuals, 
and actually builds back better?
    Mr. Regan. Thank you.
    The investments in transit, Amtrak, roads and bridges, 
those are all vital to make sure that we have a modern 
infrastructure system that will be competitive throughout the 
world. We need to make sure also that there are strong labor 
protections attached to those. So it will have the added 
economic benefit of making sure that people have more good jobs 
and are able to be more active participants in the economy. So 
things like the Bacon protections, Buy America, 13(c) of the 
Federal Transit Act, all of these, and, certainly, the 
protections that were in the COVID relief bills, extending 
those further, all of these will have the effect of making sure 
we have the greatest economic return for our investment when it 
comes to infrastructure.
    Ms. Williams of Georgia. Thank you.
    And without objection, I would like to insert the 
definition of social justice into the record.
    Without objection, so ordered.
    [The information follows:]

                                 
                     Definition of Social Justice,
            Submitted for the Record by Hon. Nikema Williams
overview
social justice

quick reference
The objective of creating a fair and equal society in which each 
individual matters, their rights are recognized and protected, and 
decisions are made in ways that are fair and honest.

                        Printed from Oxford Reference,  Copyright 
                        Oxford University Press, 2021. All Rights 
                        Reserved.
                        https://www.oxfordreference.com/view/10.1093/
                        oi/authority.20110803
                        100515279?print

    Ms. Williams of Georgia. And I yield back the balance of my 
time.
    Mr. Moulton is now recognized for 5 minutes.
    Mr. Moulton. First of all, I want to just thank all of the 
witnesses for sticking it out. I know this is a long time to be 
staring at a computer screen, and I really appreciate your 
willingness to be here and to help us out.
    I will try to be quick. Dr. Boskin, I just wanted to go to 
you, because earlier you told my friend, Mr. Burchett, that 
high-speed rail funding and reconciliation would be Florida, 
Texas, and Georgia taxpayers paying for California high-speed 
rail. Now, in fact, you chose States that all stand to benefit 
from high-speed rail funding with projects in various stages of 
the pipeline, and you could add to that the Pacific Northwest, 
the Midwest, the Northeast, and the Southwest.
    I am just curious, I mean, would you have told Congress in 
the 1950s not to put forth Federal funding for interstate 
highways when only a small handful of States actually had 
projects that were shovel-ready and ready to go, even though, 
obviously, they would eventually be part of a much broader 
interstate system?
    Mr. Boskin. No. A viable interstate system was important. 
It was first laid out actually by President Hoover, and I think 
under President Eisenhower, the Congress supported it, and I 
think it has been on balance really important.
    It is also important to know that we have probably reached 
diminishing returns in expanding it. It already exists. So, 
yes, if things are primarily localized, they shouldn't be 
funded by taxpayers generally around the country. They should 
be funded by people in the local community, either by user fees 
or congestion charges, which I should have emphasized more in 
my oral testimony--it is in my written testimony--to avoid the 
need for additional capital expenditures where possible.
    But no, of course not. And if there is a viable interstate 
connection that really has broader benefits, then that is 
legitimately partially a Federal responsibility.
    The estimates, I have not seen a more recent one; but the 
estimates that Ed Gramlich, as I mentioned earlier, a President 
Clinton appointee to the Federal Reserve, made of the local 
traffic on the Interstate Highway System was 70 percent. So if 
these systems are important to legitimate benefits accruing 
broadly to the country, if they decongest a port, if they 
really do connect many States and throughput, then that is a 
legitimate avenue for potential Federal funding, absolutely.
    Mr. Moulton. Well, because I think that is exactly what--if 
you look at a high-speed rail analysis across the country, you 
see that a lot of these projects are conceived within States 
like, for example, California high-speed rail between Los 
Angeles and San Francisco. If you look at the Vegas project 
between L.A. and Las Vegas, there is a whole southwest network 
coming out of Phoenix, and they are kind of conceived in these 
500- to 1,000-mile corridors. But what is striking about it is 
the corridors are all contiguous. If you put them together on a 
map, it does, in fact, form a national system. And I think that 
that is something that hasn't been emphasized enough by people 
like myself, frankly, or part of the debate.
    One of the benefits of that is that when you get to a point 
where you can take high-speed rail from Los Angeles to Chicago, 
for example, that is a distance that most people will still 
fly, but it is a great distance for high-speed freight. And as 
we know, there is a lot of business there, everyone ordering 
things on Amazon and all these days, and it would be far more 
efficient and also a tremendous revenue source for these 
systems once they are built.
    We transferred $158 billion in general funds, not user 
fees, to the Highway Trust Fund since 2008. So, clearly, we 
have a user fee issue there, but I think we certainly want to 
get to a point where people see the benefits, both locally and 
nationally, with high-speed rail. And I think, if anything, I 
take away from your testimony that we need to make that case 
more convincingly.
    One of the facts of the California system that I actually 
got into at Harvard Business School doing a financial analysis 
of the proposal is that even with the cost overruns, which 
there absolutely have been, no question, it is still less 
expensive than meeting 2050 transportation demand by expanding 
airports or expanding highways in the State. But then, you also 
get these accessory benefits where you have additional capacity 
at 2050 that wouldn't exist from the alternatives.
    So at the end of the day, we should be taking an economic 
lens to these projects and looking at their full economic 
returns, but not just looking at them in a vacuum, recognizing 
they could be part of the Federal system, and also recognizing 
how they compare to alternative ways to meet transportation 
demands.
    So appreciate that very much and thank you.
    I yield back.
    Ms. Williams of Georgia. Mr. Auchincloss is now recognized 
for 5 minutes.
    Mr. Auchincloss. Thank you, Madam Chair.
    To the witnesses, I appreciate your patience and 
persistence over a long day.
    Mr. Skoutelas, I wanted to ask you about the use of 
American Rescue Plan funds by State transit agencies. The 
American Rescue Plan wasn't just about getting shots into arms. 
It wasn't just about putting money directly into the pockets of 
people who were impacted by the recession. It was also, in some 
ways, an infrastructure bill. It provided significant sums to 
State and local agencies with the intention being they had 
relatively wide discretion to spend those moneys over the next 
3 years on capital improvements.
    One of the frustrations I have had over the last 6 months, 
though, is seeing that some of the State transit agencies are 
expressing doubts about how much latitude they actually have to 
spend ARPA funds on ADA improvements to our commuter rail 
stations, on improving service and reliability of light rail in 
Greater Boston.
    Can you speak to what advice you are giving to your 
constituencies on that issue?
    Mr. Skoutelas. Sure. Thank you for that question.
    Well, first and foremost, the major thrust of dollars and 
resources from the American Rescue Plan was really to continue 
to provide operating dollars to the agencies to keep them 
operating through this pandemic. While the definition also 
provided that if they were--they had an adequate amount to 
continue with those operations and----
    Mr. Auchincloss. Mr. Skoutelas, I apologize. Your volume is 
not coming in.
    Mr. Skoutelas. OK. I am sorry.
    The other aspect of the rescue plan funds was to provide 
the ability to be able to use those for some capital 
improvements provided that they first met the operating needs, 
meaning keeping their workforce intact, operating service 
levels that were necessary for their communities.
    So what we are seeing is that the great majority of 
agencies are using those dollars and need those dollars for 
operating purposes to continue to operate, and that is the 
guidance that I think--and feedback that we get as we talk to 
the agencies. It doesn't preclude an individual capital 
improvement if they can do it, but it has to be within the 
context of continuing operations.
    Mr. Auchincloss. Can we work with your office as we talk to 
State agencies on encouraging them to--as you say, as they 
account for operating expenses to also be looking at capital 
improvements?
    Mr. Skoutelas. I certainly would be very happy to engage 
with you on this and any other related topics.
    Mr. Auchincloss. I appreciate that. I know that many of my 
constituents have been looking for improvements to the commuter 
rail and to the Green Line that ARPA presents a once-in-a-
generation opportunity to invest in, and I would like to do 
that.
    Mr. Skoutelas. May I add one point to that?
    Mr. Auchincloss. Yes.
    Mr. Skoutelas. It really underscores the need to pass the 
Infrastructure Investment and Jobs Act that is before you, 
which really would provide additional investment for public 
transit, as well as the highway system. That is really where 
the capital dollars reside and would be very much needed to 
continue the modernization of our transit and commuter rail 
systems.
    Mr. Auchincloss. You also mentioned operating expenses. And 
one of the ways operating expenses are paid for is through 
fares. These fares, though, when accounted for the costs of 
administering and enforcing them really are a marginal part of 
the operating revenues for the T and the commuter station in 
Massachusetts, and I have been a strong proponent of the Free 
the T movement, where we really zero out fares for MBTA and 
commuter rail service.
    I want to open up this to the panel, but especially Dr. 
Edelberg and Dr. Boskin, if you have thoughts for how zeroing 
out fares might induce more ridership, and actually might, at a 
social level, save money by reducing congestion.
    Mr. Boskin. Well, I would think if you are zeroing out 
fares in off-peak times, that would perhaps make sense. So it 
would shift people from congested times to less congested 
times. Generally lowering the cost to somebody increases their 
demand for the service, which, if it was done in peak times 
would increase congestion, so I think----
    Mr. Auchincloss. Dr. Boskin, I will reclaim my time. I want 
to give Dr. Edelberg a chance to respond as well in 40 seconds.
    Ms. Edelberg. Yes, absolutely.
    So we know that--I mean, I think what Dr. Boskin has in 
mind is that you want to charge people during congested times 
so that they absorb some of the cost, they factor in some of 
that cost when making that decision about when to ride. And 
that is where I think you are effective and efficient because 
they align all of the incentives correctly. However, first you 
have to make sure, you know, it creates all of these 
complications with how people are doing the comparison to other 
forms of transportation----
    Mr. Auchincloss. Right.
    Ms. Edelberg [continuing]. Which I think is what you have 
in mind. They are also regressive, and that makes them 
complicated.
    Mr. Auchincloss. And many people I would note, before I 
yield back my time, can't choose when they have to commute.
    Ms. Edelberg. Correct.
    Mr. Auchincloss. I yield my time to the chairwoman.
    Ms. Williams of Georgia. That concludes our hearing. The 
gentleman's time has expired.
    I would like to thank each of the witnesses for your 
testimony today. Your comments have been very informative and 
helpful to our work on this committee.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may be submitted to them in 
writing.
    I also ask unanimous consent that the record remain open 
for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing.
    Without objection, so ordered.
    The committee stands adjourned.
    [Whereupon, at 1:16 p.m., the committee was adjourned.]


                      Submissions for the Record

                              ----------                              

 Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in 
                    Congress from the State of Texas
    Thank you, Chairman DeFazio, and Ranking Member Graves, for holding 
today's hearing on the ongoing COVID-19 pandemic, which continues to 
seriously affect all of us in direct and indirect ways. I would also 
like to thank our esteemed panelists who are testifying today, and 
welcome Mr. Juan Ortiz from the great state of Texas! Certainly, the 
COVID-19 pandemic has had devastating financial consequences for 
millions of Americans, particularly for those who work in the 
transportation and service sectors of the economy. Throughout the 
nation, local transportation entities, such as Dallas Area Rapid 
Transit in my congressional district, have faced serious financial 
strain due to lost sales tax revenue and plunges in ridership levels. 
In response, Congress has enacted legislation that provided funding to 
ensure the transportation industry and its workers remain financially 
secure.

                                 
Statement of John Samuelsen, International President, Transport Workers 
 Union of America, AFL-CIO, Submitted for the Record by Hon. Peter A. 
                                DeFazio
    I offer this statement on behalf of more than 150,000 members of 
the Transport Workers Union of America (TWU). We represent subway and 
bus operators, airline ramp workers, flight attendants, station agents, 
school bus drivers, bikeshare workers, mechanics of all kinds, and many 
other crafts in the public transit, airline, railroad, utility, 
university, and service sectors.
    98% of our members are essential workers who carried us all through 
the darkest times of the pandemic. These workers showed up, day in and 
day out, at a time when our government instructed other Americans to 
stay home for the public good. Especially at the beginning of the 
pandemic, TWU members were often forced to do our jobs without adequate 
safety protections like face masks. As a result, more than 10% of our 
members have tested positive for or been quarantined after exposure to 
covid-19 and 189 of us have been killed by the virus.
  Federal aid programs saved our transportation systems by protecting 
                             workers' jobs
    The pandemic greatly tested our transportation systems and our 
country. Federal aid and intervention have been the saving grace for 
transit, airlines, Amtrak, and other modes of transportation over the 
past 19 months. In total, Congress provided $168.1b \1\ in aid to 
transportation workers at transit agencies, airlines, Amtrak, school 
bus operators, motorcoaches, and private transit providers. As a 
result, 95% of TWU members never lost a paycheck during the pandemic, 
despite these industries losing millions of riders and passengers. The 
vast majority of this aid was included in bipartisan packages that 
nearly every member of this committee supported. On behalf of every TWU 
family, I want to thank the members of this committee for all your work 
and support delivering federal aid to the transportation workforce in 
response to this crisis.
---------------------------------------------------------------------------
    \1\ $69.4b for public transit, $63b for airline and airline 
contractor workers through the payroll support program, $29b in 
additional aid to airlines through loans and loan guarantees, $4.7b for 
Amtrak, and $2b through the Coronavirus Economic Relief for 
Transportation Services (CERTS) program directed to motorcoach, school 
bus, and other companies. This funding came through the Coronavirus 
Aid, Relief, and Economic Security (CARES) Act (March 27, 2020), the 
Coronavirus Response and Relief Appropriations Act (December 21, 2020), 
and the American Rescue Plan Act (March 11, 2021).
---------------------------------------------------------------------------
    I want to emphasize that the federal aid in this case was truly for 
the transportation workforce. 100% of the emergency federal investment 
into our transportation systems came with some of the strongest worker 
protections ever included in a response and relief bill. Airlines and 
airline contractors were not allowed to involuntarily furlough their 
workers or diminish wages under the payroll support program.\2\ Transit 
agencies had to certify that they hadn't furloughed any workers.\3\ And 
Amtrak was directed to return furloughed workers to the frontlines and 
to stop outsourcing jobs \4\. The benefits of this approach have been 
apparent from the beginning. More than 147,000 TWU members were 
supported by this aid. These workers and their families kept their 
health insurance--which is essential during a public health crisis--and 
were never forced onto unemployment insurance. And now, as we are 
climbing out of the pandemic, they are already on the job ready to grow 
our economy again.
---------------------------------------------------------------------------
    \2\ P.L. 116-136 Section 4114; P.L. 116-260 Section 404; P.L. 117-2 
Section 7301
    \3\ P.L. 116-260 Division M Title IV--Federal Transit 
Administration; P.L. 117-2 Section 3401
    \4\ P.L. 116-260 Division M Section 401
---------------------------------------------------------------------------
New programs and requirements proved effective at preventing the spread 
            of diseases and have demonstrated other benefits
    Across every mode of transportation, workers, managers, and 
communities came together to try new ways of operating. Many of these 
strategies proved effective not only at preventing the spread of the 
coronavirus, but at creating better, more efficient transportation 
services that benefit riders and workers. These measures will stay with 
us for years to come if given the opportunity to continue.
    The CARES Act required public employers to provide their workers 
with paid sick leave, some of which could be used to care for children 
and other family members who would otherwise be unattended due to the 
pandemic. This requirement, while it was in effect, proved very 
effective at quickly identifying and quarantining workers who tested 
positive for covid-19. Unfortunately, this requirement did not apply to 
large private employers. Private transit providers and many others 
refused to implement paid sick leave policies while simultaneously 
telling workers to stay home if they had any covid-like symptoms.
    Without paid medical leave, workers are forced to choose between 
their coworkers' health and a paycheck. Workers without paid leave are 
much more likely to show up to work sick, to try to ignore their 
symptoms, and to spread communicable diseases as a result. For 
transportation workers, who can expose not only other workers but 
hundreds of passengers each day to diseases like covid-19, the negative 
effects of not having access to paid medical leave are a major public 
health risk. The success of the CARES Act's mandatory paid leave 
program is more proof that all workers should have access to paid 
medical leave to help protect our public health.
    Transit agencies took unprecedented steps to keep workers and 
riders safe during the pandemic. To maintain social distancing, 
agencies required rear-door boarding, where possible, and eliminated 
fare collection. Paratransit providers, who were left out of the 
original CARES Act support programs, conducted supplementary service in 
some localities; these drivers followed mainline buses on fixed-route 
service and served as the overflow option for riders once the primary 
bus reached capacity. To handle additional cleaning needs, mechanics 
and operators at some agencies were invited to aid the cleaning crews 
for additional hours at their regular pay. And agencies everywhere 
increased mechanical and track work as service levels went down--
helping to address the large backlog in our state-of-good-repair 
programs.
    Airlines also adapted their business model to allow workers to 
socially distance and to limit the number of potential vectors for the 
virus. The TWU signed several agreements with our carriers to allow 
workers to serve on reserve from home or scheduled workers into teams 
to work together on reduced schedules so that the number of workers on 
shift at an airport could be minimized. This also allowed, when 
necessary, for teams to be quickly quarantined to stop further spread 
of the virus.
    Amtrak, faced with much less demand and a backlog of maintenance, 
directed their mechanics to accelerate fleet refurbishment. As trains 
came off the line serving passengers, they went directly to TWU 
mechanics in Wilmington, Indianapolis, and elsewhere to be upgraded and 
updated. Coming out the pandemic, Amtrak customers can expect newer-
looking and newer-acting trains across the system thanks to TWU members 
work during the pandemic.
Bikeshare use has increased significantly and continues to grow
    In addition to the benefits Congress created directly through the 
covid-response bills, previous federal investments in bikeshare and 
other micromobility options delivered tangible, sustainable benefits to 
road users. The TWU represents more than 70% of the bikeshare workers 
across the country. While these workers were generally excluded from 
the protections extended to other transportation workers, bikeshare 
systems continued to see demand that required some systems to increase 
the number of workers to serve riders.\5\ These systems, made possible 
by federal investment under the Congestion Mitigation and Air Quality 
Improvement (CMAQ) and other programs, delivered an essential service 
to riders across the country. The TWU hopes to see these systems 
continue to grow and better integrate into our transit and rail 
infrastructure in the future.
---------------------------------------------------------------------------
    \5\ Ridership at the eight largest bikeshare systems in the U.S. 
fell 44% during the first months of the pandemic versus up to 96% on 
public transit systems according to the Bureau of Transportation 
Statistics.
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    Government inaction caused the failures and difficulties in our 
                           pandemic response
    In our experience, the failures and difficulties in our federal 
pandemic response have been caused by government inaction, rather than 
any overzealousness. The worst of these instances began in October 2020 
when the programs and funding authorized in the CARES Act began to 
expire. From October to December, we suffered a glimpse of what the 
world may have looked like for transportation workers without a strong 
federal response to the public health crisis. Tens of thousands of 
airline, transit, and rail workers were either furloughed or threatened 
with layoffs. Nearly every large transit agency in the country was 
projecting doomsday service cuts and furloughs. When the second round 
of economic aid came at the end of December, more than 20,000 planned 
or enacted furloughs were reversed among our members.\6\ Collectively, 
the airlines shed 6,493 jobs that have yet to return because of this 
gap in the PSP \7\--a major factor in the airlines ongoing 
understaffing problems.
---------------------------------------------------------------------------
    \6\ 9,400 at New York Metropolitan Transportation Authority 
(threatened), 4,000 at Southwest Airlines (WARN notices), 3,200 at 
American Airlines (furloughs), 1,000 at San Francisco Metropolitan 
Transit Authority (threatened), 800 airline dispatchers and ground 
contractors (furloughs and WARN notices), and several hundred at Amtrak 
(furloughs and threatened).
    \7\ Bureau of Transportation Statistics airline employment data
---------------------------------------------------------------------------
    Beyond the federal aid programs, the same pattern held true in 
health and safety. When the CDC and the DOT were slow to establish 
federal guidance, managers across all our modes forbid workers from 
wearing masks on the job. From January to April, workers who wanted to 
protect themselves on the job were told that their personal protective 
equipment (PPE) was not part of their uniform. While these agencies 
eventually offered good guidance encouraging airlines, transit 
agencies, and railroads to take steps to protect their workforce from 
the virus, we know of no entity that applied the DOT guidance in its 
entirety. There is no question that the DOT guidance would have saved 
lives if it had been made mandatory.
    The lack of a national plan for manufacturing and delivering PPE 
forced essential workers to operate for months without the items or 
processes we now consider the minimum health and safety conditions 
during a pandemic. The TWU was forced to source, purchase, and 
distribute more than $600,000 worth of PPE, including more than 200,000 
masks, to our members. Their employers could not--or would not--make 
these purchases themselves.
    Long overdue aid to the school bus and motorcoach industries is 
only just now starting to reach workers in these industries, a year and 
a half after it was most needed. While Congress considered aid for 
these workers in earlier packages, the industry's refusal to consider 
labor protections similar to those on every other federal aid program 
needlessly delayed authorizing these funds until late December 2020.\8\
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    \8\ P.L. 116-260 Division N Title IV Subtitle B
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   Lingering, unexpected and unaddressed issues have undermined our 
                                recovery
    The effects of the pandemic will be with us for many years to come. 
The aid programs have blunted many of the worst possible outcomes, 
however, there are several areas that have been left unaddressed that 
are undermining our recovery.
Assaults on the transportation workforce have risen over the past two 
        years
    First and foremost of these is the rise of assaults on the 
transportation workforce. Transit workers have faced the threat of 
assault on the job for years. Throughout 2020, as ridership fell to 
historic lows, the number of assaults in these systems remained at 
roughly the same level as 2019. Now that ridership is returning, 
assaults are on the rise.
    We have also seen a significant increase in assaults in our 
airlines and on Amtrak. The FAA has received more than 4,385 reports of 
unruly passenger behavior and has launched formal investigations into 
789 of these cases \9\--nearly quadruple the previous record number of 
such cases in a year and we are only in September. Amtrak onboard 
service workers are reporting threats and unsafe behavior on trains 
regularly.
---------------------------------------------------------------------------
    \9\ https://www.faa.gov/data_research/passengers_cargo/
unruly_passengers/
---------------------------------------------------------------------------
    Transportation workers all have safety sensitive jobs that they 
cannot perform while under the threat of physical violence. 
Furthermore, the looming threat of assaults discourages new workers 
from joining these professions as it simultaneously forces many workers 
out in pursuit of safer jobs. The increased threat of assault demands a 
federal response across all modes of transportation to protect the 
workforce, as well as passengers and other road, rail, and air users. 
This committee has considered and passed, as part of the INVEST in 
America Act, essential legislation to protect transit workers from 
assault. Similar language passed the Senate as part of the 
Infrastructure Investment and Jobs Act. I want to thank Representatives 
Grace Napolitano, Anthony Brown, John Katko, and Brian Fitzpatrick for 
their dedicated work on this issue. Congress must swiftly pass these 
provisions into law and take up other initiatives to similarly protect 
the airline and Amtrak workforces.
Inconsistent and bad faith interpretations of the PSP protections have 
        contributed to understaffing problems at airlines
    The TWU and others fought hard to ensure that the PSP protected the 
entire airline workforce. Congress ultimately agreed with that 
philosophy and forbade airlines who received funds through the program 
from involuntarily furloughing or reducing wage rates for workers. 
Unfortunately, many airlines sought to undermine these protections and 
bank federal aid rather than pass it on to the frontlines. As a direct 
result of these intentional misinterpretations of the PSP, the entire 
airline industry is now facing massive understaffing issues that have 
led to tens of thousands of cancelled flights and stranded travelers.
    All of the major carriers aggressively pursued voluntary leave 
programs, including early retirements and other permanent separation 
agreements, that have reduced the airline workforce below levels 
envisioned at the start of the pandemic. During the period that the 
first round of PSP was active, the airline industry shed nearly 22,000 
jobs through these agreements.\10\
---------------------------------------------------------------------------
    \10\ Bureau of Transportation Statistics airline employment data 
from April to September 2020.
---------------------------------------------------------------------------
    Additionally, Delta, JetBlue, and United cut workers' hours from 
full to part time \11\. While technically allowed under the PSP's 
wording, this action clearly ran against Congress's intent to preserve 
the airline workforce. This action forced many of these workers to 
leave the industry entirely to make up these lost earnings. Republic 
Airlines created a similar effect when it was waiting to receive 
federal aid until it had furloughed a substantial number of workers and 
then refused to hire these workers back using that aid.
---------------------------------------------------------------------------
    \11\ United later reversed this decision.
---------------------------------------------------------------------------
State and local disinvestment in transit has undermined federal aid 
        programs
    During the worst of the pandemic, states and municipalities across 
the country cut their budgets in preparation for a major fall in 
revenue similar to 2008-2010. Thanks to federal aid, we avoided the 
worst-case scenario, however some states did not change their austerity 
approach.
    New York, for instance, cut their state transit contributions by 
$165m \12\ and Ohio attempted to cut their state contribution to 
transit by 90% \13\. In both cases, while public transit will continue 
undiminished for the foreseeable future thanks to federal dollars, the 
new baseline levels of funding for transit are now significantly lower 
in these states than they were prior to the pandemic. These changes, 
perversely, could lead to disinvestment in our transit services over 
the long-term. Congress can correct this concern by adding maintenance 
of efforts provisions, which require localities to continue their 
current funding for existing programs in order to access more federal 
money, to future aid packages.
---------------------------------------------------------------------------
    \12\ https://reinventalbany.org/2021/02/gov-cuomos-budget-proposes-
raiding-145m-in-mta-dedicated-funds-on-top-of-261m-funds-withheld-by-
nys-in-2020/
    \13\ https://www.cleveland.com/open/2021/02/gov-mike-dewines-
transportation-budget-includes-millions-in-cuts-for-public-transit.html
---------------------------------------------------------------------------
Failure to include hazard pay for essential workers as part of the aid 
        packages is incentivizing workers to leave these jobs
    Essential workers sacrificed for our country throughout the 
pandemic. Our economy could not have operated without transportation 
systems, grocery stores, and other critical pieces of infrastructure--
none of which were prepared for a highly-contagious infectious disease 
spread through the air. The unions who represent workers in these 
industries have all testified to the exposure their members have faced 
as a result. There is no question that these jobs became hazardous 
occupations during the pandemic.
    While the danger of the work increased, cash strapped transit 
agencies, airlines, and railroads could not afford to raise wages or 
increase healthcare benefits to compensate for these newly hazardous 
conditions. This disconnect between the costs workers face on the job 
and their compensation is encouraging workers in these industries to 
look for other employment--professions that will adequately compensate 
them for the dangers they face at work. To honor these workers and 
combat worker flight, the House included funding for a hazard pay 
system for essential workers as part of the Heroes Act in mid-2020. 
This program would have given essential workers up to $10,000 in 
premium pay for time worked in public during the pandemic \14\. 
Unfortunately, the Senate never took up this vital provision and 
workers continue to wait for needed hazard pay for their work.
---------------------------------------------------------------------------
    \14\ 116th Congress--H.R. 6800 Section 170102
---------------------------------------------------------------------------
    The TWU strongly encourages Congress to take up and pass a hazard 
pay bill that would demonstrate that our government understands the 
unique dangers essential workers faced during the pandemic.
Several transportation industries were left out of aid packages until 
        the American Rescue Plan, leaving these workers on long term 
        unemployment or out of the industry entirely
    TWU members working for school bus operators, motorcoaches, and 
private transit providers were among the first workers in the country 
to lose their jobs at the start of the pandemic. Congress waited until 
December 2020 to finally authorize aid for these industries and the 
Treasury Department did not open applications for the program until 
June 2021. This delay, caused in part by industry representatives 
refusing to include labor protections in their request for aid, has 
caused significant harm to workers--many of whom may never return to 
their old jobs.
    The chaos this has caused is especially concerning for the school 
bus industry. TWU locals worked closely with our employers to keep 
drivers, mechanics, and other school bus workers on the line as schools 
closed last spring. These workers delivered lunches to children 
learning from home and took care of other projects around their 
districts. However, innovative strategies like this were not available 
or could not be sustained everywhere. When schools re-opened en masse 
this fall, district across the country reported difficulties getting 
school bus drivers to come back. These workers, after a full year away 
from their former employers, had found other work. It will take our 
country years to develop a new generation of school bus workers to 
replace those who have left the industry \15\.
---------------------------------------------------------------------------
    \15\ https://thehustle.co/why-america-has-a-school-bus-driver-
shortage/
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      The pandemic is not over yet and our response cannot end yet
    While our country is in recovery, the pandemic is not over yet. 
Transit agencies, airlines, Amtrak, and others will continue to use 
these necessary programs for months yet to come. As new variants of the 
virus create another surge of infections, strong and mandatory health 
and safety guidance will save workers' lives. Congress correctly 
intended for these programs to extend until the end of the pandemic. 
Workers are counting on that commitment for their safety and security.
    Thank you again for the opportunity to testify today and I look 
forward to your questions.


                                Appendix

                              ----------                              


Question from Hon. Frederica S. Wilson to Paul P. Skoutelas, President 
and Chief Executive Officer, American Public Transportation Association

    Question 1. Mr. Skoutelas, in your testimony, you state that the 
COVID-19 emergency support was designed to support the operating 
budgets of transit agencies, but that it is critical that Congress 
invest in transit capital programs, such as the investments included in 
the Infrastructure Investment and Jobs Act.
    Please explain the difference between these two investments and why 
investment in transit capital programs is necessary.
    Answer. We are deeply grateful that Congress recognized public 
transit's essential role by passing emergency legislation to provide 
significant support for transit operating costs. As states and cities 
implemented stay-at-home orders and encouraged social distancing, 
ridership for many agencies fell to as low as 20 percent of pre-
pandemic ridership levels. The COVID-19 funding was essential to our 
transit systems' survival and their ability to continue serving our 
communities. According to a recent APTA survey, almost one-half of 
transit agencies stated that the COVID-19 emergency funding helped them 
avoid a complete shutdown of public transit service. In addition, more 
than 75 percent of agencies said that COVID-19 funding helped them 
avoid layoffs and furloughs.
    Investment in long-term capital programs is necessary to address 
the $105 billion state-of-good-repair backlog, modernize our systems, 
and meet the mobility demands of growing communities. We need to invest 
in public transportation infrastructure that meets the needs of our 
residents and provides the necessary, dedicated funding to ensure safe, 
reliable, and efficient public transit and high-performance passenger 
rail systems.

   Question from Hon. Jenniffer Gonzalez-Colon to Paul P. Skoutelas, 
 President and Chief Executive Officer, American Public Transportation 
                              Association

    Question 1. Mr. Skoutelas, today the House will take up the 
Infrastructure Investment and Jobs Act, which will likely fail due to 
Progressives unrealistic demands to also get their $3.5 trillion wish 
list.
    What does it mean to your members, and transit organizations that 
serve new transit routes created in response to COVID-19, that we are 
unable to provide long-term certainty and funding?
    Answer. To carry out transit services as effectively and 
efficiently as possible, agencies must be able to rely on long-term 
certainty of federal transportation programs. APTA strongly supports 
the Infrastructure Investment and Jobs Act (IIJA), which makes critical 
investments to surface transportation infrastructure, including $107 
billion for public transportation and $102 billion for commuter rail, 
Amtrak, and other high-performance rail. It is essential that Congress 
act as quickly as possible to enact this legislation and provide the 
increased investment and long-term certainty necessary to meet the 
growing and evolving demands of our communities in the 21st Century 
economy.

Question from Hon. Frederica S. Wilson to Juan Manuel Ortiz, Director, 
 Office of Emergency Management and Homeland Security, City of Austin, 
Texas, on behalf of the International Association of Emergency Managers

    Question 1. Mr. Ortiz, you highlighted in your testimony the 
difficulties associated with accessing and qualifying for federal 
programs that could help better prepare and protect communities from 
disaster.
    How can Congress help improve federal-state-local emergency 
management partnerships to best support communities?
    Answer. Thank you for the opportunity to provide more information 
on this important issue.
    As I outlined in my testimony, Congress has laid a strong 
foundation for improving the federal-state-local emergency management 
partnerships with the recent enactment of the Federal Advance Contracts 
Enhancement Act (FACE Act/PL 116-272) and the Disaster Recovery Reform 
Act of 2018 (PL 115-254). These laws made important improvements to the 
federal-state-local emergency management partnership. The full 
Transportation & Infrastructure Committee worked hard on these laws, 
and we deeply appreciate those efforts.
    Looking ahead, Congress can build on these efforts by:
      Providing consistent policy for reimbursement across all 
FEMA regions and from disaster to disaster,
      Addressing supply chain management issues to better 
prepare for and respond to disasters, and;
      Increasing funding for grant programs that bolster state 
and local capacity and for hazard mitigation programs such as Building 
Resilient Infrastructure and Communities (BRIC) funding, UASI and EMPG 
funding.
Consistency in Application
    Encouraging FEMA to provide state and local governments with 
consistent criteria for approval of disaster assistance across the 
regions is of utmost importance. The COVID-19 pandemic represents the 
first time in U.S. history that every County, State and Territory is 
under identical and concurrent major disaster declarations. This 
unprecedented dynamic has FEMA regions making eligibility determination 
on similar issues, which has unfortunately resulted in inconsistent and 
non-uniform application of policy across the different regions.
    During the pandemic, the lack of consistency was most apparent on 
reimbursement for non-congregate shelter of high-risk populations. In 
some regions, FEMA approved reimbursement while in others, including 
ours, they have not. A consistent policy for non-congregate shelter 
across all FEMA regions based on CDC guidance would have provided 
certainty for local governments seeking to protect high-risk 
populations, minimize infections, and preserve health care capacity.
    Public Assistance (PA) funding requests funnel through a series of 
reviews at the regional, Consolidated Resource Center (CRC) and 
headquarter levels. Given the complexity in program and policy, each 
region is given the latitude to apply certain discretionary 
interpretations of eligibility. For COVID-19, this has resulted in 
certain FEMA Regions applying a more flexible eligibility 
interpretation than others. For the City of Austin within FEMA Region 
VI, this has resulted in an unfavorable situation where FEMA Region VI 
has indicated in writing that certain significant non-congregate 
sheltering costs are ineligible for PA. Within FEMA Region IV and 
Region III similar costs have been approved and obligated.
    Providing temporary protective shelter for the most vulnerable and 
at-risk residents of Austin proved to be one of our most difficult and 
most expensive challenges. In the wake of an early COVID-19 outbreak at 
our congregate shelter facility, the City acted, fearing that future 
outbreaks among people experiencing homelessness would pose a risk to 
those people and to the larger community, especially in terms of 
hospital capacity. In response, the City leased six hotels to provide 
protective shelter and isolation facilities to provide non-congregate 
shelter for people at high-risk of contracting COVID-19, including 
people experiencing homelessness.
    The Austin-Travis County Interim Health Authority established the 
non-congregate shelter program to provide quarantining and isolation to 
individuals exposed to, carrying, or at high-risk for severe illness 
from COVID-19. This action reduced the strain on the healthcare system 
as a high rate of COVID infection among homeless populations would have 
overwhelmed area hospitals. The City's actions were in accordance with 
FEMA policy allowing reimbursement for non-congregate shelter and 
support services on a case-by-case basis. In addition, the City closely 
consulted with FEMA Region VI and the State and hewed closely to CDC 
guidance. Yet, our reimbursement still remains unknown due to the 
inconsistency in application.
    To expand, we greatly appreciated President Biden's January 21 and 
February 2 Presidential Memoranda instructing FEMA to provide 100 
percent reimbursement for state and local government emergency 
protective measures taken for the safe opening and operation of 
schools, hospitals, shelters, and transit systems. We were especially 
pleased that the Memoranda included 100 percent reimbursement for 
provision of non-congregate shelter, which has been a critical 
component of local prevention and response efforts, helping to contain 
transmission of COVID-19 among the most vulnerable and at-risk 
residents of our communities, helping contain community spread and 
preserving critical health care capacity. There was considerable 
excitement amongst low-income and homeless advocates about the 
Administration's announcement that they would provide 100% 
reimbursement for pandemic-related costs, however, for those of facing 
denial of our request for reimbursement of non-congregate shelter of 
high-risk population, we are looking at 0% reimbursement, which is 
concerning given the Administration's clear guidance that these 
expenses should be eligible.
    Austin remains deeply concerned that FEMA has not consistently 
approved requests for reimbursement for non-congregate shelter, putting 
many local governments at risk of having to absorb significant costs. 
It is therefore critical that FEMA flexibly approve pandemic-related 
non-congregate shelter reimbursement requests uniformly across all FEMA 
regions.
Supply Chain Management
    Supply chain management is another subject that requires 
improvements to benefit the partnership between federal, state and 
local governments. As Austin sought out supplies, such as PPE, in 
response to COVID-19, it became clear that adequate levels of critical 
supplies would be a challenge, and the distribution of those supplies 
would be difficult as well.
    The need for a national strategy for supply chain management during 
a pandemic quickly became apparent as we found ourselves competing with 
our state and other cities for the same limited supply of PPE. Further, 
these limited supplies lead to price increases and unequal distribution 
patterns that were harmful to our recovery efforts and ultimately 
negative for the taxpayer.
    At the outset of the COVID-19 pandemic, Austin needed to gather PPE 
quickly to provide the necessary supplies for our frontline workers, 
workforce, and general residency. After Austin was told by multiple of 
the nation's largest suppliers that orders of PPE for the City of 
Austin were not large enough, we found it necessary to partner with the 
City of Houston and the Texas Medical Center in Houston to purchase a 
massive supply of masks in Florida that would help accommodate our 
needs. After confirmation of the PPE purchase and as we were about to 
begin obligation the funds for the purchase, we were told by the 
supplier that the Texas Department of Emergency Management took 
possession of the supplies, before we could close the deal. In this 
situation, we found ourselves competing not only against other cities 
attempting to mitigate a disaster, but even our own state.
    This is the consequence of inequitable distribution of necessary 
supplies and a lack of a national strategy for supply chain management. 
Had there been a prioritization on the supply chain and we had been 
able to seek out one specific source for our necessary supplies, our 
efforts to provide PPE could have been much more effective and 
efficient.
    With that said, the City of Austin appreciates that in the wake of 
Hurricane Katrina, Congress enacted legislation to address supply chain 
issues, however, the COVID-19 pandemic has illustrated that there is 
much room for improvement and that empowering local partners could be 
an important part of the solution.
Resources
    As I testified, I recognize that I am addressing an authorizing 
committee and that annual funding decisions are the domain of the 
Appropriations Committee, but I'd be remiss to not end with a 
discussion of funding.
    If Congress and FEMA address the concerns raised above, it would 
significantly improve the federal-state-local partnership and our 
ability to meet our joint emergency management mission and serve our 
community. However, sometimes the best answer is also the simplest one.
    If Congress really wants to bolster local emergency management, I 
urge you to increase funding for core programs such as Emergency 
Management Performance Grants (EMPG), the Urban Area Security 
Initiative (UASI), and the State Homeland Security Grant Program 
(SHSGP).
    Annual appropriations for the FEMA Disaster Assistance Account and 
emergency supplemental appropriations bills enacted in response to 
disaster garner the most attention (and money), but EMPG, UASI, and 
SHSGP are the foundation of local emergency management efforts. 
Unfortunately, the sequester and budget austerity that followed the 
2011 Budget Agreement did not spare these core programs. Funding for 
these programs has not kept pace with population growth, inflation, 
and, most importantly, need.
      Congress provided $350 million for EMPG in FY 2021, 
barely above its FY 2010 level of $340 million.
      Congress appropriated $615 million for UASI in FY 2021, 
well below its FY 2010 level of $887 million.
      Congress appropriated for $610 million for SHSGP, well 
below its FY 2010 level of $950 million.

    The EMPG program is the primary source of funding available to 
local communities to support preparedness, response, recovery, and 
mitigation. Local Emergency Management Programs are understaffed, most 
consisting of just one person and struggling to keep up with the new 
demand placed upon them with the pandemic and climate change. EMPG 
funding flows to local communities through the state as a sub award, 
however, there are no requirements for state to allocate funds to local 
communities and as a result, access to EMPG funding varies from state 
to state. In Texas, which is one of the only states to have a process 
to support local programs, we have seen consistent reductions from 30 
to 60 %. Enhancement to EMPG should also include mandate on minimum 
pass through to local governments or a separate process.
    On UASI, I know that committee members are fully aware of what it 
means to serve a community at the margin of participation in the 
program at the current, reduced funding levels. Austin falls on the 
wrong side of the participation margin each year. We have not 
participated in UASI since Congress reduced funding for the program in 
FY 2011. Even communities, such as Las Vegas and Orlando, that are 
fortunate to remain on the right side of that margin saw considerable 
drops in their allocations and face annual uncertainty about whether 
they will receive federal funds to sustain investments made with UASI 
funds.
    I would be happy to outline the reasons why I think Austin should 
be a UASI participant. Indeed, my testimony in many ways makes that 
argument. At the end of the day, every community can do an excellent 
job of outlining the ways that they are vulnerable and how they would 
benefit from participation in UASI. For metropolitan areas such as 
ours, which face real threats and have real needs, the best answer lies 
not in tweaking the UASI threat risk assessment but in Congress 
increasing funding for the program to ensure that many more Americans 
benefit from UASI.
    For Committee members who represent large metropolitan areas that 
face little to no threat to their participation in the UASI program, I 
discourage you from pursuing or supporting ill-advised attempts to 
limit participation in the UASI program to the largest metropolitan 
areas. Such a policy would leave tens of millions of Americans more 
vulnerable. In addition, I believe it would significantly reduce 
support for the program in Congress.
    The benefits of UASI are considerable. Communities that are 
fortunate to participate in the program are better able to not only 
meet their equipment, training, and preparation needs, but they benefit 
from the regional collaboration and cooperation that the UASI program 
encourages. The UASI program benefits urban areas by assisting 
communities to develop regional solutions, creating mission ready 
capabilities which can make our communities more resilient. An Austin 
UASI award would allow our region to develop strategies to establish 
capabilities like alternate care sites, mass care and sheltering, 
develop evacuation plans and reception centers and regional resource 
staging strategies.
Additional Information
    Building on my written and oral testimony, I would add that all 
disasters are local, and all too often local officials have to make 
split-second decisions in the absence of FEMA guidelines, but must do 
so fully aware that when FEMA eventually issues guidance they could be 
penalized.
    With all due respect to my colleagues at FEMA, in many cases we 
have reached the point where local officials are afraid to act, fearful 
that FEMA will penalize them. Fear of penalization should not be the 
initial reaction when local officials confronting a disaster think 
about how they will be working with FEMA.
    For example, on vaccinations, in order to get as many people as 
possible and encourage them to take both shots, we chose to provide 
COVID and flu shots at the same time, in alignment with the 
recommendations of local health officials and CDC guidance. However, 
FEMA is saying they will only reimburse COVID vaccine shots, not flu. I 
believe we acted correctly, and it will have important public health 
benefits, but I had concerns about reimbursement when we made that 
decision. I am glad that my concerns did not stop us from acting, but I 
would understand any hesitancy from other local officials to act.

  Questions from Hon. Jenniffer Gonzalez-Colon to Juan Manuel Ortiz, 
Director, Office of Emergency Management and Homeland Security, City of 
Austin, Texas, on behalf of the International Association of Emergency 
                                Managers

    Question 1. In your testimony you describe the efforts by Austin to 
shelter high-risk individuals while FEMA contends that housing the 
homeless population does not qualify for public assistance.
    a.  Does the city of Austin have a budget surplus, or does it run 
at a deficit? Will this program, if paid for by the city of Austin 
leasing 6 hotels at $3 million per month, negatively impact other 
programs?
    Answer. The City of Austin financial policies requires a 
structurally balanced budget with sufficient current revenue to support 
current expenditures. The City Council approved a balanced budget for 
FY 2021-22 on August 12, 2021. The City's average monthly expenses 
related to the Prolodge leases are $926,576 per month and is included 
in the $15.3 million average monthly expenditures directly related to 
COVID response. All COVID-related expenses have been above our annually 
budgeted expenses which has impacted the City's established reserves 
and may impact the City's budget in future fiscal years.

    b.  Now that vaccines are readily available, is this a requirement 
of Pro-Lodging as a way to ensure high-risk populations are getting 
vaccinated?
    Answer. The ProLodges were a public health intervention intended to 
allow for safe social distancing among individuals experiencing 
homelessness with high-risk chronic health conditions. During their 
operation, vaccines were offered when available, but not required as a 
condition of receiving services. In fact, the City's hands were tied by 
Governor Abbott's executive orders that stated vaccine mandates were 
not allowed in under any circumstance in Texas.

    Question 2. Was the city of Austin able to source PPE from 
companies in the United States or were supplied foreign-sourced? I ask 
because Puerto Rico, island-wide, was unable to procure PPE from 
foreign suppliers because of Stafford Act requirements that only apply 
to the territories and Washington, DC. I introduced H.R. 2018--which 
would waive specific provisions that limit where the territories and 
Washington, DC can source PPE in the event of a Presidentially declared 
emergency declaration.
    Answer. The City of Austin was able to source PPE from the U.S. and 
foreign entities. Eventually, the City was forced to pay the market 
rate for PPE, which could have been much lower had there been a 
coordinated effort between the federal government, states, and 
localities. Ultimately, this is concerning due to the increased cost of 
purchasing supplies being passed along to the taxpayer.

  Questions from Hon. Jenniffer Gonzalez-Colon to Michael J. Boskin, 
  Ph.D., Tully M. Friedman Professor of Economics and Wohlford Family 
 Senior Fellow, Hoover Institution, Stanford University, on behalf of 
                                himself

    Question 1. Mr. Boskin, as the House prepares to vote on the 
Bipartisan Infrastructure deal struck to inject more than $550 billion 
in next infrastructure spending over the next 5 years:
    a.  Can you give us the immediate, and long-term macro-economic 
projection on how this might help or hurt the nation in terms of 
finance and debt?
    b.  What will the effects of added inflation be?
    Answer to a. and b.: The $550 billion in additional infrastructure 
spending, above and beyond continuing preexisting levels, will likely 
have several important macroeconomic effects that would depend upon the 
state of the economy and any additional federal spending for other 
purposes. It would also depend on the ex ante quality of the projects 
and their ex post execution. As a general projection, the economy is 
now back above pre-pandemic levels and the labor market is nearing, but 
not yet back to, full employment. Unfortunately, we are witnessing 
substantial inflation that unless it soon subsides back to the 2% level 
will require the Federal Reserve to start raising its target interest 
rate. That would ripple through longer-term rates, and would both 
reduce private investment and raise the cost of servicing the National 
Debt.
    The best ways to reduce these risks is to phase the spending in 
slowly, revisit the use of user fees, and implement reforms, such as 
more stringent national cost benefit analyses and raising state and 
local matching rates as appropriate to reflect local versus national 
benefits, which would improve the quality of the projects undertaken. 
That would increase the probability of favorable future productivity 
improvements from the projects.
    Any added, or continuing inflation risks a future contraction if 
the Fed cannot precisely engineer a soft landing, which historically at 
times has proved difficult. Higher inflation would likely be most 
harmful for those lower on the income distribution.

   Question from Hon. Frederica S. Wilson to Wendy Edelberg, Ph.D., 
Director, The Hamilton Project, The Brookings Institution, on behalf of 
                                herself

    Question 1. Ms. Edelberg, your testimony highlights the impact the 
pandemic has had on the economy and labor workforce and its 
disproportionate impact on low-income workers and communities. I 
strongly agree that infrastructure is in much need of federal 
investment, especially in the Miami area.
    You also mentioned a 2016 CBO summary that states that an increase 
in public investment can increase private-sector output. Please explain 
why it leads to an increase in private sector output and how the 
federal government can best support this outcome.
    Answer. A 2016 study from the Congressional Budget Office, The 
Macroeconomic and Budgetary Effects of Federal Investment [https://
www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51628-
Federal_Investment.pdf], explains why federal investment in physical 
infrastructure, research and development, and education increases the 
level of economic output. CBO published a more recent analysis, Effects 
of Physical Infrastructure Spending on the Economy and the Budget Under 
Two Illustrative Scenarios [https://www.cbo.gov/system/files/2021-08/
57327-Infrastructure.pdf], that specifically focused on investment in 
physical infrastructure. As that study states,

        Spending on physical capital facilitates commerce in different 
        ways depending on the kind of infrastructure. Better 
        transportation infrastructure reduces costs of distributing 
        goods and services. More water and sewer systems reduce the 
        cost of housing by making land able to support more 
        concentrated development. More spending for the electric grid 
        can reduce the price of electricity and increase its 
        reliability.

    That study also suggests approaches to improve the ``rate of 
return'' for such investments:

        Rates of return for individual infrastructure projects vary 
        considerably, and policies that analyze the benefits and costs 
        when allocating spending for infrastructure can make that 
        spending more productive than programs that do not. For 
        example, according to the Federal Highway Administration's 
        analysis, capital spending would produce greater benefits 
        relative to costs than it has recently if it was reoriented 
        toward expanding urban interstates, making major repairs of 
        urban highways, and repairing bridges.

Question from Hon. Nikema Williams to Wendy Edelberg, Ph.D., Director, 
 The Hamilton Project, The Brookings Institution, on behalf of herself

    Question 1. My district is home to our nation's busiest airport and 
one of our nation's busiest rapid transit systems. Y'all, it goes 
without saying I have a LOT of constituents working in the 
transportation sector. The pandemic has hit all these constituents 
really hard. But what's been particularly alarming is how much it has 
disparately impacted groups of them. In July 2020, unemployment among 
female transportation workers reached a record 26.2%. This is over 10% 
higher than the overall industry unemployment rate at the time--which 
was still alarmingly high. Transportation employment is coming back, 
but it has not fully recovered yet. As recovery proceeds, we have to 
ensure it is equitable. Ms. Edelberg, how could factors like increasing 
the accessibility of quality, affordable childcare help combat 
disparities in employing transportation workers?
    Answer. The COVID-19 pandemic revealed clearly that childcare--
including programs for the youngest children, those in pre-K, or in K-
12 schools--constitutes a critical infrastructure that directly 
supports parents' ability to enter and fully participate in the labor 
market. Since the pandemic began, a lack of available childcare has 
been a primary reason [https://www.hamiltonproject.org/blog/
mothers_are_being_left_behind_in_the_economic_recovery_from_covid_19] 
cited by workers for leaving jobs and for remaining out of the labor 
force entirely.
    As families have adapted to disruptions in childcare programs and 
schools, the responsibility of care has fallen disproportionately on 
women. While at the same time, women and particularly women of color 
were more likely to be employed in industries most heavily affected by 
COVID-19--those requiring in-person work like retail stores, 
restaurants, and transportation. Mothers of elementary school age 
children experienced the largest employment declines [https://
www.hamiltonproject.org/blog/
examining_the_uneven_and_hard_to_predict_labor_market_recovery] of any 
group and their employment rates continue to lag behind the economy as 
a whole.
    While the pandemic shed renewed light on deficiencies of the 
childcare system, inadequate public expenditures on childcare and early 
education long preceded this recent crisis. While federal, state and 
local governments spend [https://
www.hamiltonproject.org/papers/
increasing_federal_investment_in_childrens_
early_care_and_education_to_raise_quality_access_and_affordability] 
roughly $12,800 on care and education per student from ages 5-18, the 
public spends only $1,500 annually on such investments for the youngest 
children. This disparity of public funding going towards the youngest 
children means that effectively all resources for kids aged 0-4 are 
paid for by families. A family's ability to pay contributes directly to 
differences in a child's preparation for kindergarten, which in turn 
leads to greater disparities in future outcomes.
    While the impact of early-education resources on child development 
is well studied, the pandemic highlighted that inadequate access to 
high-quality childcare also constrains parents from fully participating 
in the labor force.
    Expanding access to high-quality, affordable childcare would 
alleviate the pressures holding back parents from the workforce, 
support their ability to choose what's best for their children and 
careers, and ensure all American children are provided a foundation to 
thrive in their schooling and beyond.

Questions from Hon. Jenniffer Gonzalez-Colon to Wendy Edelberg, Ph.D., 
Director, The Hamilton Project, The Brookings Institution, on behalf of 
                                herself

    Question 1. Dr. Edelberg, is the economy on pace to grow at the 
CBO's projected 7.4%?
    Answer. Consensus projections suggest that the economy will grow 
between 5 percent and 6 percent from the fourth quarter of 2020 to the 
fourth quarter of 2021. Since CBO made its projection of 7+ percent, 
the Delta variant has clearly dampened economic activity and likely 
pushed some of the recovery from the second half of 2021 into the first 
half of 2022.

    Question 2. Dr. Edelberg or Mr. Boskin, what are the impacts to the 
economy if the GDP slows to just 1% due to factors such as government 
COVID-19 supplementals ending?
    Answer. The decline in economic activity in 2020 was incredibly 
sharp and the recovery has been swift compared to previous recessions. 
Most likely, GDP growth cannot maintain the rapid pace that began in 
the third quarter of 2020 and will likely continue to some degree 
through the middle of next year. A number of factors are leading to the 
temporary surge in economy activity including pent-up demand among 
consumers and the timing of fiscal support provided by the federal 
government. Although the slowdown in GDP growth brings risks with it, 
the level of GDP is expected to remain high--suggesting that it is 
appropriate for fiscal and monetary policy to provide less fiscal 
support going forward.

    Question 3. Has the economy's recovery been equally dispersed 
across the country?
    Answer. As highlighted in a recent piece [https://
www.brookings.edu/research/11-facts-on-the-economic-recovery-from-the-
covid-19-pandemic/] published by the Hamilton Project, neither the 
impacts of the pandemic nor the gains in the recovery have been equally 
dispersed. In large part this variation between states has been driven 
by differences in each state's industry makeup and pandemic response. 
While economic trends across states have broadly moved in similar 
directions throughout the pandemic, the magnitudes of initial 
employment loss and recent recovery have generally tracked COVID-19 
containment, as measured by new cases, vaccination rates, and stay-at-
home orders.
    Real GDP for the U.S. returned to its pre-pandemic level in the 
second quarter of 2021. The same is true for all but five states--
Alaska, Louisiana, Nevada, Oklahoma, and Wyoming--whose real output has 
yet to recover. Conversely, the sharp decline in employment in spring 
2020, which was largely concentrated in the services sector, has only 
partially reversed [https://www.brookings.edu/research/11-facts-on-the-
economic-recovery-from-the-covid-19-pandemic/] for the U.S. Through 
September only six states had returned to prepandemic levels of 
employment: Tennessee, Utah, Idaho, South Carolina, South Dakota, and 
Texas.
    To the extent that states vary in their dependence on different 
industries, it can be expected that job openings, quit rates, and labor 
force participation will vary by state as well. In the U.S. overall 
[https://www.brookings.edu/research/11-facts-on-the-economic-recovery-
from-the-covid-19-pandemic/], record job openings, the slowness of job 
matching, and the depressed level of labor force participation have 
created wage pressure, particularly for those in the service sector.

Questions from Hon. Frederica S. Wilson to Gregory R. Regan, President, 
               Transportation Trades Department, AFL-CIO

    Question 1. Mr. Regan, in your testimony, you highlighted the fact 
on-dock workers--like longshore workers--were not provided COVID-19 
workers compensation. I enthusiastically supported this provision in 
both the HEROES Act and the American Rescue Plan, even though it was 
disallowed by the Senate parliamentarian. As a strong supporter of the 
Local 1416 chapter of the International Longshoremen's Association in 
Miami, the protection of port workers and essential employees is 
vitally important to me.
    How has the longshore workforce fared during the pandemic and how 
has the lack of adequate protections impacted the industry? And, what 
should Congress do to resolve this glaring issue?
    Answer. Like many essential workers, longshore employees have had 
to contend with coming to work every day during a global pandemic to 
keep the flow of goods and the American economy running. This included 
working in close quarters well before vaccines were made available. As 
the New York Times reported [https://www.nytimes.com/2020/12/12/us/
politics/coronavirus-longshoremen-ports.html], in some cases employers 
initially refused to provide adequate PPE, resulting in the 
International Longshoremen's Association incurring significant costs to 
do so out of their pocket. We are aware of several terminals, including 
terminals that serve U.S. military cargoes, that suffered outbreaks and 
even considered temporary shutdowns, which would have been 
catastrophic. Tragically, numerous longshore workers passed away due to 
contracting COVID-19.
    We thank you for your support of the previous support of the 
provision on longshore and harbor worker's compensation, as well as 
your co-sponsorship of H.R.3114--Longshore and Harbor Workers' COVID-19 
Compensation Act of 2021. Passage of that legislation would be 
extraordinarily helpful for longshore workers who will become infected 
going forward, as well as workers who were unable to previously collect 
worker's compensation benefits due to the decision of the Senate 
parliamentarian. Ensuring that this program is able to provide benefits 
for employees who missed work due to COVID-19, like both many state-run 
and federal employee compensation programs, is both essential and 
common sense.

  Questions from Hon. Nikema Williams to Gregory R. Regan, President, 
               Transportation Trades Department, AFL-CIO

    Question 1. Last week in the Aviation Subcommittee, we heard about 
how air rage affects worker safety, but this kind of rage could also 
affect the recovery of the transportation sector at large. Mr. Regan, 
if we can stop rising incidents of rage and assault across modes of 
transportation, what boost could that provide to the transportation 
sector's labor participation and passengers' willingness to travel?
    Answer. As documented by TTD member unions, assault and unruly 
behavior by passengers has pushed transportation workers to the limit. 
In already challenging conditions, flight attendants, passenger service 
agents, conductors, Amtrak service workers, transit operators and 
others now face unprecedented violence in the workplace. These 
conditions are not sustainable, and frontline transportation workers 
are suffering. Assaults must be dealt with head on if we are to have a 
continued expectation that these employees will be able to continue to 
serve the travelling public.

    Question 2. Mr. Regan, in your testimony, you mentioned that 
federal assistance has been vital for the transportation sector. As 
Congress works to make transformational investments in our nation's 
infrastructure and people, what specific investments are most important 
to ensure the transportation sector recovers, employs more individuals, 
and builds back better?
    Answer. Since the time of this hearing, President Biden has signed 
the IIJA, which will provide many of the transformational investments 
mentioned here. While it is challenging to select the ``most 
important'' investment that Congress made through the bill, the strong 
reauthorizations of our nation's highway, bridge, public transit, and 
passenger rail programs alongside historic investments in large scale 
infrastructure projects will bring our transportation networks into the 
21st century, improving service, increasing safety, and creating 
thousands of jobs across every cog of the transportation network.

   Questions from Hon. Jenniffer Gonzalez-Colon to Gregory R. Regan, 
          President, Transportation Trades Department, AFL-CIO

    Question 1. Mr. Regan, in your testimony you detail the 31.9% drop 
in revenue and 97% drop in ridership on Amtrak due to COVID-19 which 
prompted the company to lay off 2,500 workers and adjust their service 
routes accordingly.
    a.  Is Amtrak a business: Yes or no?
    Answer. This is not a yes or no question, as ``business'' has no 
meaningful statutory definition or function. Amtrak is a government-
chartered corporation that shares similarities and legal status with 
both federal entities and private enterprise. The revision of Amtrak's 
mission statement and goals contained in the IIJA clarifies Amtrak's 
purpose, emphasizing its foremost role as a national rail network 
providing essential service to communities in 46 states, and we look 
forward to its continued function and growth as such.

    b.  Does it have the flexibilities to make business decisions to be 
good stewards of the taxpayers funding that has supported its service 
even though it has not since it was created, generated a revenue able 
to cover all of its expenses?
    Answer. Yes.

                          [all]